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Mobile users tap into apps

Updated: 2015-11-13 09:32
By Krishna Kumar VR (China Daily Africa)

Changes in lifestyle, shopping habits reflect importance of smartphones in daily life of consumers

When App Annie, a San Francisco-headquartered mobile app analysis company, announced the opening of its Singapore office in March, it said: "If mobile app publishers go East, then we go East."

Likewise in June, at the launch of its new Born2Invest mobile app in Manila, the company's French-American owner, Dom Einhorn said: "We need a solid emerging market as testing ground, and the Philippines is perfect for that."

 Mobile users tap into apps

A Xiaomi service center in Beijing on Aug 5. The popular Chinese brand is driving the rise of budget smartphones in Asia, which in turn is helping to fuel the app economy. AFP

Although the mobile app phenomenon began its journey in the United States after Apple introduced the iPhone in 2007 - with its iOS operating system enabling apps to run - it has caught on in Asia in terms of sales and usage.

A recent report by Yahoo's mobile research arm, Flurry Analytics, said that between April last year and March, "mobile app usage" in Asia posted an exponential growth of 77 percent.

The company defines usage as a user downloading an app - a software program that performs designated functions on a mobile device - and using it for a certain period of time.

Apps are sold and some distributed for free through platforms such as Apple's App Store, Google Play, Windows Store, Amazon Appstore and BlackBerry World.

In markets like China, India and Southeast Asia, Google Play leads in sheer number of downloads, but the App Store - a digital distribution platform for mobile apps on iOS - is top in terms of revenue.

This year, the global revenue driven by apps and related activities is expected to reach $100 billion, with Asia taking a major share.

Flurry Analytics describes the region as "the linchpin of the mobile revolution designing and manufacturing devices and publishing some of the world's most popular apps".

According to Raman Chitkara, global leader of the technology practice at PricewaterhouseCoopers, advances in technology have not only enhanced the computing power and functionality of smartphones, but have also made them affordable, resulting in a wide-scale adoption of smartphones.

"Smartphone adoption is fueling the app economy," Chitkara says.

With the Asian market offering affordable smart handsets, and a drop in the cost of mobile service plans, research company eMarketer estimated that 40.8 percent of the population in the Asia-Pacific will have smartphones by the end of this year. By 2019, smartphone penetration in the region will reach 51.5 percent.

China, India and Southeast Asian countries are driving smartphone growth worldwide. EMarketer said that 38.6 percent of residents in China will own a smartphone this year, for a user base of 525.8 million.

By 2019, that figure will reach 687.7 million, which means almost half (49.8 percent) of the population will own a smartphone. The company says India will overtake the US to take the second position globally, after China, by 2016, with over 200 million users.

The rise of budget smartphones in Asia was partly driven by China's homegrown brand Xiaomi, which overtook Samsung in sales volume in the Chinese market last year.

In the Philippines, smartphone penetration is set to rise to 68 percent by 2018 from 30 percent, according to global telecommunications association GSMA Intelligence.

Smartphone penetration in Indonesia is expected to reach 65 percent by 2018, up from 28.5 percent. According to a 2014 Nielsen survey, 49 percent of Thailand residents own a smartphone.

Asia has all the necessary business and hardware components for the mobile app economy to flourish, says Shiv Putcha, associate research director for consumer mobility at market research company IDC Asia-Pacific.

"Mobile is an increasingly important part of any company's marketing strategy, and developers think mobile first when they design new Internet applications," Putcha says.

For instance, in India, online shopping portals, such as Myntra, are shutting down their websites in favor of an app-only business model.

App growth in Asia is being driven by consumer categories, particularly shopping and lifestyle, which has seen 278 percent year-on-year growth between 2014 and 2015, according to a Flurry Analytics report.

The news and reading category saw a 134 percent expansion, while the utilities and productivity category witnessed 89 percent growth, reflective of the region's growing purchasing power and technology sophistication.

"Asia continues to witness growth in traditional app categories like messaging, social networking and gaming, with one-fourth of the mobile app time spent by users," says the report.

"Lifestyle and shopping was the second with 19 percent of total time, and the third is utilities and productivity, with 17 percent of user time spent," it says, adding that utilities and productivity demands 40 percent more time spent in Asia than it does among users in the US.

A 2014 Nielsen e-commerce survey found that the use of mobile apps for online shopping is growing in popularity in Southeast Asia.

In the Philippines 62 percent of the respondents said they use mobile apps for shopping, followed by Indonesia (61 percent), Vietnam and Thailand (both 58 percent), Singapore (48 percent) and Malaysia (47 percent).

"Apps continue to grow in importance in daily life, and we are seeing this reflected in the various types of popular apps changing over time," says Josh Martin, director of analytics research services at research company Strategy Analytics.

"While games historically dominated the market, there is a surge in travel, health, productivity and finance apps. We believe that life-augmenting apps that are core to day-to-day life such as ride-hailing taxis will grow in importance."

However, he says the opportunity runs the gamut from improving services and making subscriptions more valuable to driving transactions and revenue.

"We expect the trend to continue with increased focus on local apps, before they go global, as investors seek the next big opportunity," Martin says.

krishna@chinadailyapac.com

(China Daily Africa Weekly 11/13/2015 page15)

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