A long way for ‘desi’ dream: Inside story of Indian app store and fight against Google

The government may have provided tacit support to Indian players like Paytm to create an India app store to challenge the monopoly of the likes of Google, but analysts tracking the sector maintain that such support is unlikely to be of much help to local players.

There are two reasons for this – one, players like Google and Apple have their own operating system which makes their app stores attractive to consumers and thus helps them create scales. The local players will always be handicapped in fighting global tech majors on this front in the absence of an operating system.

Second, the operating systems help them to build a range of products and services that acquire leadership position in their respective segments. For example, as per industry analysts, Google is not only big in the app market, it is a big player in the payments business also with its Google Pay.

The issue of creating a desi app store started earlier this month when Google announced it would charge 30% commission on in-app purchases for exchange of digital goods using its app store.

Though Google has for the time being suspended this practice, a consortium of Indian app creators decided to challenge Google’s monopoly. Paytm went ahead with creating its mini app store and convinced around 300 creators to list their apps on it. It even provided a demo of its app store on October 8. However, its success depends on its ability to wean off users from Google’s Play, and here the government can do little.

In India, Google Play has around 94% market share and accounts for 360 million unique visitors, according to Comscore data released in August.

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 modestly successful but still nowhere near Google or Apple.

The company claims to have 400,000 apps and 56 million monthly active users. Analysts say this could be due to the company running its operating system for mobile phones and its partnership with Samsung to populate Samsung’s Galaxy Store. Still, with around 100 million users, it only forms a fraction of Android’s 2.5 billion or Apple’s 1.4 billion global active user base.

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