Asia: The Leading App Market in the World

Transcription

1 Asia: The Leading App Market in the World January 2014 By Anne Hezemans, Analyst at Distimo Publication - January 2014 Solving the App-Puzzle

2 Asia: The Leading App Market in the World The Asian app store market is a train that can t be stopped. This month s publication takes a deep dive into trends we spotted in Asia and the countries in it. To get a deeper insight into the Chinese market, we have made this publication in partnership with Wandoujia, a leading mobile content search engine for Android users in China. Major Findings Asia is the most lucrative app market in the world. 41 percent of the total revenue globally in December 2013 came from Asia, while North America generated 31 percent and Europe 23 percent. Revenue in Asia increased by 162 percent year-over-year (December 2012 to December 2013), while North America s revenue grew by 46 percent. Japan was undoubtedly the most lucrative country in Asia, followed by South Korea and China, Taiwan, and Hong Kong. Freemium is the leading business model in Asia. South Korea witnessed the steepest growth in revenue. Money generated in the country grew by 271 percent, with Google Play driving most of that growth. Angry Birds Go! was the most downloaded game in Asia in December 2013, followed by 保 卫 萝 卜 2: 极 地 冒 险 (CarrotFantasy 2: Polar Adventure), and 史 上 最 坑 爹 的 游 戏 (The Hardest Game in History). On the Android platform Wandoujia, the most downloaded app was 官 方, a railway ticket reservation app.

3 Introduction Asia is the largest continent in both size and population. And our data is showing that Asian countries are significant players in the app market. As we reported in our December 2013 publication, Japan and South Korea are among the top three countries (the U.S. is No. 1) in terms of mobile app revenue. This month s publication takes a granular look at Asia and the countries in it. In an effort to get even deeper insights into the Chinese market, we made this publication in partnership with Wandoujia, a leading mobile content search engine for Android users in China. We extracted daily Apple App Store and Google Play downloads and revenue estimates from our AppIQ data for the analysis in this publication. We also focused on data for December 2013, unless otherwise stated. The publication will predominantly cover China, Hong Kong, Japan, South Korea, Singapore, Taiwan, and the U.S. But we will also examine some additional countries. The Chinese mobile content search engine Wandoujia provided us with data from its more than 300 million Android users in China, enhancing the in-depth analysis in this publication. Asia Leads the World How does Asia stack up against other continents? Globally, 41 percent of the total revenue in December 2013 came from Asia, while North America generated 31 percent and Europe 23 percent. For Asia the divide in revenue between the Apple App Store and Google Play is almost half-and-half, while for North America, three-quarters of the revenue comes from the Apple App Store and one-quarter from Google Play. The revenue divide in North America also applies to Europe. Clearly, Asia is a different landscape than what s seen in North America and Europe. Revenue in Asia is more evenly distributed between the Apple App Store and Google Play, while the Apple App Store generates the lion s share of revenue in North America and Europe. Below is a representation of the relative growth of each continent in the last year. In the below table, we re comparing December 2013 to December All continents show revenue growth in the past year, but there are big differences among the continents. Revenue growth in Asia annihilated all other continents, seeing revenue increase 162 percent year-over-year (December 2012 to December 2013). Revenue swelled in Europe and North America by 45 percent and 46 percent, respectively. Australia saw the least growth, advancing revenue by 23 percent. In conclusion, we can say that Asia is the leading continent in terms of revenue and had the greatest increase in revenue in the last year. Aggregated Apple App Store and Google Play Revenue Growth Comparing December 2013 to December 2012 Africa 114% Asia 162% Australia 23% Europe 45% North America 46% South America 56%

