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(Credit: Towering Goals/iStockphoto)

India's app economy is blossoming. In 2017, India outpaced the US as the world's No. 2 market in app downloads with 12.1 billion. The country is forecasted to have 37.2 billion app downloads per year by 2022, according to App Annie. And, 97 percent of India's smartphone users rely on apps over browsers and websites.

All of this makes it a prime spot for future app development.

"With the increase in better Internet connectivity like 3G and 4G network[s], the influence of such grew the app market in India drastically," Dharmesh Patel, Chief Technology Officer of Numbertank told Download.com.

The numbers in India reflect a ravenous appetite for a mobile experience. Patel said this was due in part to India's large youth population and the Indian government promoting the idea of "Digital India."

In addition to the accessibility of 4G, cheaper smartphones from China have been a key factor in India's market maturation.

While the US's introduction to smartphones and apps was a steady stream over several years, India's has been condensed into just a few years.

Forbes reported that a new mobile user in India has more than two million apps to pick from.

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(Credit: App Annie)

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Affordable 4G data

The 2016 upstart Indian mobile provider Jio, backed by Reliance Global Call, racked up 177 million users in less than 18 months. Reliance Jio topped mobile telecom businesses like Airtel, Idea, and Vodaphone in 4G availability by 27 percent according to recent data.

Between all the telecoms, India has more than 200 million users on a 4G network.

Instead of working toward speed, operators are focused on stability for now.

"In the last six months, we have measured substantial improvements in 4G availability in India, as operators have made access to LTE signals a new priority," OpenSignal reported. "4G Speeds, however, remained stagnant, but that could soon change as the wave of consolidation clears the way for new high-capacity networks."

Forbes said the average subscriber's data usage grew 25 times in a three-year span. In 2014 the average user consumed 62 MB per month. By 2017, the number had skyrocketed to 1.6 GB per month.

Cheaper devices

Chinese smartphone brands like Xiaomi, Vivo, and Oppo dominate the Indian market. The devices are virtually on par with the top US products with high-quality cameras, high resolution displays, AI technology, and fingerprint scanning, but at far less than the US price tag for premium phones.

For instance, Vivo's V11 Pro, which launched in September, costs 25,990 rupees, or about $380 US dollars. Apple's top-end iPhone XS Max can cost up to $1,449.

During India's festival season, Xiaomi sold a record 8.5 million devices. At the beginning of November, Vivo and Oppo were also shipping millions of phones.

Samsung still holds second place in Indian popularity, Vivo is third, and Oppo is fourth.

"Xiaomi's [localization] strategies, such as adding tailored designs for local consumers in their products, as well as doing local promotion, work well in India," Liu Xingliang, head of the DCCI Internet research institute, told the Global Times.

A downside to the inexpensive phones is the lack of storage space. It's likely the phones will get more storage over time, but for now, India's users have to delete apps to make room for new ones.

Popular apps

According to the Economic Times in India, two of the most popular apps in India are Tinder (iOS, Android) and Netflix (iOS, Android).

Earlier this month Netflix announced eight new Indian original films and one original series. In addition, the company is testing out lower subscription prices in parts of Asia. Netflix clearly wants to seize the massive market opportunity.

Other popular apps include Facebook (iOS, Android) and Messenger (iOS, Android), UC Browser, WhatsApp (iOS, Android), SHAREit, JioTV, Airtel TV, Hotstar, Truecaller, and Vigo Video (formerly Hypstar).

Patel said Indians are adapting to digital payment methods and enjoy chat and social media apps.

It's not surprising that Netflix, JioTV, Airtel TV, and Hotstar (an app similar to Netflix and Hulu) would be popular downloads. Many users in India don't have access to wired broadband.

As far as devices, many of the smartphone advertisements focus on video display. OpenSignal's analysis found that Airtel, Jio, and Vodafone were in a virtual tie for mobile video experience, each coming within a point of the other.

How India's developers can profit

If apps are taking up such a large portion of Indian users lives, Indians should have opportunities to develop the market internally and profit.

The app economy in India is expected to provide about one million employment opportunities during the 2017-2018 fiscal year, according to Sahil Sharma, a business writer for iamWire.

"The major challenge that app developers in India face is monetizing their idea into a successful revenue [stream]," Sharma said. "Incidentally, most of the apps listed on Google Play are free which mean developers earn major money through advertising."

Sharma said more than half of India's internet users detest online ads.

Without advertising, developers can't rely on a non-organic install. A non-organic install means that the user downloaded a program based on an advertisement.

That means building and marketing an app can get incredibly expensive depending on the services used.

"In India, the approximate cost of building a simple app can cost from $5,000 to $8,000. Similarly, the cost for building a complex app may rise up to as much as $40,000," Mehul Rajput, CEO or Mindinventory Technologies wrote on Tech.co. "There are a number of reasons that lead to an increase in development costs--for example, making regular updates to the application, handling user problems, managing reviews about the application, and so on."

Indian users have a unique opportunity in this landscape to tailor apps for specific local needs. While social media, gaming apps, and the like are popular on a grander scale, niche apps can serve particular needs--but the monetization challenges could be a limiting factor in serving small markets.

The future of India's app market

According to Forbes, 337 million smartphone users in India are experiencing the kind of app experiences that high-speed data can provide for the first time.

However, 337 million is only a quarter market penetration. The landscape in India presents a massive opportunity for app developers across the world who want to target the Indian market with.

FOLLOW Download.com on Twitter for all the latest app news.

Takeaways

  1. India's app economy has blossomed over the last few years, becoming the world's second largest market for app downloads and making it a potential hotspot for app development.
  2. The rapid growth was due in part to the government's "Digital India" promotion, the spread of 4G, and an influx of powerful, low-cost smartphones from Chinese manufacturers.

Also see

Shelby is an Associate Writer for CNET's Download.com. She served as Editor in Chief for the Louisville Cardinal newspaper at the University of Louisville. She interned as Creative Non-Fiction Editor for Miracle Monocle literary magazine. Her work appears in Glass Mountain Magazine, Bookends Review, Soundings East, and on Louisville.com. Her cat, Puck, is the best cat ever.