Chinese apps lose dominance in India; entertainment and gaming apps see lockdown rise: AppsFlyer report

The geopolitical climate of 2020 and the subsequent bans on Chinese apps helped Indian apps gain a larger chunk of the market, shows data from a new report by AppsFlyer, a mobile marketing analytics firm, which is headquartered in San Francisco. According to the report, the year 2020 saw a marginal decline in top apps from China, and Indian apps made for almost 40 per cent of the app market in the country. The Chinese were still second in place on the overall list though.

“Yes, the Chinese share dropped because of the ban. But we have seen Indian companies taking a larger share year-on-year. In 2018, the share of Indian companies in top 200 installs was about 37 per cent,” Sanjay Trisal, Country Manager for AppsFlyer India explained to over a call. “Companies in India are creating products which are being used by Indian audiences. They are getting deeper into tier-2 and tier-3 segments. All of this got complemented by the geo-political segment,” he added.

App market in India, Chinese app ban, Chinese apps banned, Chinese apps in India, Appsflyer report, Appsflyer report for India, App marketing in India Chinese apps saw their dominance fall in India, while local apps managed to gain more share of the market. (Image source: AppsFlyer)

Tier-2 and Tier-3 cities driving growth

About 85 per cent of the app installs came from Tier-2 and 3 cities in India, and while the metros accounted for the rest. The report also notes that focusing on regional content will be key to retaining users. “A lot of mobile app developers came up with offerings, which were vernacular in nature,” Trisal pointed out the experience of news short video, news and even utilities apps.

“Most of these Indian companies have vernacular as their primary core strategy. So they started addressing this section of audience, where they saw a huge headroom for growth,” he said.

App market in India, Chinese app ban, Chinese apps banned, Chinese apps in India, Appsflyer report, Appsflyer report for India, App marketing in India Tier-2 and Tier-3 cities drop much of the installs for apps. (Image source: AppsFlyer)

Uttar Pradesh took the top spot on the non-organic installs (NOI) charts back from Maharashtra. NOI are defined as app downloads taking place as a result of any marketing activity.

According to Trisal, there are several reasons for this growth in tier-2 and tier-3 cities. One is the increasing affordability of smartphone devices. Secondly, mobile literacy is far higher, especially in these cities. “You might not have a person who is necessarily, let’s say, English, educated per se, but they know how to navigate to an app,” Trisal explained.

Entertainment, Gaming apps benefitted during lockdown

While the pandemic led to significant drops in install numbers across a majority of verticals, it came as a boon for apps focused on gaming and entertainment. According to the report, OTT streaming players saw video consumption increase, mostly from the hinterland.

The pandemic also led to an increase in digital payments and overall usage of financial apps, with finance representing one of the fastest-growing categories of 2020. But apps related to travel and food and beverages apps saw a decline, especially in the lockdown periods, notes the report.

User retention drops

The year also saw uninstall rates increasing compared to 2019, which the report attributed to app size, stability, and data consumption by apps. It also notes that Indian users prefer apps that take up less space and are faster to use and that over 50 per cent of the uninstalls occur within the first day of installation itself.

For the average app, overall retention rates across verticals fell this year by 12 per cent, notes AppFlyer. The biggest hit were shopping, food & drink and travel apps, which was expected given the pandemic and lockdown. While entertainment apps also saw a reduction in retention, it was likely due to the increase in competition as many more players entered the market.
“Overall, if you compare year-on-year, we have seen a decline in retention in both non-organic and organic installs,” Trisal said.

While iOS continues to have better retention, he added the problem is that it contributes only between two to five per cent of the market. This is also the reason why iOS for advertisers and marketers remains the high segment market, given it has a higher retention versus Android.

It also took some time for the market to recover post the lockdown. Categories such as travel, shopping picked up again in September, and in the pre-festive and festive seasons. The financial impact of the lockdown also meant that app marketers had to cut back on budgets, resulting in lower overall spend.

The report looked at a total of 7.3 billion overall installs for 4,519 apps.

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