Digital transformation is expected to have the single biggest impact on Malaysia’s economy in the near future, contributing at least 20% to the country’s GDP by 2020. But what does this mean for Malaysia’s telecom industry – and its consumers?
Thanks to the government’s sustained investment in telecommunications infrastructure over the last 20 years, Malaysians are now more connected than ever – through social media networks, mobile and other digital services – with broadband penetration approaching 90%, according to the Malaysian Communications and Multimedia Commission (MCMC). The telecommunications industry has been the biggest beneficiary of this investment. Today, Axiata Group, Malaysia’s largest telecommunications company, has over 350 million subscribers across multiple Asian countries.
On the other hand, growth in connectivity has also spurred an increase in cyber attacks. While Malaysia ranks 3rd in the 2017 Global Cybersecurity Index (GCI), a Microsoftsurvey estimates that economic costs to the Malaysian economy due to cyber attacks can reach as high as US$12.2 billion.
A common target for cyber-criminals is the Domain Name System (DNS)– a first line of protection for a company’s network. Businesses that are targeted face the prospects of lost revenue as well as reputational damage due to breaches of customer trust. The consequences are perhaps most damaging for the telecom industry; EfficientIP’s 2018 DNS Threat Reportfound that the telecom industry had the most sensitive customer information stolen across all sectors from DNS attacks, with nearly a third of companies in Asia-Pacific becoming victims of data theft.
Following DNS attacks, Malaysian political party websites went down on the day of last year’s general election. In response, Malaysia’s National Cyber Security Agency (NACSA) issued an advisory to all government and private organizations that improving their network security is critically important in safeguarding the continued growth of the digital economy. At around the same time, the Malaysian Digital Economy Corporation partnered with the Axiata Group to develop greater capabilities for Malaysia’s cybersecurity industry.
While EfficientIP’s reportfound that the rate of DNS attacks is steadily on the rise, the news isn’t all bleak – many telecom companies already monitor and analyze DNS traffic in real time to detect data exfiltration attempts. Businesses can further improve their cybersecurity capabilities by adopting simple measures such as optimizing IT infrastructures with high-performance DNS servers and decentralizing the DNS architecture. These measures build resiliency to withstand attacks and more often than not, also improve the user experience.
At this critical juncture point in Malaysia’s development, the telecom industry has a critical role to play in ensuring the continuity and success of the nation’s digital transformation. The challenges being faced are high and the stakes are even higher – but such challenges can be overcome and safeguarded with a holistic approach to cybersecurity, starting with DNS.
The start of 2019 sees digital facing a bright future. Not only are consumers optimistic about smart technology — with 73% in China anticipating a positive impact — but the advertising industry is also flourishing. Digital spend in Asia Pacific hit $70 billion in 2018, and by 2022 that figure will reach $110 billion: over half of the total ad market.
So, what does this mean for 2019?
According to industry leaders, the popularity of automation will see programmatic become the norm, while mobile retains its advertising crown and TV becomes increasingly entwined with digital. At the same time, marketers will also start to realise that effectively mastering artificial intelligence (AI) takes more than simply tech know-how.
Let’s explore the key trends:
Rashmi Paul, Commercial Director, Asia Pacific at FreeWheel
“While the adoption of automation has been slower in South East Asia than in other regions, advertisers – in their quest for qualified and measurable audiences – are making it the driver of change in 2019 and beyond. We’ll see less media buying through a site-list or a programme-list only, but a deeper commitment to automated content, not just in standard display and video advertising, but in other areas such as outdoor media.
“With people in the region owning two to three mobiles each on average, the mobile app market will continue to grow in 2019, thanks in part to the popularity of gaming and social media. But we will also see an increase in the OTT market, which hasn’t taken off in APAC up until now – both in app, and through the TV. This will be helped by improving internet strength, making it easier to watch content on the move.”
“One of the best things about pioneers is that they blaze a trail for others to follow. China, for example, has so far led the mobile market: aggressively investing in m-commerce apps and testing new features. It is also thebiggest driver of global digital advertising spend in Asia Pacific. But due to the groundwork put in by China, there is now a booming mobile economy and programmatic advertising scene for its neighbours to leverage.
