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Agencies 4 Growth Festival Logo
Agencies 4 Growth Festival Logo
Agencies 4 Growth Festival Logo

The link between the coronavirus epidemic and mobile transformation

Mobile has played an integral role in the way we work, communicate, entertain, and be productive. Mobile is at the centre of our connected lives and serves as the primary interface through which we interact with the world around us.

In 2019, apps generated a record 204 billion downloads, up 45% since 2016. An average user spent 3 hours and 40 minutes per day on his/her mobile phone with 50% of the time spent on social and communications apps. The recent coronavirus epidemic has amplified the role and relevance of mobile even further.

In China, for instance, smartphone users downloaded apps through Apple’s online store a record 222 million times during the week of February 2 (the period after Chinese New Year when consumers were advised to work from home). This post Lunar New Year period, which typically sees a sharp downturn in app downloads, instead saw a remarkable uplift as millions stranded at home downloaded new games and experimented with apps to provide an alternative method to resume daily activities remotely.

Ding Talk - an enterprise communication and collaboration platform that was previously outside of China’s top 250 apps was the Apple store’s daily download leader for most of February. Among other business apps that have taken a leading position during the Coronavirus epidemic include Lark, Tencent Meeting, and Huawei Cloud WeLink.

That is not all - education, entertainment, and photo & video also saw increased downloads with gaming leading the ranks.

Globally, games make up 72% of all app store spend. China, the largest market, comprises 40% of the global spend. The current downloads have further reinforced that gaming is not only one of the leading leisure activities on mobile but also a top profit centre for gaming app publishers. Tencent, China’s largest mobile games publisher, saw its stock dip to HKD $373 per share following the outbreak of Coronavirus but rebounded swiftly afterward to reach a historic peak of HK$419.80 per share on 17 Feb; a 12.5% increase.

These effects from Coronavirus demonstrate the maturity of the app ecosystem in China which the likes of Tencent, ByteDance, and Alibaba are now seeking to export via their investment arms to markets in Asia.

Countries like Singapore, Taiwan, and Hong Kong have small yet highly digitised markets which are perhaps the most suitable for building a lucrative mobile app ecosystem. Emerging markets such as Indonesia and Vietnam, which have traditionally been mobile-first, will benefit from economies of scale while India is increasingly becoming a growth market for Chinese app publishers as users eagerly adopt Chinese apps including gaming, short-form video (like TikTok), messaging, and even dating.

To capture India’s 600 million-strong internet user base - the second largest in the world, companies like Huawei are building their 5G networks in India’s 2nd and 3rd tier cities.

As a region, Southeast Asia holds the most promise with some 90% of Southeast Asians coming online primarily through smartphones. The internet economy for the region leapfrogged fixed-line internet and has moved past the $100 billion mark in 2019. The growth of mobile in the region should give marketers sufficient confidence to create mobile-first initiatives that reach and engage their audiences.

We have already seen some of the region’s homegrown brands disrupt traditional forms of business for ride-hailing, e-commerce, entertainment, fintech, and gaming. These local apps have become the region’s most promising unicorns in the past decade.

In fact, mobile-focused companies saw an 825% higher average IPO valuation in 2019. Of the three largest IPOs in 2019, Alibaba was valued at US$ 167.6b; followed by Prosus & Naspers at US$ 100b and Uber at US$ 82.4b. Alibaba’s 11.11 saw a record-breaking US$ 38.4b spent globally within 24 hours of Single’s Day in 2019, with mobile driving the lion’s share.

It is apparent that mobile transformation is unstoppable.

Following the global financial crisis in 2009, digital gained ground as many companies started to diversify budgets, initially allocating a humble 5% to digital campaigns.

The coronavirus epidemic has shown us that the next decade will be marked by those companies that accelerate mobile transformation.

Cindy Deng is the managing director of App Annie for Asia Pacific.

All stats unless hyperlinked are sourced from App Annie’s annual State of Mobile report.

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