Lesson 2

A Global Snapshot of the App Economy

As more of the planet’s population acquires smartphones, app downloads and revenue will continue on a dramatic upward trajectory. In this lesson we’ll examine the global outlook at a macro level, highlight trends in emerging markets, and look at broad regional differences in app usage.

The Next Wave of App-Driven Markets, By Country

Direct revenue from app stores make up only one piece of the app economy. In-app advertising and mobile commerce revenue (i.e. physical goods and services purchased via mobile) will continue their surge in a parallel path.

By 2021, we project that Indonesia, Brazil and India will join China and the US as the top-five market leaders in downloads (“downloads” throughout this lesson represent initial installs to mobile devices via all mobile app stores globally).

Together, these five countries will account for 54% of all worldwide downloads — quite a different outlook from the current download distribution. Several markets that today do not generate a significant number of downloads will rise to be among the top five drivers.

Forecast: Top 5 Countries by Downloads
2016 vs. 2021

China: Ahead of the Pack

The Asia Pacific region will remain the world’s largest market in both downloads and revenue through 2021, with China leading the charge. (“Revenue” throughout this lesson is inclusive of consumer spend - versus net revenue paid to publishers - on mobile apps via all app stores globally.) China is expecting to maintain a steady growth at an annualized rate of 19%, with consumer spend growing 24% from 2016–2021.

Consumers in this region have a tendency to spend on entertainment and, more specifically, games. Chinese smartphone gamers tend to support local publishers, so if you’re looking to enter this market, it’s crucial to localize your creative assets and secure area partnerships.

In many ways, China’s WeChat is the world leader in apps. The social messaging app has expanded its footprint to become the primary way for its 889 million monthly active users to pay bills, hail a cab, book appointments and more.

India: Emerging as a Powerhouse

India is an especially interesting market to examine. A large uptake of smartphones in South Asia will help contribute to the staggering growth the region will experience in just five years, with downloads in India predicted to approach 23 billion in 2021. The country is not yet poised to lead in app store revenue, but we’ve forecasted growth at a rate of 75% annually — reaching $2.1 billion in 2021.

Compared to more mature markets, the purchasing power in India is significantly lower due to a range of cultural, economic and infrastructure factors, from poor internet quality to a lack of access to credit. Because of these factors, developers should consider methods of monetization beyond purchases, like advertising, in order to capitalize on the great potential in this region.

The popular dating app Tinder recently opened up its first international office in Delhi, India. Referring to India as one of the “most dynamic and vibrant populations in the world” in an interview with Quartz about the move, Tinder made it clear that it sees a bright mobile future in the country. Look for more companies to follow Tinder’s lead as India’s mobile economy continues to develop.

Other Countries Worth Watching

China and India are just two of the many countries around the world where smartphone use and app adoption are accelerating. Japan, for example, is one of the most lucrative markets in the world with revenue per device expected to reach nearly $105 in the next five years. Argentina and Brazil are growing quickly as well, and S. Korea has the highest smartphone penetration in the world.

Even if you aren't focused on global expansion at this point in your app's lifecycle, understanding how much of the world is devoted to smartphones and daily app usage should be on your radar screen.

Forecast: Top 5 Countries by Revenue
Gross Consumer Spend, Globally, in Billions


Keep Learning

In the next lesson, we'll look at mobile across industries, noting differences and opportunities in gaming, video streaming, retail and other industries.

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