“In 2019, we can expect an influx of new players in automated mobile advertising and app development. And these market entrants will have many advantages. In addition to gaining insight from this mobile advertising evolution – such as the formats that drive high engagement, like interactive ads, and those that inspire use of blockers, like interstitials, they will have an understanding of what works well in their region. This might include offering lower app prices in particular areas and the option to pay via carrier billing. The time is coming for new innovators who have watched mobile advances from the sidelines to put their knowledge into action.”
Satoru Yamauchi, Director of Partner Services, OpenX
“Video already dominates Japan’s digital advertising landscape, with spend set to top $200 million this year. Moving into the new year, video will command even more advertising dollars especially on mobile, where consumers are increasingly spending more of their time. The number of smartphone video viewers will grow to nearly 40 million in 2019 and advertisers looking to reach these audiences will need to build campaigns with a mobile specific user experience in mind. Formats that interrupt user activity or delay content access are likely to irritate consumers and fuel negative brand associations. This is especially true in the mobile context, where large ads block content on small screens, slow down load times and eat into data allowances. To ensure a positive user experience, advertisers should harness engaging ads that give consumers a choice about how much they wish to interact with brands, such as opt-in video, which provides a genuine value exchange between advertisers and consumers.”
“With a growing emphasis on connected devices, and the subsequent explosion of data, in 2019, there will be even more demand on companies to manage an increasing amount of insights. While in 2018, businesses were keen to harness artificial intelligence (AI) and machine learning, they didn’t necessarily fully understand it enough to utilise it to its full potential. In 2019 we will see a greater focus on the quality of datasets behind the algorithms – which fuel tools such as these – and businesses will look to build a strong data foundation before jumping on the latest tech bandwagon. We think a mantra of ‘go boldly, tread lightly’ will be particularly relevant to many companies. They will need to put in place the tools to effectively collate, manage, and enrich data insights – and be able to connect disparate data silos, such as ecommerce, call centre, and legacy back-end systems to create a 360-degree view of each customer.
“In addition to this, we will see changes to roles within the workforce to better understand technologies such as AI and to cope with the increased focus on data as the basis for business decisions. Already, the World Economic Forum suggests the leading job roles over the next five years will include data analysts and scientists and there will be a focus on training new talent. There is evidence of this taking force with Asia’s investment in education and the digital economy, which will ensure employees are better equipped to manage emerging technologies like AI.”
With industry innovators poised to drive market diversity, efficiency, and expansion across Asia Pacific, the outlook for 2019 looks promising. Existing forces such as mobile and video will gain greater strength, and emerging developments in connected TV will bridge the gap between online and offline. As long as quality remains the foundation of progress — covering user experience and data — digital advertising will continue to offer equal value for all.
Leading app platform Smaato recently announced results from its Global Trends in Mobile Advertising H2 2018 report. The report reveals significant growth across key advertising metrics, including ad request volume and eCPMs.
As advertisers direct more money into mobile advertising and consumers continue to adopt smartphones around the world, demand and supply both increased year-over-year, indicating a healthy mobile ad market.
The highest growth region across all metrics was APAC. India stood out from the pack with a 425% growth in mobile ad requests. This was more than twice the growth rate of the fastest growing markets in EMEA and the Americas, which were led by Spain at 152% and the USA at 170% respectively. India’s meteoric ad request growth is characteristic of an emerging mobile market in which the number of mobile device owners, their time spent on mobile, and overall app downloads all rise quickly.
Ad Request Growth on the Smaato Platform
APAC – 44% Growth
EMEA – 23% Growth
Americas – 23% Growth
India – 425%
Spain – 152%
USA – 170%
South Korea – 177%
Netherlands – 87%
Colombia – 150%
Thailand – 77%
France – 82%
Argentina – 141%
Japan – 53%
UK – 70%
Mexico – 83%
Vietnam – 50%
Italy – 61%
Brazil – 54%
Asia Pacific also saw significant eCPM growth in addition to ad request growth. The top five countries in the region in terms of eCPM growth were:
Japan – 125%
Australia – 111%
Hong Kong – 99%
Indonesia – 96%
Alex Khan, Managing Director, APAC at Smaato explains, “The impressive ad request and eCPM growth in APAC are driven by app developers finding new ways to better monetize their content even as consumers are spending more time on apps. Advertisers from all verticals are realizing that apps are where consumers are — and they are directing more funds into this channel.”