4 Explosive Revenue Growth in Asia We already illustrated that Asia is the No. 1 continent in terms of revenue and had the highest growth throughout last year. Below, we separate total revenue in Asia by app store ipad, iphone, and Google Play. As we stated earlier, revenue in Asia expanded by 162 percent across the last year. The chart below demonstrates that the spike in revenue is due to Google Play. Revenue from Google Play more than quadrupled throughout the last 12 months. On the Apple App Store, revenue for iphone nearly doubled (94 percent) and revenue for ipad grew by 64% (which is still more than the total growth in Europe or North America). Total Revenue Growth in Asia by App Store December December Asia - Apple App Store - ipad Asia - Apple App Store - iphone Asia - Google Play Top Countries in Asia When we separated revenue by country in Asia for December 2013, we dug up the following breakdown: Japan was undoubtedly the most lucrative country, followed by South Korea and China. Below the top three were: Taiwan, Hong Kong, Singapore, Thailand, Turkey, Indonesia, and Malaysia. To put into perspective the enormous difference in revenue between the top Asian country Japan and Malaysia, Japan s revenue is 77 times that of Malaysia s. The extremely disproportionate revenue share among Asian countries led us to believe that the market isn t evenly divided. Top 10 Countries in Asia by aggregated Apple App Store and Google Play Revenue December 2013 Japan South Korea China* Taiwan Hong Kong Singapore Thailand Turkey Indonesia Malaysia* * For China, Malaysia no Google Play revenue is included.

5 Top 6 Countries in Asia split by Apple App Store and Google Play Revenue December 2013 South Korea China Hong Kong Japan Taiwan Singapore ipad iphone Google Play We already presented the huge revenue escalation in Asia; after we calculated the revenue growth for the top Asian countries, the numbers looked even more impressive. South Korea witnessed the steepest growth in revenue. Money generated in the country grew by 271 percent, with Google Play driving most of that growth, but also the revenue of the Apple App Store for iphone grew more than for example the revenue in the United States. Aggregated Apple App Store and Google Play Total Revenue Growth by Country and App Store Comparing December 2013 to December 2012 Apple App Store - ipad Apple App Store - iphone Google Play Total China 111% 264% No data available 203% Hong Kong 88% 105% 2053% 211% Japan 72% 77% 282% 141% South Korea 29% 94% 342% 271% Singapore 43% 29% 1318% 105% Taiwan 63% 87% 263%* US 43% 21% 140% 43% *No December 2012 data is available for Taiwan, so data for Taiwan covers March 2013 to December 2013.

6 Now that we ve analyzed the continent of Asia and its corresponding countries, it s time to take a look at the business models apps have deployed in the Apple App Store. Compared to the U.S. all the top Asian countries make more revenue from in-app purchases (IAP) than from one-off revenues. China led the way, with apps generating 96 percent of revenue from IAP. Japan and South Korea were closely behind China with 94 percent and 91 percent of total revenue from IAP, respectively. The freemium model is across the board the dominant business model in Asia. Business Models in the Apple App Store by Country December 2013 China Hong Kong Japan South Korea Singapore Taiwan United States 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% One-off revenue In-app revenue from paid apps In-app revenue from free apps The Size of Locally Popular Apps We took a look at the top 300 apps in Asia, checking to see the number of countries each app ranked in. If an app was only ranked in one Asian country, we defined it as locally popular. In the table below, we display the percentage of locally popular apps. In just a glance, we can see that the percentage of locally popular apps differs greatly among Asian countries. In the United States, between 25 to 32 percent of apps were locally popular. In Asia, Singapore had the lowest proportion of locally popular apps (between 10 and 13 percent), while Japan had the highest proportion (60 percent 72 percent). The proportion of locally popular apps is directly correlated with specific languages and alphabets for some Asian countries, as well as developers investing in the localization of their apps on the leading platforms. In South Korea, the popular platform Kakao has a lot of Kakao-dedicated apps, while in Japan, the LINE platform is extremely popular. Top 300 apps in December % locally popular apps Apple App Store for ipad Apple App Store for iphone China 49% 55% 65% Hong Kong 13% 16% 17% Japan 60% 72% 70% South Korea 49% 60% 61% Singapore 10% 13% 12% Taiwan 22% 28% 25% United States 25% 32% 26% Google Play

