Operating systems: Indonesian smartphone users lag behind because the country has 93% Android users. Apps on Google’s Play Store tend to be free, while being part of Apple’s ecosystem more often requires paying a small sum for an app. It also forms a habit of paying.In comparison, in Vietnam it’s 64% Android, and in the Philippines, 83% people use it. Globally, the iOS App Store generates much higher revenue than Google’s Play Store—App Store revenue was US$25.5 billion in the second quarter of the year ended 2019 vs Play Store’s US$14.2 billion in the same period.
Growing app in Southeast Asia
The growth rate of new app downloads in Southeast Asia is the highest in Indonesia. Singapore and Thailand aren’t downloading much. Interestingly, the countries which have seen a slowdown in new app downloads have higher growth rates of in-app spend.
In other words, there are two kinds of users. The download-use-chuck-download variety, and the download-pay-keep variety. That these user behaviours also extend to the macro level of a whole country shows the state of the economy.
As an economy matures, long-term users become more willing to spend for apps and in-app purchases. Take the infamous Candy Crush, for example. It has been around since 2012, and while the game no longer features in top downloads, it was still raking in record numbers in revenue many years after its inception thanks to high in-app spends.
Different Southeast Asian countries are at different stages of economic maturity. While Singapore is on one extreme end of the spectrum, Indonesia is in many ways the region’s most immature app economy, still demonstrating high growth rates of new downloads, but slow progress in monetisation.
According to Chaudhary of M&C Saatchi, growth in downloads will only happen in markets where there’s still room for internet penetration. In an emerging market like Indonesia and the Philippines, for example, internet users make up 64% and 67% of the population, as per the We Are Social report, versus Singapore’s 88% and Thailand’s 75%.
App spend, on the other hand, is directly related to per capita income the market has, said Chaudhary. But considering that Indonesia and the Philippines have a much bigger population than, say, Singapore, Chaudhary sees these emerging markets surpassing the city-state’s app spend at some point.
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Population by country
That’s despite Singapore being an affluent market. “As the affluence of the huge emerging markets increases, you will see higher growth.”
It’s not just Singapore’s ranking that could tip though. With internet penetration, rapidly evolving technology, and a willingness to spend, apps are only going to mushroom. Even Facebook’s Fantastic Four will need to reinvent to maintain that iron grip over Southeast Asia.