He adds, “With app usage increasing across the region, there will also be more monetization opportunities for mobile publishers.”
In 2017, China became Singapore’s top market for both tourism receipts and visitor arrivals, contributing 3.2 million tourists. As one in a series of parallel moves seen worldwide, mobile payment provider Alipay also launched it’s payment platform to allow Chinese tourists to pay in the way they know best.
Alipay is China’s largest mobile and online payment platform, with over 520 million active users. Alipay has evolved from a digital wallet to a lifestyle enabler where users can hail a taxi, book a hotel, buy movie tickets, pay utility bills, make appointments with doctors, or purchase wealth management products directly from within the app.
Nielsen Outbound Chinese Tourism and Consumption Trends
China is just back from the two-month-long 2018 summer holiday, during which millions of Chinese travelled abroad for pleasure. With Alipay’s growing presence outside of the Chinese mainland, Alipay overseas spending skyrocketed, with the platform processing 2.6 times as many in-store overseas transactions this summer as compared to 2017.
Asia continued to dominate the list of Top 10 countries and regions in terms of summertime overseas Alipay transactions. Hong Kong topped the list, followed by Thailand and South Korea.
In Singapore, the average spending per Alipay user was 1759.13 RMB (approx. 352.35 SGD) in the summer of 2018. This was a 32% average increase in spending per Alipay user and a 320% total increase in spending for the same period in 2017. The number of Alipay transactions in Russia also increased by over 5000%, as Chinese travellers flocked there in July for the FIFA World Cup.
Of the 80+ airports that support instant tax refunds via Alipay, airports in South Korea recorded the highest amount of tax refunded, followed by airports in Europe.
Mobile growth continues to hit record highs in 2018, built on a foundation of programmatic delivery. And that makes it more important than ever to get mobile innovation right, says Itamar Benedy, CEO, Glispa. In this Q&A with Digital in Asia, he talks about GDPR, Mobile Network Operators (MNOs), playables and performance marketing on mobile.
How important are Mobile Network Operators and their data in the mobile first era?
Mobile Network Operators (MNOs) are the sleeping giants of ad tech, but as proven by the recent AT&T AppNexus deal, these titans are waking from their slumber. MNOs will be incredibly powerful in the mobile advertising industry due largely to the vast scale of user data they hold which, if utilised correctly, places them in an extremely strong position to challenge the Facebook and Google duopoly.
What puts MNOs at an advantage is the opportunity for value-added services, delivering engaging content to users and creating additional revenue. They provide an exciting alternative to the limited in-app inventory currently available for mobile advertising. The most important part of mobile advertising is having a direct line of communication with the audience, and MNOs can provide the channels necessary to interact with users through multiple touch points, consequently maximising their potential.
To date, MNOs have done little to harness the power of the data they hold, but we expect to see others follow AT&T’s lead through commercial acquisitions. Hong Kong conglomerate CK Hutchison is one company that has noticed the potential of MNOs and, despite the European competition commissioner blocking its acquisition of the UK’s O2 network, it recently bought a 50% stake in Italy’s Wind Tre in a $2.45bn deal.
How is GDPR impacting Glispa and the wider industry around data?
In spite of the confusion that still surrounds the GDPR, its introduction is largely positive. GDPR is forcing the industry to be transparent and deal with data responsibly, and will ultimately minimise the number of unethical vendors. This will enhance the user experience and pave the way for more open and honest relationships between brands and consumers.
GDPR has also compelled advertisers to think more creatively about campaigns to encourage users to opt-in. We’ve seen an increase in the creation of playable ads because they include an opt-in element that incentivises users to consent to data collection so they can play the game, without forcing them to do so.
As a German-founded company, Glispa has followed strict data usage regulations from the outset, so the introduction of GDPR is having minimal impact on our business operations. We view the GDPR regulations as an exciting means of expanding our creative potential by finding new, fun ways of encouraging user opt-in.
