PayTM has a long way to go before weaning users off Google’s platform

PayTM may be moving ahead quickly to create a mini-app store — it plans to showcase a demo on October 8 — but data indicates that it will take more than just an Indian platform to upend Google’s market.

After Google’s announcement last week that it will charge 30% commission on in-app purchases for exchange of digital goods using its app store, a consortium of Indian app creators decided to challenge Google’s monopoly. PayTM has since been able to convince 300 creators to list their apps. However, its success depends on how easily it will be able to wean users off Google’s Play Store.

China certainly has lessons for Indian app makers. As per Newzoo data, Google only accounted for 3.6% share in the market in July 2017. But the success of Chinese app stores is owed to the dominance of native apps and local language content.

In India, however, where Google Play Store cordons off 94% of the market and accounted for 360 million unique visitors in August, as per Comscore, entry of a new app store may not be that easy.

Data from 42matters on app availability and developer preference for Google and Apple’s platforms shows that even big names like Amazon and Tencent haven’t been able to put up a competition. Google has 3.4 million apps on its Play Store, whereas Apple has 1.7 million apps. They also have 0.8 million and 1.3 million developers, respectively. In contrast, Amazon has only a sixth of apps and developers. Tencent has an even lower share, with 82,798 apps and 52,158 developers.

India’s native app store, Indus App Bazaar, which also offers translation services to apps in 12 Indian languages, has been able to show some success — the company claims to have 400,000 apps and 56 million monthly active users. But this may also be due to the company running its operating system for mobile phones and its partnership with Samsung to populate its Galaxy Store. Even with 100 million users, it only forms a fraction of Android’s 2.5 billion or Apple’s 1.4 billion global active user base.

Rakesh Deshmukh, co-founder and CEO of Indus OS which runs Indus App Bazaar, said creating an app store of Google’s size is a humongous challenge. “We have been here for seven years. In the first year of our app store, we had 300 apps. You are working in a space which has been captured by someone else and has a decade of experience,” he said.

It was not easy to get developers on Indus as they are used to the Google experience, he said. “For instance, on the developer portal, where they come, sign up and publish apps, developers compare how Play Store is different than Indus,” Deshmukh said. Citing another example, he said Indus offers search functionality, which took two-and-a-half years to build and bring it on a par with Play Store.

A key factor is that stakeholders like users, OEMs, developers, and government have to come together to create such a store. Besides, apps also have to be available in regional languages, as only 10% of population can speak English. And most critical is the discovery of local apps.

Gartner’s senior research director Manjunath Bhat said other app stores cannot match up with Play Store as they lack “network effects”. “Play Store is mandatory to make use of Google Mobile Services that includes other apps like Maps. Any Android-based OEM device comes pre-bundled with Play Store which provides users with a secure, reliable and familiar access path to download apps. An app store is fundamentally a market place — and a market place thrives as a result of both producers and consumers actively contributing to the growth of the market.”

Moreover, restrictions placed by Google also hinder listing of third-party app stores on its Play Store. Neither the Amazon app store nor Samsung’s Galaxy Store are listed on Play Store. Besides, concerns over the safety of consumer data deters people from using such services.

As a result, unless PayTM or any other native app store can onboard enough users, it is unlikely that the market will shift away from Google or iOS. India will need more local content and many more apps for a native app store to be successful.