India's app store downloads to reach 7.7 billion in 2016

According to IAMAI-IMRB report the digital advertising market is projected to grow at a CAGR OF 35 per cent. The growth of market share for smartphones and the app market could further help in the growth of the digital ad market

e4m by Ronald Menezes
Updated: Jul 11, 2016 8:11 AM
India's app store downloads to reach 7.7 billion in 2016

According to a recent IAMAI-IMRB report, the country’s digital advertising market is projected to grow at a CAGR of 35 percent to reach Rs 7,044 crore by the end of this year. Higher internet speeds available to the consumers coupled with an increase in mobile advertisements could boost the online ad market’s growth.

Indian users are increasingly getting hooked on to smartphones as the trend moves on to Tier-2 and Tier-3 cities. According to a report by CMR, smartphones are grabbing the Indian market by storm. High-end smartphones, especially, are pegged to capture almost 19 percent of the total smartphone market share.

With the continuous rise of smartphone users, advertisers feel the immediate urge to make these users their target audience. The constant use of smartphones, always staying connected with the internet and easy mobility, helps the cause in making smartphones one of the fastest means of digital advertising.

According to report by App Annie, India’s app store downloads will grow by 92 per cent to reach 7.7 billion in 2016 and will reach 20.1 billion by 2020. In-app advertising could see a major boon through such phenomenal numbers.

It is also seen that the total time spent in apps on Android phones has increased 2.5 times in Q1 2016 than what it was in Q1 2014. The remarkable growth of both downloads and app usage cements India as a critical market for app publishers with unrivalled potential.

Retail apps could see a rise in in-app advertising as consumers increasingly use their smartphones to shop. Q1 2014 to Q1 2016 was a period of high growth for retail apps in India, with many enjoying significant growth in active users, while time per user and downloads grew over 10x for India’s top 10 retail apps.

While hyper-local market places are being adopted by most businesses in India competition from abroad is intensifying. Amazon overtook Flipkart to become the top retail app by downloads in India in Q1 2016, and Wish also made its first appearance in the top 10 that quarter. This gives mobile advertisers further options with various Indian as well as oversees players entering the market.

According to a survey by Statista, the revenue in the digital advertising market in India amounts to USD $1491.7 million as of 2016. ‘Search advertising’ currently occupies the largest market share with USD $737.6 million as of 2016 which usually helps browsers on desktops.

Out of the total revenue that is expected to be generated in the digital advertising segment around USD $2040.3 would be contributed through mobile in 2021 while in 2016 it contributes to USD $395 million. The retail industry accounts for the largest revenue share of 4.26 percent of display advertising revenues in 2016.     

The growing smartphone and app market will cater best to in-app advertisers who are looking to aim at smartphone users and are connected to the internet on the go. It is expected to further help in the growth of the online ad market in the years to come.

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