Tell us about playables – how do they work, what are advertisers doing with them?
Playables are entertaining and rewarding mini games that provide a more meaningful and interactive experience than traditional ads. They are most commonly used in the gaming sector where the concept is much the same as test driving a car; allowing the consumer to ‘try before they buy.’ Playables are highly successful in this sector as users who go on to install the full app already know what the game is like and are highly likely to play it regularly.
But playables aren’t just limited to the gaming sector, any brand can create a fun and interactive game ad that will entertain and engage its target audience. Giving users the ability to interact with content leads to better brand recall and enjoyment, thus reaping positive conversion rates and ROI. Interactive ad formats also have map tracking so even if a user does not take the required action, advertisers can see where interactions are happening and derive insights to improve future consumer communications.
Playables are the most effective way to increase creativity within mobile advertising and, as demonstrated in a study by AdColony, are consistently voted as a favourite ad unit, but so far adoption remains relatively slow.
Why are more advertisers not using the playables format?
There are a number of explanations for the slow adoption of playables, all of which will be made redundant in the future. Firstly, brands outside the gaming market don’t always understand the relevance of playables, after all, why make a mini-game when they don’t have a full game to sell? But it is becoming increasingly clear this is an outdated viewpoint and many non-gaming brands, such as Burger King, are making good use of playable ads to boost user engagement.
Complexity is another hindrance to playable adoption. As a new format, there are no proven templates advertisers can use to design and build ads, making playables time consuming and expensive to create. With limited playable case studies in most verticals, advertisers are understandably reluctant to take the risk of investing in the format but this will change as a defined playbook emerges and the complexity and cost of production decreases.
What are your thoughts on the Facebook and Google duopoly?
A noticeable theme of Cannes Lions this year was that companies are ready and willing to challenge the duopoly. The AT&T Appnexus deal and OATH’s acquisition of Yahoo demonstrate the huge leaps telcos are taking and how they are gearing up for battle. These telcos now have the data, user-base and scale, as well as the funds to really pose a threat. Moreover, with Facebook’s well-publicised lack of transparency, it may not take much for companies to start asserting their dominance over the giant.
How do you see the evolution of performance marketing and the role of mobile as a channel?
Performance marketing has evolved from its affiliate roots to play an ever-increasing role in marketing strategies. The main reason for the growth of performance marketing is its unique measurability, which is vital at a time when the pressure on marketers to justify digital spend is increasing and transparency is highly valued.
Mobile is a particular driver of performance marketing. Consumers spend huge amounts of time on mobile devices and we see exceptionally high levels of engagement but mobile advertising is difficult to measure so marketers are turning to performance marketing, which can achieve specific KPIs such as app downloads and re-engagement.
As it becomes a more trusted and widely used tactic, performance marketing is moving beyond traditional monetisation metrics such as clicks and downloads toward more meaningful goals such as user engagement and lifetime value. In fact, performance marketing is proving so effective at driving these outcomes, marketers are beginning to take best practices from this technique to use in brand campaigns.
In 2018, China is an almost entirely cashless consumer economy, where popular mobile payment apps such as WeChat Pay and Alipay have enabled consumers to go straight from cash, to smartphone payments, leapfrogging the use of credit cards and cheques.
One of the world’s leading players in mobile or e-payment, China saw $15.4 trillion worth of mobile payments handled by third-party platforms in 2017 – more than 40 times the amount processed in the US.
Chinese consumers can buy a pancake at a roadside breakfast stall, order food online, pay credit card bills, or manage stock accounts, all with just their smartphone. In fact, mobile payments are so prevalent that use of cash fell from 63% of transactions in 2011 to just 33% by 2016.
When Alibaba founder Jack Ma carved out his payments business from the ecommerce giant in 2010, he pulled off a coup with multibillion dollar implications. But it was a move by WeChat a few years later that really set the category alight.
