Business Standard

Phonepe’s Indus Appstore thrives amid Google billing row

- ARYAMAN GUPTA New Delhi, 22 March

Amid an ongoing tussle between Google and Indian app developers, fintech major Phonepe’s Indus Appstore seems to have benefited. Launched last month to rival Google Play Store and Apple’s App Store, the smartphone mobile app has seen impressive user adoption, crossing over 1 million downloads within a month. As many as 45 per cent of these users are from Tier-ii cities, the company said.

“A growing number of app and game developers have started listing their applicatio­ns on the app store. Thousands of developers have listed their applicatio­ns in the last couple of weeks,” Akash Dongre, Chief Product Officer and co-founder, Indus Appstore, told Business Standard.

Last month, Phonepe announced the launch of Indus specifical­ly for the Indian market to create “a more competitiv­e and localised mobile app store economy for India.” The rise in installati­ons of Indus comes amid an ongoing spat between Indian developers and Google over the tech giant’s billing policy.

On March 1, Google announced it had removed apps from its Play Store for alleged non-compliance with its user choice billing (UCB) system. These apps included Shaadi, Bharat Matrimony, Balaji Telefilms’ Altt (formerly Altbalaji), audio platform Kuku FM, dating service Quack Quack, and Info Edge group’s and 99 Acres.

App developers alleged that Google was using its dominant position to charge exorbitant commission­s of 15-30 per cent for its services. The tussle paused on March 7 after the parties involved agreed to a four-month extension in the payment of pending fees related to services offered by the Play Store, temporaril­y restoring the status quo. The Supreme Court has agreed to hear the appeals that were filed by 10 developers on March 19. Indus’ promise of zero listing fees for the first year and no in-app commission­s for payments made through third-party gateways have put it in the spotlight.

“Discussion­s around the need for an alternativ­e Appstore have intensifie­d in the last few weeks, recommendi­ng Indus Appstore as the alternativ­e,” Dongre said. However, experts say that Indus is likely to face a rocky road ahead if it aims to become a viable alternativ­e to market leader Google.

“Google has a monopoly in the Android ecosystem. Although several apps were delisted, it does not mean that the market will shift from Android to another operating system (OS). It will take some time to build a viable alternativ­e,” said Prachir Singh, Senior Analyst, Counterpoi­nt — a technology market research firm, who is of the view that it may take at least two or three years before Indus can emerge as a viable alternativ­e to Google.according to industry estimates, Google Play Store currently holds a share of over 95 per cent in the Indian market.

To incentivis­e users, Indus is offering a host of features such as making the app store available in 12 Indian languages and offering video-based discovery features to make the user experience more engaging. It also allows users to register using just their mobile numbers, without requiring an email ID.

However, to become a competitor to incumbents, analysts say that Indus would require a strong brand value. This can only be achieved through partnershi­ps with original equipment manufactur­ers (OEMS) to ensure Indus comes pre-installed on smartphone­s in India, they say. Indus has already announced partnershi­ps with some OEMS and is in discussion­s with others, in a bid to make its app store a default choice on smartphone­s in India.

“Indus Appstore has currently tied up with Nokia and Lava, and is in advanced discussion­s with a few other major OEMS. We plan to be in 250-300 million smartphone devices by the end of the year,” said Dongre.

According to data from the Internatio­nal Data Corporatio­n (IDC), neither Nokia nor Lava was among the top ten smartphone makers for the Indian market in 2023, both having a market share of less than three per cent.

To attract a meaningful user base, analysts say, the company will need to partner with larger OEMS, such as Samsung, Xiaomi, Vivo or Realme.

“Since we are operating in an Android ecosystem, the kind of reach and exposure that the Play Store can provide is very difficult to recreate,” said Faisal Kawoosa, founder and chief analyst at research firm Techarc.

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