7 Top Apps in Asia The top performing apps in Asia on the Apple App Store in terms of downloads are presented below. In the rightmost column the top three country breakdown is included. Angry Birds Go! Was the most downloaded game in Asia in December 2013, followed by 保 卫 萝 卜 2: 极 地 冒 险 (CarrotFantasy 2: Polar Adventure), and 史 上 最 坑 爹 的 游 戏 (The Hardest Game in History). Most downloads came from China. Apple s 12 Days of Gifts app was the only exception it was downloaded the most in Japan (47%), Taiwan (10%), and Turkey (9%). Top Apps in Asia on the Apple App Store by Downloads December 2013 App Publisher Country Breakdown 1. Angry Birds Go! Rovio Entertainment Ltd 1. CN 51% / 2. JP 12% /3. TH 7% 2. 保 卫 萝 卜 2: 极 地 冒 险 Beijing Kai Luo Tian Xia Technology Co., Ltd. 1. CN 99% / 2. HK 1% / 3. TW 0% 3. 史 上 最 坑 爹 的 游 戏 ipeaksoft Inc. 1. CN 96% / 2. TW 2% / 3. MY 2% 4. 天 天 酷 跑 Shenzhen Tencent Computer Systems Company Limited 1. CN 100% / 2. HK 0% / 3. MY 0 5. 全 民 英 雄 Sixjoy Hong Kong Limited 1. CN 100% 6. Asphalt 8: Airborne Gameloft 1. CN 68% / 2. TR 6% /3. JP 4% 7. 欢 乐 斗 地 主 (QQ 游 戏 官 方 版 ) Shenzhen Tencent Computer Systems Company Limited 1. CN 99% / 2. HK 1% / 3. MY 0% Days of Gifts itunes 1. JP 47% / 2. TW 10% / 3. TR 9% 9. 支 付 宝 钱 包 ( 余 额 宝 官 方 客 户 端 ) Alipay.com Co.,Ltd 1. CN 98% / 2. HK 1% / 3. TW 0% 10. My Talking Tom Out Fit 7 Ltd. 1. CN 52% / 2. JP 9% / 3. TR 9% Compare with China: Data from Wandoujia s Mobile Content Search China s Android landscape is different from the rest of the world. Only 3.5 percent of devices in China have Google Play services installed, which is required in order to run Google Play and other Google apps. Wandoujia is a mobile content search engine for Android, where the largest content vertical is apps. The company started in Now it has more than 300 million users. We have some data from them we d like to compare here to get a better view on the Chinese market. According to Wandoujia foreign games have a big opportunity to reach hundreds of million of gamers in China. Foreign titles are still wildy popular: Temple Run 2, Subway Surfers, Angry Birds, Fruit Ninja were among the top seven titles in These casual titles are truly worldwide hits, China included. In apps, not so much. Local developers dominate in non-game apps (with only two foreign apps in the top 30). Here, China surely has the world s most unique app ecosystem: like the PC internet before it, there s hardly a foreign app to be found. China s domestic market is so large that it can support an entirely independent ecosystem from the rest of the world. The discrepancy in Wandoujia vs. the Distimo Google Play data (87% local app downloads vs. 65% locally popular) is likely because the less than 3.5% of Chinese users who use Google Play are a relatively international demographic.

8 Wandoujia s Business models All of the games are freemium titles, so all revenue is from in-app purchases. As in PC internet gaming, this model is completely dominant in China. In PC gaming, at first Western companies thought that China s market would never amount to anything because all games were pirated. But Chinese companies found that a model borrowed from Korea, free games with in-app purchases, did work. China has subsequently become the world s largest PC gaming market, fueling the rise of giants like Tencent, Netease, Sohu, Shanda, and others. The same dynamics are now at play in mobile games. Wandoujia s data shows that games in China, like the rest of Asia, are also starting to monetize. From April to November 2013, the average revenue per paying user for massively multiplayer online games on Wandoujia grew 400%. That s even faster than Japan (up 282% YoY) and Korea (342% YoY), according to the Distimo data on overall revenues in Google Play. Android users have a hungry appetite for in-game purchases, bucking the old myth that Chinese users won t spend money for services. Below we show the top apps In China for both Wandoujia and the Apple App Store for December Of the top 10 apps from Wandoujia only one game showed up, while nine apps from other categories have a place in the top 10. In the Apple App Store it is the other way round, eight games are listed, and just two apps from non-game categories. The lists are unique; no apps show up in both lists. The No. 1 app from Wandoujia is a railway ticket reservation app. With the Chinese New Year coming up at the end of the month, people are preparing to book their rail tickets to go home. The highest ranked app for Apple App Store 保 卫 萝 卜 2: 极 地 冒 险 (CarrotFantasy 2: Polar Adventure) was ranked 2nd in top Asian apps. Top Apps in China in Wandoujia and Apple App Store by Downloads December 2013 Wandoujia Apple App Store 官 方 版 保 卫 萝 卜 2: 极 地 冒 险 2. 终 极 手 电 筒 史 上 最 坑 爹 的 游 戏 3. 土 豆 天 天 酷 跑 4. 百 度 一 键 root 全 民 英 雄 5. 铃 声 多 多 欢 乐 斗 地 主 (QQ 游 戏 官 方 版 ) 6. 字 体 管 家 支 付 宝 钱 包 ( 余 额 宝 官 方 客 户 端 ) 7. 我 爱 猜 对 错 Angry Birds Go! 8. 百 度 爸 爸 去 哪 儿 手 机 游 戏 9. 来 往 天 天 飞 车 10. WPS Office 移 动 版 淘 宝