The sending and receiving of red packets containing cash (also called lai see in Cantonese, and hongbao in Mandarin) at Lunar New Year is an important tradition across China. But historically red packets were always tangible items, real cash in a paper envelope. Then, in 2014, WeChat introduced digital red packets. The ability to send festive cash to family and friends using just the WeChat Pay mobile payment platform. It was a revolution, and 4 years later in 2018, the idea of digital red packets had caught on to such an extent, that 80% of Chinese consumers sent a red packet via WeChat. This year only 69% sent a physical red packet.
WeChat’s success with digital red packets introduced and popularised the mobile payments category with Chinese consumers, and built a platform for the adoption of wider mobile payments functionality across money transfer, taxi ordering, online shopping, bill settlement, wealth management, for both WeChat – and it’s competitors.
Alipay and WeChat Pay have also made their presence felt abroad. Both companies extended their payments services to hundreds of thousands of merchants in regions like Southeast Asia and Europe, targeting outbound Chinese travellers and encouraging them to settle their overseas shopping bills with the apps. Adoption is still low, but merchants are keen to facilitate easier transactions for high volume and wealthy Chinese tourists.
Within China however, the game is up. The dominance of mobile payment means not only that companies like Alibaba and Tencent manage consumer financial transactions, but as a by product they also control huge lakes of valuable personal data. Already this data is being used to close the loop on the consumer purchase cycle, and up-sell other financial products such as loans, or retail experiences. Alipay has also built Sesame Credit, a personal credit rating platform and Chinese government social rating system, linked to it’s mobile payments footprint. While English language media tends to describe Sesame Credit as an authoritarian system straight out of Black Mirror, Chinese social media users seem to focus more on the advantages than the burdens.
Ay, there’s the rub! As the West agonises over Cambridge Analytica and GDPR, WeChat and Alipay have already built the future of mobile payments. Convenience trumps all, if you let it.
Below we’ve collected key takeaway resources covering WeChat, Alipay and the mobile payments ecosystem in China.
Mobile Payment Usage in China 2017
Tencent: The Growth of the Digital Payment Ecosystem in China
Social Networks & Digital Payment in China
Alipay and WeChat Pay: Reaching Rural Users in China
Digital transformation in China – Take aways from the Alibaba Global Dreamer Program
While the 2014 World Cup in Brazil was marked by social media, the upcoming tournament in Russia is set to be the World Cup of Mobile. Internet penetration has grown from 42% to 55% since the last tournament, and mobile now makes up 73% of total internet consumption.
Tentpole sporting events are particularly suited to mobile app targeting, as sports fans are typically never far from their mobile devices, and a large portion of content related to the tournament will be consumed on a mobile device.
Live streaming has grown massively over recent years, to the extent that the 2018 Winter Olympics was live streamed by twice the people compared to 2014. In addition, 30% of fans stream sporting events on their mobile devices because it allows them to watch games and events “on their own terms”. Second screening in live sports is also huge – 80% of viewers use their mobile devices to search for player stats and to replay videos of key plays.
Beyond live streaming, several other mobile app categories see uplifts during major sporting events:
Sport – fans use mobile sports apps to find out more about their favourite teams and players throughout the tournament, both during and between games
AppsFlyer has just released it’s “State of App Marketing in India” report, offering insights into India’s mobile marketing landscape, the latest trends and how to navigate India’s mobile ecosystem.
India is the world’s fastest growing mobile market, faster than even China, with the country now accounting for 10 percent of global smartphone shipments, according to IDC. Indian consumers have a relatively high in-app buying rate compared to the global average, especially in shopping apps.
The report looked at three broad categories of shopping, travel and entertainment apps, and also revealed other key findings:
India ranks sixth globally in terms of number of minutes spent on apps per day.
There was a 200% increase in the average number of installs per app when comparing January 2017 to January 2018
India suffers from a high uninstall rate due to limited storage space in the Android dominated market. Close to one third (32 percent) of installed apps are deleted within 30 days. Retention is also a challenge with only about 5% of users active 30 days after installing an app.
India is increasingly attractive to non-Indian apps, especially Chinese ones. More Chinese apps are now in the top 200 compared to Indian apps. The share of non-Indian apps in the categories of shopping and travel grew by 84 percent and 45 percent respectively. In contrast, the share of Indian-based apps has risen year on year in the entertainment category.
