Chinese mobile users forked out 40 percent of the $101 billion spent globally on apps in 2018
Smartphone growth is slowing down globally, but users last year spent on average three hours a day — or one-and-a-half months a year — on their mobile phones and downloaded a total of around 194 billion applications, according to a report.
That was despite a continued slowdown in China’s smartphone market as well as a temporary freeze in approvals for the sale of certain games.
As one of the world’s largest smartphone markets, China also accounted for almost 40 percent of the $101 billion consumers spent on apps worldwide through paid downloads, in-app purchases and in-app subscriptions last year, the report said. Most of those purchases were made in mobile gaming, it added.
China’s smartphone market is unique because its development varies from one city to another, Jaede Tan, a regional director at App Annie, told CNBC.
He explained that the smartphone market is very mature in places like Shanghai and Beijing — users download fewer apps but they tend to spend more time on them and make more in-app purchases.
“But you also have this big long tail of tier 3, tier 4 cities where, actually, people have never even had a smartphone. They’re still getting a smartphone for the first time,” Tan said, adding, “If you combine those two things together, that’s why China’s such an engine of growth.”
Among the top 300 tech companies worldwide, Chinese firms won 32 percent of consumer spending, bringing in about $19.6 billion in revenues. For comparison, top American firms generated about 22 percent of that pool.
Tencent, which owns WeChat and is a major video game company, was one of the top five parent companies for global consumer spending in 2018. The other four names were also all gaming firms.
Asia, as a whole, is set to play a “big part” in the next phase of mobile growth, according to Tan.
He explained that many people in countries such as India and Indonesia are just getting connected to the internet for the first time — mostly through smartphones — but they are not yet spending on app stores in the same way Chinese users are.
For that to happen, there needs to be a catalyst, according to Tan.
“In China, that catalyst for spending on the phone came from WeChat Pay,” he said, adding that the first mobile purchase is always the hardest. “After that, it’s a snow ball effect.”