Business Standard


Rise of India's mobile economy has everyone scrambling for a piece

- ANOUSHKA SAWHNEY New Delhi, 15 March

India’s mobile economy and the purchasing power of its consumers could pitch homegrown startups against Google again – like they did earlier this month.

Google delisted a number of Indian startups for not complying with its billing policy, which charges up to 30 per cent of money spent through apps downloaded from its Play Store. The apps were restored after the government mediated.

A key reason for tensions could be the rising share of domestic apps in India’s mobile economy. Their share among the top 100 most downloaded apps increased from 29.1 per cent in 2019 to 36.6 per cent in 2022. India’s policy changes have played a role, according to a report by the World Bank.

India has banned more than 200 Chinese apps since 2020 and subsequent­ly “...domestic apps have been quick to fill the void”, said the report.

App-makers are asserting themselves at a time when global research suggests that the mobile economy is becoming increasing­ly valuable.

The share of advertisin­g has grown from $190 billion in 2019 to $362 billion in 2023. The value of consumer spending on mobile apps rose from $120 billion to $171 billion.

Google collects 11-30 per cent of fees from each transactio­n when people spend money on apps. The dominance of Google and other app stores has drawn antitrust attention in the United States (US), Europe and India.

Citizens of richer countries appear to spend more through mobile phones.

India is not among the top 20 by that standard but its rank may well rise as per capita income improves. India has a per capita gross domestic product of around $2,500 compared to over $12,500 in China. The amount of money going as commission­s charged by intermedia­ries such as Google’s app store would accordingl­y increase.

India has the second-highest number of mobile app downloads in the world.

It is second to China and ahead of the US. A larger proportion of Indian users may well be converted into paying customers when incomes rise.

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