Indian Economy News

Number of mobile app companies doubled to 444 in 2014 from 240 in 2013

Bengaluru: Rahul Chandra is managing director of Helion Ventures, the venture capital firm that's perhaps the most bullish on mobile-first companies in India today - a partner once commented that he would not consider any startup that did not have a mobile app. However, Chandra himself has only 18 apps on his phone.

"It is prime real estate," the investor who has backed companies like MakeMyTrip, TaxiForSure and Ezetap said about the space on this phone. "The people who have been incentivised with discounts may install something, but keep it for as little as a few hours."

An increasing number of companies are bringing out apps, if not shifting to app-only mode, to reach out to more customers, including those on the move. A mobile application is recognised for its high potential of boosting user engagement and sales conversion.

India is emerging as a mobile-first country with one of the fastest-growing smartphone penetration rates in the world expected to reach 213 million next month, according to the Internet & Mobile Association of India.

The number of mobile-app companies founded in India almost doubled to 444 in 2014 from 240 in 2013, according to data from startup industry tracker Tracxn!.Businesses ranging from ecommerce giant Flipkart to food tech company Faaso's are investing heavily in mobile strategy. Fashion portal Myntra shut down its website last week to go app-only.

However, the average Indian stores no more than two pages of applications on a smartphone and is unlikely to have more than one app for each category -food, ecommerce or payments. The question is: Which apps will make a successful "land grab" for precious app space? "There will be three main categories the essentials such as entertainment; the criticals such as health and travel, and the discretionary such as ecommerce and local commerce," said Chandra, adding that each user would probably not have more than three applications in each category.

In this competitive landscape, relevance is key. "If a product has utility for the consumer to open it at least once or twice a week, they will keep it," said Sameer Grover, founder and CEO of one-year-old offline marketplace platform CrownIT. Neeraj Jain, cofounder of Tiger Global-backed Zopper, said the uniqueness of the product also plays a big role. Zopper is an app that helps consumers discovers offline products in their neighbourhood.

"The one who gives the best service is the one users will hang on to. And if it's a very frequent-use case and one app is not helping my immediate needs, I'll probably switch to a number two app, number three at tops," said Varun Bhalla, an investment associate at Khosla Impact, which has invested in mobile companies such as Logistimo, a company that specialises in mobile supply chain technology. More nuanced aspects such as data usage, memory and cost also matter to the value-conscious Indian user.

"In emerging markets, including a smaller package size and a 'freemium model' would reduce the barrier for new users to get started," said Junde Yu, VP Asia-Pacific of San Francisco-based app analytics company App Annie.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Partners
Loading...