The State of App Marketing in India report analyzed data from different time frames throughout 2017, with a sample of 1 billion plus app installs, 4 billion app opens, and $400 million generated from in-app revenue.
Myanmar is going through a digital transformation. AdsMy, a local marketing tech platform, have produced a trends deck covering digital marketing and consumer behaviour for Myanmar in 2018. Programmatic, mobile, video, native and digital advertising are all highlighted as growth areas.
2018 marks the 10 year anniversary for both the Apple App Store and Android market. In the short time since the first wave of apps were published in 2008, they have impacted the lives of people all over the world on an unprecedented level. There are now apps for almost anything and everything – hugely successful apps that incorporate AR and VR, apps dedicated to events, and even an app just for popping bubble wrap.
Who could ever have imagined that apps would evolve from the simple Snake game on the Nokia phone (yes that was an app), to driving a $6.3 trillion industry in 2021?
Looking back over 2017, the app economy has hit some significant milestones:
By the end of October 2017, the iOS App Store and Google Play had more than 2 million and more than 3.5 million apps available, respectively.
New apps continue to be introduced at a strong pace. During the month ending October 31, 2017, roughly 50,000 new apps launched on the iOS App Store and over 150,000 were added to Google Play.
Across mature markets, users have up to 90 or 100 apps installed on their devices, 30 of which they use on a monthly basis. On average, people are spending two hours per day — which equates to one month out of every year — in apps.
More than 40 countries will generate over $100 million in consumer spend in 2017 for iOS App Store and Google Play combined.
Apps play a key role in almost every industry today, including retail, banking, travel, QSR, CPG and media & entertainment .
It is apparent that the evolution of mobile apps have transformed the everyday lives of people, and users continuously expect their favourite apps to be improved. There are several aspects of an app which users expect to be improved, but convenience is a core theme that underlies many of our predictions as we look to 2018.
1. Worldwide Gross Consumer App Store Spend Blows Past the $100 Billion Mark
The continued evolution of markets across the globe has led app monetization to continuously grow at an outstanding rate. Apart from games, which traditionally account for the majority of overall spend, we foresee spending in e-commerce apps such as Alibaba and Amazon to drive worldwide consumer spend – which is expected to grow about 30% year on year to exceed $110 billion in 2018. In APAC, consumer spend on apps hit $17.1 billion in H1 2017 alone.
2. App Store Curation Drives Higher Overall IAP Revenue and Expands Opportunity for Independent Publishers
In June 2017, both Apple and Google announced updates to the iOS App Store and Google Play aimed to alleviate this issue through app curation and editorial content. We predict that these updates will have a significant impact on apps in 2018, in particular apps that help people occupy their leisure time. These types of apps, which tend to be entertainment-centric, are most likely to connect with consumers when they are casually browsing through the app stores. Conversely, “needs-based” apps such as UberEats or DBS PayLah! are far more likely to be downloaded based on word of mouth recommendations or focused searches when a user encounters a particular need.
3. Broader Adoption of AR Apps
Pokémon GO and Snapchat sparked huge interest in augmented reality (AR) among the masses, and we foresee that AR will take another significant step forward towards realizing its massive potential in 2018.
Facebook, Google and Apple have taken the lead at their developer conferences in 2017, and together with the Chinese powerhouses Alibaba , Baidu and Tencent , have set the foundation for AR-related initiatives. These initiatives will accelerate the space by making it easier and faster for publishers to develop AR apps, while also stoking consumer interest. For example, in Japan, starting in May 2017, there has been a significant increase in iPhone app downloads for the top ranking apps by “Augmented Reality” app store search in Japan, and other APAC countries.
4. Fragmentation of the Video Streaming Space Accelerates
It is now not an uncommon sight to see people catching up on their favourite Netflix series or Hollywood movies while on the move. 2017 has been another extraordinary year for video streaming services and total time spent in Video and Entertainment apps tripled to almost 40 billion hours in APAC alone.
Between H1 2015 and H1 2017, time spent in the Video Players and Entertainment categories on Android phones in APAC has tripled to reach close to 40 billion hours – almost half of the worldwide total.
