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Markets to watch: 3 app markets to keep your eye on
July 13, 2021
2020 turned out to be a very good year for mobile advertising, all things considered. On balance, more apps did well during the pandemic than did poorly. They often offered a great solution for people’s needs as they adjusted to life in a pandemic. This was not just the case in the US but across the globe, as well. 2021 could and should be even better globally and there are 3 emerging markets that should act as the bellwether for explosive global growth in mobile. Each market is unique but they do have certain shared similarities that act as key indicators and point to why mobile should see continued growth there, particularly with remarketing adoption and conversions. In each market, we see the ubiquity of mobile within the market, a sizable yet untapped total addressable market, and a positive impact on lifestyles (from a mobile POV) by COVID.
From Australia and India to Indonesia and South Korea, the mobile market in Asia-Pacific is large and diverse, It’s forecast to reach US$92.1 Billion by the year 2027. Prior to the pandemic APAC already led the way in both remarketing adoption and share of conversions per app by region
While eCommerce was already crucial for brands pre-COVID-19, the pandemic caused a major shift in consumer behavior, resulting in an influx of online shoppers. According to Criteo’s Singles’ Day 2020 data, online sales and traffic across Southeast Asia saw record spikes. Malaysia and Thailand saw the highest increase in indexed sales of 600% and 305% respectively, while Singapore generated a 248% increase
The pandemic caused a massive pivot toward app sales, with the share of app sales at 75% for retailers with a shopping app. Southeast Asia had the highest app shares globally. 55% of shoppers in APAC downloaded at least one shopping app (be it retail, food, or grocery/alcohol) during the peak of the pandemic.
The advancement of tech and wider internet coverage is also key for this region. As a result, customers are often on multiple devices from multiple locations at multiple points during the day. Marketers report a 34% increase in their use of mobile apps and a 21% increase in their use of video.
This is particularly important when one considers the growth of the Android base in the region. Android’s market share in Asia is a dominating 82%. In China, Android is also the most popular operating system among smartphone users, with almost 77 percent of the share as of March 2021. Given the changes taking place with iOS around privacy and advertising, the dominance of Android in the region is even more significant.
While APAC led the way in both remarketing adoption and share of conversions per app by region, MENA was a close second with a 35.3% share. Markets in MENA, such as the UAE, Saudi Arabia, and Iraq have demonstrated significantly higher organic versus non-organic growth are potential growth opportunities. The large TAM in this region and the shift to app-based eCommerce means this region bears many of the same hallmarks seen in APAC which make that region so favorable to mobile. In fact, according to AppsFlyer research, the mobile app install rate in the Middle East grew by a staggering 55 percent year-on-year in 2020.
What’s unique about the region, however, is the political situation. The establishment of full diplomatic relations between the UAE and Israel and the subsequent thaw that followed has changed traditional economic head and tailwinds and mobile has exploded as a result. Dubai epitomizes this shift. Often seen as a gateway to Africa, The UAE has deep ties to the region with significant Dubai-based enterprises focused on everything from commerce to telecommunications with partnerships and remote offices throughout Northern Africa and points further south. Stability in the region extends the potential mobile market size exponentially.
In Latin America, the numbers also tell a very compelling story. Revenue in the Apps segment is projected to reach US$53m in 2021. Revenue is expected to show an annual growth rate (CAGR 2021-2024) of 12.38%, resulting in a projected market volume of US$75m by 2024. User penetration will be 14.6% in 2021 and is expected to hit 17.5% by 2024.
COVID has only accelerated the growth of the app economy in Latin America, where facilities increased 29.3%. Mexico (65% more) and Brazil (50% more) stand out in terms of revenue growth.
Latin America was already experiencing significant growth in the penetration of smartphones and mobile apps pre-pandemic.. Since 2014, the rate of smartphone adoption has doubled, reaching 66% of the population. On average, between 2019 and 2020, the number of app installations in the region grew 29.3%.
Brazilian apps stand out the most, with a growth of 125% in its participation across the region.
The biggest categories of growth globally were Games, Business and Finance on Google Play and Games, Business and Utilities on iOS. On a country level, India, Brazil and Indonesia were the largest contributors of growth in downloads on Google Play whereas the US, Japan and Saudi Arabia saw the greatest growth in downloads on iOS.
The mobile advertising story in these regions is similar to the ones we’ve seen play out across other regions over the past decade. Mobile advertising is continuing to grow by leaps and bounds. iOS may be disrupting growth in some more established markets through the application of their privacy changes but there remains a great deal of opportunity for Android (for now) in many emerging markets. All three of the highlighted markets above are Android heavy and all three saw significant shifts in consumer habits as a result of the pandemic. Neither factor is likely to change in the near term - even as we move beyond the pandemic - meaning these regions are ripe for further growth in mobile and app marketers should keep a close eye on them as a result.