The Indian mobile app market: A huge opportunity

Claire McGregor
by Claire McGregor
October 26, 2015

The Indian mobile app market is attracting a lot of attention recently as a huge opportunity for app growth. Myself and the Chief Bot, Stuart Hall, have just returned from a week in Bangalore, India, where we both spoke at the 2015 Mobile Developer Summit. We have had significant growth from the Indian market at Appbot and the trip really helped us to put that growth into context.

We’ve learnt that building apps for the Indian market is a substantially different ball-game, so we decided to compile our top learnings about this enormous, rapidly growing mobile market for developers and product managers out there who have an app that is or could be relevant to Indian consumers.

Internet penetration is exploding in India

Mary Meeker’s 2015 Internet Trends Report highlighted the fast growth of internet penetration in India. Meeker compares India’s current internet penetration with that of China in 2008 or the USA in 1996. The report cites China as the world’s largest single market by user numbers, but India as the largest by new user additions with over 63MM new users added in 2014, +37% growth YoY.

Bear in mind that these growth numbers are in the context of an already massive internet user base of 232MM in India. India is already the world’s third largest market of internet users, and with current internet penetration at only 19% there is still enormous scope for growth.

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You can read the full 2015 Internet Trends Report here – highly recommend it.

India offers scale on a new level

This seems a somewhat obvious point when you consider that India’s population is 1.252Bn at the time of writing – 4x that of the USA. Different sources quote smartphone penetration in India being in the range of 10-15%, but even conservative estimates put the number of smartphone users only 30MM behind the USA (182MM in December 2014).

Something we hear a lot less about in the popular western tech press, however, is the scale of India’s tech companies. For example, Amazon has serious competition from multiple big e-commerce players in India like Snapdeal and Jabong – brands that don’t engage western markets at all. These companies are able to grow on a fraction of the funding needed by their western counterparts. Growth is cheaper because talent is cheaper (and more abundant), and because the scale of the Indian market alone is so vast – building a massive business that only sells into the domestic Indian market is a viable proposition.

Indian internet users are all about mobile

According to Meeker’s report 65% of people accessing the internet in India do so from a mobile device and 41% of e-commerce in India takes place on mobile. Unsurprisingly, India’s e-commerce leaders are highly mobile:

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India works for global internet giants too

If you have a successful app available in English that’s not available in India you may want to seriously consider testing the Indian market. Again, drawing from Mary Meeker’s awesome report, check out how important the Indian market is for a few small companies you might have heard of:

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Source: 2015 Internet Trends Report

According to the App Annie Index: Market Q3 2015 released last week “India’s growing scale is becoming increasingly clear as it was one of the three largest markets by downloads for both WhatsApp Messenger and Facebook in Q3 2015″.

Indian smartphone growth is currently the fastest worldwide

India is already the third largest smartphone market in the world, despite smartphone penetration figures that lag significantly behind the global average. According to Statista, only 6.2% of Indian people owned a smartphone in 2013.

The same source cites that smartphones made up 21.2% of the mobile phone market in India in 2014, compared with 43% in China and 63.8% in the US.

Given the potential for growth in the smartphone market in India, it’s no surprise that much of the growth seen in the Android app store is attributable to smartphone growth in India. IDC research states that the 26.5 million smartphones that were shipped to India in the second quarter of 2015 represents 44% growth from 18.4 million units for the same period last year.

The App Annie Index: Market Q3 2015 states that India is the 3rd largest market on the Google Play store by downloads, despite low smartphone penetration. The report also states that India is largely responsible for the huge growth in Android OS, which makes sense when you consider that almost 50% of handsets shipped to India in Q2 2015 India are in the – not a space Apple plays in. In fact, India does not yet have a single physical Apple Store.

Many Indians are multilingual

My personal experience of India (speaking at a conference) meant that I probably had a distorted view of the prevalence of English – almost no-one that I encountered during my 6 day visit couldn’t speak enough to communicate with me easily.

To ground my perceptions in reality I did some research. It was difficult to find two sources that matched on the % of Indian nationals that speak English. A Forbes article from 2014 cites around 30% of Indians with some proficiency in English, whilst Wikipedia data suggest around 8% speak English fluently with a further ~22% having some proficiency.

Data on the English speaking proficiency of smartphone users proved impossible to find, but it seems to stand to reason that knowledge of English amongst the middle class who can afford smartphones is likely to be higher than average for the population as a whole. If you have an app in English, India could be an interesting market for you.

Even better if your app is largely language agnostic. If that’s the case, consider localizing your app and app store presence into these popular Indian mother-tongues that all have over 50MM speakers:

  • Hindi (422MM),
  • Bengali (83MM),
  • Telugu (75MM),
  • Marathi (71MM),
  • Tamil (60MM).

Conclusion

The Indian mobile app market represents a rare opportunity for massive download growth, through the magical combination of existing scale and massive growth potential. Android dominates in India, with a heavier focus on low-cost handsets than in other markets.

 

 

 

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