FICCI-KPMG-Report-13-FRAMES

96 The power of a billion: Realizing the Indian dream
“
India will become the third biggest mobile
app market by 2014, but the challenges are
distribution, app discovery and payments.
Android should own over 60 percent of the
market by then, which will make it even
harder to distribute and monetize apps
given the fragmented Android ecosystem
Top smartphone apps
- Aakrit Vaish
Managing Director,
Flurry India
App Rank App Name App Category
1 WhatsApp Messenger Chat
2 Facebook Social Networking
3 Google Play Store App Store
4 Nimbuzz Chat
5 YouTube Video Streaming
6 Facebook Messenger Chat
7 Gmail Email
8 Tubemate Video Streaming/
Download
9 News Hunt News
“
base, app developers will selectively focus on serving key
platforms such as Android, with Windows Phone expected
to gain traction on the back of increased adoption by OEMs.
While premium pricing of Apple devices will constrain
App store download volumes, scope for monetization will
remain high on account of a favourable user demographic
and ease of transacting on the platform.
India has all the prerequisites for a vibrant app economy,
in terms of a growing base of access devices, growing
disposable incomes and adequate local development
talent. The emergence of a system enabling seamless
transactions will prove to be the inflection point for
monetization over the coming years.
Online Advertising
Monetization in the new media space in India continues to
remain dependent on revenues from advertising. Growing
at close to 40 percent, the online Ad market (excluding
mobile) in India touched INR 20 billion in 2012, and is
expected to grow at a 32 percent CAGR to reach INR 74
billion in 2017 14 . Mobile advertising currently accounts for
a small share of the market, estimated at INR 1.7 billion 14 .
However, it is expected to grow significantly in the coming
years, as advertising catches up with usage and time spent
on mobile. Historically, there have been challenges related
to screen size and return on investment (click through rates)
for display advertising in mobile. However, a number of
innovations in ad formats, growth in smartphones, larger
screen sizes and penetration of tablets will ensure that
mobile advertising continues to grow at a fast pace.
Indian Digital Advertising Market
© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
10 Google Maps Navigation
Source: Nielsen Informate Mobile Insights 2013
Top Smartphone Apps
The Indian app economy is quickly gaining traction, enabled
by growth in smartphone and tablet penetration, and driven
by availability of international and localized content on
several app stores operated by OEMs and mobile network
operators.
Estimates indicate that approx. 100 mn apps are
downloaded monthly in India, and this could surpass 5bn
downloads per annum within 3 years 12 .
India is the fourth largest market for Android apps, with
App downloads by Android users in India over the past year
exceeding downloads over the past 3 years combined 13 .
The introduction of local currency pricing in Apple’s App
store is expected to further spur consumption.
As is the case globally, monetization is likely to occur
through a combination of upfront paid and ‘freemium’
microtransaction based apps. Given the complexity of
catering to multiple standards across a fragmented device
12. KPMG in India analysis, Industry discussions conducted by KPMG in India
13. “India fourth-largest market for Android app downloads: Google”, NDTV, October 19, 2012
14. Industry discussions conducted by KPMG in India
Source: Industry discussions conducted by KPMG in India
Given the historical infrastructure bottlenecks with
wired broadband and under investment in 3G, the Indian
digital advertising industry is starting from a low base.
It is expected to be amongst the fastest growing digital
advertising markets in the world going forward.