Year to date through October 31, 2017, these apps have driven significant growth of worldwide consumer spend for the Entertainment category on both iOS and Google Play. However, as some of the biggest names in the entertainment industry and app economy — including Netflix , Apple , Google , Facebook , Snap and Disney — have announced huge plans to expand their footprints in variety of ways, we expect that 2018 to mark the beginning of an inflection point for this space, in terms of fragmentation. In fact, our research shows that Android users in South Korea who use video streaming apps are significantly more likely than average to be accessing other video and related entertainment services.
Overall, this space will continue to see steady growth in terms of revenue and engagement, but in the years that follow, consumers may start to rationalize how they spend their time and money among a dizzying array of choices, resulting in some players succumbing to profit pressures as they get crowded out of this competitive space.
5. Mobile Pushes Towards the Center of the Retail Customer Journey
Analysts and experts have pronounced the retail apocalypse in recent times, and we see apps as a way to reinvigorate consumers’ retail experience. Brick-and-mortar retailers have already embraced apps and shoppers are now very engaged; results are telling from the Great Singapore Sale 2017 , which saw an increase in sales thanks to the GoSpree app. In Indonesia, which has a population of 261 million and a burgeoning middle class, users spend an average of just over 90 minutes per month in Shopping apps, placing it at #2 after South Korea. On 11 November 2017, dubbed Single’s Day, Alibaba generated a record breaking $25.3 billion in sales, with mobile users accounting for 90% of sales. These numbers are only the beginning of what is a rapidly evolving retail experience for consumers.
Come 2018, apps will continue to cause consumers to change their shopping habits which will in turn redefine the relationship between and even the very nature of existing retail channels (e.g., mobile app, web, brick-and-mortar). China, for instance, is one huge influencer in this area. We are seeing people in western markets increasingly use physical stores as a place to pick up items purchased on mobile. In addition, cash registers’ longstanding role in the checkout and payment process will become reduced, or in some cases replaced, by mobile. For many consumers, mobile will be a core part of the shopping experience regardless of channel.
6. Restaurant Aggregators Drive Mobile Conversion as Delivery-as-a-Service Further Penetrates Premium Markets
As we predicted last year, there was some consolidation in the food delivery space. Looking ahead to next year, we expect that aggregators such as Korea’s Yogiyo will continue to expand the addressable market for this space by opening up under penetrated markets as well as converting users who do not currently use mobile apps from intermediaries to order meals. Meanwhile, delivery as a service (DaaS) providers (e.g., UberEATS , Deliveroo) will gain market share in premium markets where customers are more likely to pay more for higher-end restaurants that don’t have their own delivery fleets. Furthermore, we expect more quick-service restaurants (QSR) to respond to the increased competition from food delivery by partnering with DaaS apps, similar to McDonald’s growing partnership with UberEATS . As with video streaming, this space will face consolidation in later years as it needs to rationalize the fragmentation felt by customers and the profit pressures felt by service providers competing in a crowded space.
7. Finance-Related Apps Poised for Most Significant Transformation in 2018
In 2017 in Asia-Pacific specifically, the growth of downloads in the Finance category outpaced all app categories (non-games) combined, with China leading the way. Person-to-person (P2P) payment apps, like WeChat, AliPay, GoPay, Grab Pay and PayTM have been some of the shining stars in the fintech app revolution. They have transformed how consumers, particularly millennials, exchange money, by displacing the use of cash and checks. In the next year, we expect these services to capitalize on their popularity and broaden their range of services in an effort to expand their revenue potential, fend off increased competition from traditional banks and deepen user engagement. With retailers adopting such apps as an option for customers, we expect P2P payment apps to see increased transaction volume. These initiatives have been well received by users, as they will provide even greater levels of convenience. In addition, this space will see increased activity from successful players in other categories, like messaging and social networking, who are constantly looking for additional ways to serve, monetize and engage their large user bases.
These are just a handful of areas where we expect the app economy to evolve over the near future. Despite how far this space has advanced over its first decade, it is just scratching the surface of its full potential. Users increasingly expect apps to completely transform the very nature of how they accomplish goals and tasks, as well as create brand new experiences not possible on other platforms. We are excited to see how app developers change the world by delivering on these needs over the app economy’s second decade.