Indian app market estimated to be around Rs 150-200Cr; could grow up to Rs 2,000Cr by 2016: Avendus report

30 Sep, 2013

AvendusThe Indian app market was estimated to be Rs 150-200 crore during 2012, as per a study released by Avendus Partners. The total monthly revenues earned by Google Play and Apple app store from Indian customers was Rs 27.5 crore in October 2012 or an annualised run-rate of Rs 330 crore. Based on these estimates, the market size for 2012 has been pegged to be somewhere Rs 150-200 crore.

As per the study, the basis of these estimates is the cumulation of various facts like the number of app downloads from the Google Play Store and Apple app store, the proportion of paid apps along with other factors like in-app purchases, apps downloaded from Nokia store and revenues generated by apps purchased via the telecom operators' app stores.

The number of apps downloaded from Google Play in India reached 150 million in October 2012. Add to this the number of downloads from the Apple App store in India which was 12 million in October 2012. Of these apps, 9.6 per cent from Apple app store were paid while just about 0.5 per cent from Google Play Store was paid. The average price for a paid app was over Rs 100 across devices, the study said. Based on these numbers, total monthly revenues earned by Google Play and Apple App store were deduced.

Growth path for next few years

As per the study, the Indian app market could reach Rs 2,000 crore by 2016. "We have tried to estimate the potential for Indian paid apps market in 2016 using two methods—by estimating the potential revenues of the different application stores in 2016 based on how they have performed globally and in India to date, and by drawing parallels between the evolution of customer spend (ARPU) patterns on mobile telecom in India and the expected evolution of customer spends on digital content on mobile Internet in India," stated the study. As per the estimates, Google Play and Apple App store are expected to cross Rs 800 crore each by 2016. Based on estimates for mobile Internet users in India, the number of active users on Android is expected to reach around 240 million by 2016 (90 per cent of the total 3G user base). The number of apps downloaded per user in India is around 35, close to the global average. This number is expected to remain the same with lower usage by new users. A user average of 35 would imply around 8.4 billion apps being downloaded in India by 2016.

Coming to paid apps, at 35 apps per person, 2 per cent of total downloads being paid, and a price of Rs 52.5 per paid app (half the current value), the Google Play paid apps market in India could be worth Rs 880 crore by 2016. Similarly for iOS platform, there were 1.42 million and 0.38 million paid apps downloaded, respectively, in June 2013. With the increasing number of Apple devices, a higher percentage of paid apps, and higher prices, Apple is expected to have a significant impact on the paid apps market in India.

It is anticipated that Apple is likely to match up to Google Play revenues by 2016. Combining revenues from Google Play and iOS app store with those from other avenues including Nokia's app store, on-deck content sales of telcos, etc., paid apps is likely to be Rs 2,000 crore market by 2016.

Coming to timeshare, social networking apps rule the roost in the Indian market. Around 48 perc ent of time is spent on social networking apps followed by 'others' at 26 per cent and utilities at 10 per cent. In global context though, games are most popular with 43 per cent of timeshare going on gaming apps followed by social networking at 26 per cent followed by utilities and others.

(Edited by Joby Puthuparampil Johnson)