9 Recap In this month s publication we uncovered that Asia generated the most revenue globally and had the greatest revenue growth throughout the past year. Now no one can deny the enormity of Asia s presence in the mobile app space. On a country-level, the Asian countries that generated the most revenue included: Japan, South Korea, China, Taiwan, Hong Kong, and Singapore. Lastly, most apps in Asia generated money using the freemium business model. Publication - January 2014 Anne Hezemans Webinar If you want to know more about the Asian app market, please join our webinar on Tuesday 4th of February at 6:00 PM (CET)/ 09:00 AM (PST). Feel free to send us your questions regarding this topic in advance and we will try to cover those points in the webinar. We would like to invite you to send us your questions related to the topics covered in this publication.we will try to include some answers in the webinar, so please send your questions in advance. About Wandoujia Wandoujia was established in April 2010 with the vision of becoming Mobile users dominant gateway to discover, download, enjoy, and manage their content anytime, anywhere. Today it is a mobile content search engine that has created innovations with widespread influence over China s mobile internet industry. Wandoujia has more than 300 million users, with daily app downloads exceeding 30 million. Its search index provides over one million choices in multiple content verticals: apps, videos, and ebooks, as well as supplying wallpapers, music, and themes from more than 130 content providers. Wandoujia also publishes the China App Index, a monthly report on trends in mobile apps: appindex.wandoujia.com Contact us For sales inquiries, please contact us at sales@distimo.com or call For press inquiries please contact Mindy M. Hull at mindy@mercuryglobalpartners.com or call (The Netherlands) or (San Francisco, United States)

10 THE MOST ACCURATE APP MARKET TRACKING GLOBALLY Amsterdam London New York San Francisco Tokyo

11 AppIQ Get smarter. Get AppIQ! Benchmark any app s downloads and revenue Identify market, store and investment opportunities Analyze market shares Plan marketing campaigns more efficiently THE MOST ACCURATE APP MARKET TRACKING GLOBALLY Distimo AppIQ allows users to: Track and compare app downloads and competitor app downloads: Analyze an app s market share and compare download figures versus a competitor s in one chart. The chart shows the daily downloads and can also be aggregated per week or month. Events such as price changes, featured listings and version updates are also included, and allow the user to analyze the influence of each event on downloads. Analyze competing app revenues including those from in-app purchases: View daily revenues from competing apps side-by-side with your own app and get extensive insight into the revenue generation of different business models, revenue per country, and platform. Identify the most popular and upcoming new apps: The Leaderboard provides the daily, weekly, monthly and quarterly rankings of all apps, and can be viewed by app store, country, category, device, and free/paid/gross. All of the major app stores are supported, and for ios and Google Play and the Amazon Appstore, the daily volumes per individual app are also provided. AppIQ users see the daily downloads and revenue from in-app purchases and one-off fees. Developers can also use the Leaderboard to see how many downloads are needed to achieve a certain ranking on any given day. Learn more about AppIQ at Apple Mac App Store and Windows Phone/Windows Store coming soon!

12 Disclaimer This work is licensed under Creative Commons License Attribution Noncommercial-Share Alike 3.0 Netherlands. This license is available for download at This license ables you to use, copy, spread, and build upon this work non-commercially, as long as you credit Distimo and license your new creations under the identical terms. Distimo 2014, 2013, some rights reserved. All trademarks are the property of their respective owners.