Walmart-backed PhonePe will launch its Android app store this week with a $0 in-app purchase fee for developers. In 2021, PhonePe bought Indus OS, which powers the app marketplace.
This article will examine why developers want an alternative shop and its business potential.
Developers’ Google dispute
Google temporarily removed Paytm’s Play Store app in September 2020 due to rule violations. The Play Store-listed fantasy sports app Paytm First is available at the moment. Paytm’s primary app advertised this business, violating Google’s Indian sports betting app regulation.
Later that month, many Indian entrepreneurs formed a coalition to investigate an alternative app marketplace. Vijay Shekhar Sharma of Paytm, Deep Kalra of MakeMyTrip, and PolicyBazaar, RazorPay, and ShareChat executives were there.
Other company leaders have complained about Play Marketplace’s 30% charge and called for a “Made in India” app marketplace.
Google reduced its fee from 30% to 15% for developers earning the first $1 million from the Play Store in 2021.
In 2022, the business launched a user-choice billing scheme for restricted applications that let them utilize different payment processors with a 4% Play Store commission reduction.
India’s anti-trust commission ordered Google to enable all applications to utilize user-choice billing systems and alternative payment processors in January 2023.
When Google stated it would enforce Play Store billing regulations last year, it said fewer than 60 Indian developers paid more than 15% of the costs. The firm claims the “lowest rates” for major app store commissions.
Around 30 app manufacturers wrote to Google this month requesting it not to delete their Play Store billing-violating applications. These businesses requested that Google wait until March 19 for the Supreme Court’s SLP hearing. Additionally, India’s highest court has declined to request that Google delist these applications.
Developers may utilize Google’s charging system or user-choice billing. Note that Google has set a March 13 deadline to incorporate user-choice charging APIs for various payment choices.
The numbers
Multiple analytics organizations indicate that India has the most downloads. The nation doesn’t consistently rank in the top 10 or 20 by spending.
Sensor Tower said that Indian Play Store app users spent $520 million on in-app purchases in 2023, up 25% from 2022. Gaming applications accounted for more than half of the expenditure, then social, entertainment, productivity, and dating. Indian consumers download 5x more applications than Americans but pay 25x less, according to the business.
Sensor Tower reports that the Play Store accounted for 74% of Indian in-app transactions in 2023, up from 56% in 2020. More than 90% of Indian smartphone users use Android.
Data.ai’s State of Mobile 2024 research found that Disney+, Hotstar, and ShareChat were India’s top-grossing applications on both the App Store and Play Store.
Chances and obstacles
App producers may distribute widely in India, where there are over 750 million smartphone users. During an interview last year, Indus OS CEO Rakesh Deshmukh stated the business has served over 200 million consumers and downloaded 2.5 billion applications over seven years.
PhonePe promises developers no commission and no listing charge for the first year. The company’s website offers advertisers “millions” of consumers. To expand, the Indus app shop must acquire consumers and cooperate with phone manufacturers.
Building viable alternative app shops is difficult. Paulo Trezentos, who founded Aptoide in 2009, told Eltrys that other app shops must provide value. For instance, Aptoide lets users install an older program that may work better on their smartphone.
The store gets 25% if an app utilizes Aptoide’s charging service and 10% if it refers customers to a website. Trezentos claimed roughly 7,000 of the store’s 100,000 applications utilize the startup’s billing services.
Aptoide served approximately 500 million downloads last year. Trezentos said the business reinvests profits to operate at “nearly breakeven” while partnering with OEMs and carriers.
Brazil, India, and Indonesia download the most Aptoide applications, Trezentos said. These nations are not developers’ primary income sources.
These nations offer developers huge scale. Developers must simplify payments and provide value for consumers in these areas, he added.
PhonePe has indicated it expects India to have over a billion smartphone users by 2026. Under its accelerator program, certain developers get exposure on the PhonePe marketplace.
Google and Apple insist on safe and private app delivery. Google warns phones against installing applications from other sources.
In India, the search giant has faced a huge number of fake lending applications. Google has improved how it handles these programs over the years, but many still slip unnoticed by its screening algorithms.
PhonePe needs strong security to stop harmful applications. It also needs predatory loan app removal methods. To retain people downloading applications from its store, the firm must persuade them that it is better than the Play Store.
