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China’s going to take a bigger chunk of world’s $110b app economy in 2018: report
In the past decade, the whole world has witnessed how mobile phones and smart devices have revolutionized the way people live and think. As the iPhone, the forerunner of this evolution turned 10 in 2017, Apple’s App Store and competing platform Android Market are celebrating their tenth anniversaries in 2018.
The decade-long development has brought the app economy to maturity in a number of ways and the sheer number of apps is perhaps the most impressive aspect. App analytics firm App Annie pointed out in its latest report that the iOS App Store and Google Play had more than 2 million and 3.5 million apps available respectively as of the end of October 2017. Also, the growth shows no sign of slowing with iOS App Store and Google Play seeing 50,000 and 150,000 new apps in October this year. Maturation also takes the form of longer user engagement time, larger in-app consumption and wider industry coverage, the report pointed out.
The continued evolution of markets across the globe has led to the continued growth of app monetization. App Annie forecasts that worldwide consumer spending across all mobile app stores will grow approximately 30% year on year to exceed $110 billion in 2018.
Developing countries are forming a stronger force in boosting this new growth. China will continue to be a key market for app store consumer spend in 2018, growing at a rate that will “significantly outpace the rest of the world,” the report says. While China, a top market for iOS App Store consumer spend, will become a major driver for growth in the iOS system, spending on Android phones will be driven by emerging markets led by India and Brazil.
China is one step ahead of global tech trends
China has been commonly stereotyped as a follower in innovation, where local entrepreneurs copy technologies or business models already proven to be successful in overseas markets. But that’s no longer the case. In its detailed post, App Annie made 10 app economy predictions for the coming year. China has been playing a leading role in a number of these new trends.
While VR boom is slowing, AR is taking a significant step forward toward joining the mainstream. China powerhouses Alibaba, Baidu and Tencent are all engaged in the initiative. Inspired by Pokémon Go, early last year Alipay released its location-based Augmented Reality (AR) hongbao campaign, allowing users to hide and collect hongbao (red envelopes tradtionally containing money) in real locations by scanning objects using their smartphone cameras. Alibaba’s most recent partnership with Starbuck is making the latter’s stores more interactive with AR technologies.
“In the past, it has been easy to segment retailers between bricks-and-clicks and digital-first. However, these lines are becoming increasingly blurred by acquisitions, partnerships and innovation. These activities are impacting all dimensions of the shopper journey, including in-store, in-home and delivery,” says the report.
App Annie expects these changes will cause consumers to change their shopping habits in 2018, which will in turn begin to redefine the relationship between and even the very nature of existing retail channels (e.g., mobile apps, web, brick-and-mortar). Blurring between the online and offline worlds is already in full swing in China, and we have a dedicated term for it: “new retail“.
The report also pointed out that cash registers’ longstanding role in the checkout and payment process will be reduced, or in some cases replaced, by mobile. For many consumers, mobile will be a core part of the shopping experience regardless of the channel they choose. China’s ubiquitous mobile payment solutions and the rise of unmanned stores all point to this prediction coming true here.