The number of smartphone users in India that was estimated to reach over 748 million in 2020 (Statista.com), has already crossed the 500million mark reaching a penetration rate of 54%, with an estimate to reach 96% by 2040.
As the number of users increase, the amount of software for smartphones are also skyrocketing thereby integrating the role of digital Apps in our lives. These Apps have transformed our lives because of the ease, convenience, comfort, and pace it extends to our day to day lives. Be it ordering chai or coffee, making cashless transactions, buying groceries, stationary to home appliances, booking salon or home repair services, by merely downloading an app, we have gained access and power to use the smartphone in ways that were unprecedented. This rapid adoption has accelerated the pace of our lives to such lengths that now imagining one without these, seems impossible!
From social, to work, to gaming, to health, to shopping; the options are myriad. It is therefore clear that apps will remain hugely popular for years to come and hard to pinpoint what kind of technology, if at all, will overthrow them from their current position. This has surely led to the emergence of the App market or App economy. Coined in the 2010s, the App Economy refers to the Smartphone and tablet revolution whereby a mobile application is available for just about everything.
In such a competitive scenario, therefore the twofold constant challenge for APP developers at hand are:-
1 – How to drive user base growth? and
2 – How to keep the ROI positive long-term for advertising brands?
So, let’s begin by decoding this. Building a big user base and cultivating user habits helps in creating a barrier to competition. Chances are high that a mobile user will keep, not more than one App for the same category, due to limitation of space on mobile phones. This means a single mobile user will have, not more than 15-20 Apps on his / her handset at any given point, especially in case of middle and low-end users. Only if an App is used frequently enough, will it stay on the mobile phone, others will surely be uninstalled.
Secondly, for APPs to make money, in-App purchase and advertising becomes a leading source of ROI. A high user retention will translate into a high repurchase rate, which further helps APPs to generate revenues in the long-run from brand advertisements. Only when ROI is positive, brands can buy new users in the long term.
Thirdly, APP market is like a pool, where, if the ‘water in i.e., new user acquisition’ is more than ‘water out i.e., loss of user base or uninstalls’ then the pool remains full. To ensure that the active user base keeps growing, the speed of new users’ acquisition must be faster than the user loss.
Did you know? with over billion downloads, India took the spot of fastest growing App market in the world in 2020 (Statista.com & Adjust). The digitization and adoption of online technology was further fueled by Covid 19 and multiple lockdowns across the country. Despite being a tumultuous year, numerous digital APP start-ups emerged, and more unicorns were born in the country, proving yet again that mobile is incredibly a shock resistant industry.
Around 12 unicorns came up in India in 2020 and there were 60 start-ups by August 2021. These unicorns ’come from various categories like fintech, e-commerce, ed-tech platforms, and many more. It is expected that these numbers will grow even more, very soon. This meteoric rise in the number of apps has led to increased effort by each one of them to drive installs and grow MAUs (monthly active users). APPs are trying to leverage this huge opportunity due to the fast-increasing mobile penetration in India.
So how do App makers minimize loss and maximize retainer of the user base in this ever-expanding App universe?
Here are a few quick pointers to the process to ensure user acquisition is lean & user friendly. Long and complicated registration processes can certainly make a potential user lose interest in your APP features and content. So, keep it short! Since the user is always burdened with overload of content and information, to captivate and keep him cued in; APPs should be made easy to use with crisp, attractive and engaging content, as it helps create a retention towards the APP brand. A good APP operation also helps in making inactive users LIVE and improve user engagement. More active users lead to word of mouth, further resulting in a more organic high-quality user base.
Parallel to acquisition, is also the retention strategy, especially to contest competition.
Losing a potential user is not just the loss of revenue, but also loss of an opportunity, as it may become an easy catch for the competition. The importance of retention analysis methods and tools should be understood from the beginning, rather than investing in tools and introducing them later in the process, have these in place early on. Do not wait to discover these once your retention rate falls, but have these tools be a part from the very initial stage of user acquisition. Its the first round of seed users that are of utmost priority in retention analysis. Technical tests like AB tests help monitor and analyze the best way to assess user experience, with time and growth of user base, retention strategy improves alongside. To ensure the user acquired is an authentic mobile user it helps to get valuable reports and data on the usage. Fraudulent or inauthentic user acquisition could lead to misguidance and off tracking of the retention strategy which can be devastating. So to bring the true user base to the APP, OEM Appstore works as the best choice for targeting and ensuring coverage. Discoverability and good retention makes an APP highly competitive with resourcefulness, data and healthy cash flows.
Just a word of caution, in the quest to drive installs and grow the MAU at a higher rate, a lot of fraud and misjudgment can lead to erroneous and untoward results. This is where Smartphone OEMs beautifully integrate in the expansion strategy. Since OEM publishers cover the entire Smartphone users, they are the right partners to acquire a huge number of new users in the short term at fixed price without traffic overlap issues. All OEMs have their own app stores which ensures the desired targeting and results in both the quantity and quality of users. Most importantly, the install campaign can only be delivered to the users, who have not installed a particular APP yet, which further optimizes the budget spent, increasing ROI.
The rapid digitization has ensured that more and more brands are transitioning to mobile-first strategy to reach out to consumers. This swift change means that while there would be challenges, however there would also be great growth opportunities. Various reports forecast that by 2022, India will have 37.2 billion downloads a year, a growth rate of 207%, which makes it the fastest growing APP market in the world. The challenge for the marketer today is not only to target and re-target the right user but also to do so at the right time, right place, and in the right context. This is where performance-based marketing is needed, so it can level up the conversion of new buyers in new markets with lower cost, lower risk as well as higher ROI.
Therefore, being more data-driven with the ability to customize the needs of different target consumers in various channels and increase conversion and customer acquisition is the key.
It is a common belief that consumers will never go back to the pre-covid era or habits. Hence, this is the most opportune time for marketers to adapt to changes and consider new targeted strategies to catch consumer attention and shape their behavior.
So, hop on to the brand-wagon and ride on !
Article is authored by Vishal Singh, India GM and Global Commercials VP, Moca Technology Limited.
