Why should you consider targeting Emerging Markets (EMs)?
As per the 2016 App Annie Forecast Report, emerging markets will account for 76% of the global mobile app store downloads and 45% of the global mobile app store revenue by 2020.
But which are these emerging markets? The largest emerging markets in terms of downloads and revenue growth are China, India, Brazil, Russia, Mexico, and Indonesia.
And India surged past the US to become the largest country by Google Play downloads in 2016. Despite hitting that remarkable milestone, the smartphone penetration in India is still at 30% leaving an enormous potential for growth.
Using Market Maturity Model to Understand Emerging Markets
The best way to grasp this potential is by studying App Annie’s Market Maturity Model.
Mature markets like the U.S. and U.K. are to the right of the gray vertical line. App downloads are leveling off as these markets reach smartphone saturation, but usage and revenue are continuing to rise.
In comparison, emerging markets are to the left of the line. As more users get online for the first time, downloads are skyrocketing.
50% of Google Play’s year-on-year download growth was driven by India, Brazil, Indonesia, and Mexico. It is only a matter of time before usage and revenue catch up—by 2020, 45% of global app revenue will come from emerging markets.
Leverage Low CPIs in Emerging Markets to Acquire App Users at Low Cost
Also, the Cost Per Install (CPI) is currently lowest in emerging markets. So, if developers can invest in user acquisition in emerging markets now, they can build their future audience at the lowest possible price.
If we look at the image below, the CPI is the highest for Japan and US at $2.81 and $2.49 respectively. Whereas, for emerging markets like China and India it is at $0.86 (1/3rd of US) and $0.38 (1/6th of US) respectively.
Why Can’t I Use My Current Marketing Strategy in Emerging Markets?
Your current app marketing strategy in developed countries will not work in emerging markets due to widespread differences between the two markets.
Firstly, in EMs Android is the dominant operating system with an average market share of nearly 90% due to the availability of low-cost affordable Android smartphones. iOS lags behind at a measly 3%.
Secondly, mobile data is still quite expensive in developing economies. The average cost of 500 MB of data ranges anywhere from 6 hours to 17 hours of work (2-6x) in emerging markets as compared to 3 hours in the United States.
In fact, users manually disconnect their devices from mobile data when away from WiFi and not in use. This also helps in saving battery life which is again a precious resource on low-cost phones.
Moreover, mobile data is slow and unreliable as the spread of 4G networks is not extensive. 60% of the total mobile connections worldwide are still 2G.
Lastly, a majority of the smartphones are low-cost with limited storage space available.
In fact, according to a Jana survey, 28% of the users in India complained that apps took too much space on their devices. Thus, app size plays a major role in deciding which app stays on the mobile phone.
How to Go About App Marketing in Emerging Markets?
Looking at the App Maturity Model above and the significant differences between Developed and Emerging markets, developers need to tweak their marketing strategy to be more relevant.
The following app marketing strategies taken by some of the most popular apps in the world can come in handy for emerging markets. (If you are looking for marketing strategies that target all markets check out this guide or this guide)
1. Shrink the App Size to Accommodate Low Storage
As indicated above, low-cost smartphones are quite popular in emerging markets. These are short on storage space and users delete apps that are large in size.
So, where the app size limit in developed economies is at 100 MB, the same limit for emerging markets should be set at 10 MB. This is a Google recommended guideline for building apps for the next billion.
Facebook came out with Facebook Lite – with an app size of only 1.24 MB, to go deeper into emerging markets. Here is how Facebook advertises Facebook Lite:
2. Reduce Data Dependency to Counter Expensive Mobile Data
We observed above that mobile data is expensive, slow and unreliable in emerging markets. In order to tackle it, developers need to incorporate app features that allow the app to be used without data or WiFi.
One of the methods is to cache some content that can be used later. Another option is to allow non-data alternatives like SMS.
For example, Ola which is the biggest local competitor to Uber in India, allows users to book cabs by sending an SMS if mobile data/ WiFi is not available. And Uber allows its users in India to book cabs by calling.
UCBrowser by UCWeb became the most popular mobile browser in India due to its data saving feature and small size. One of the patents on their website talks about their advanced compression technology that reduces data costs by 85%.
In 2014, it was acquired by Alibaba to strengthen its presence in India.
3. Integrate Local Payment Methods for More Users
Credit card penetration is quite low in emerging markets as compared to that in the US. While the US has a credit card penetration at 71%, it is 50% in Brazil, 6% in Indonesia and 2% in India.
Moreover, smartphone habits are different and according to a study by Ovum, only 19% consumers in emerging markets are comfortable in paying through a credit card on mobile.
This has given rise to Cash on Delivery (CoD) for e-commerce apps which has become a very popular payment method for Amazon and Flipkart (Amazon’s local competitor) in India. In fact, 20% of all e-commerce payments by the end of 2016 were made through CoD whereas this number was around 70% a few years back.
Uber adopted Paytm (a popular local wallet player in India) in India to get around the regulatory hurdle of 2-factor authentication in payments. Later, it also started accepting cash as payment in competition with Ola (the local competitor to Uber).
Also, it’s important to support other local payment methods in these markets.
eWallets have 62% market share for e-commerce payments in China with a majority stake between Alipay and WeChatPay.
Payment methods are quite distributed in India with eWallets, bank transfer, cash on delivery and cards having nearly equal shares.
Unified Payment Interface (UPI) launched by the government which allows users to make payments through mobile phones directly from their bank accounts and Paytm – a local wallet player backed by Softbank and Alibaba are quite popular in India.
Carrier billing and payment of online purchases through cash at ATM in Brazil are some other popular payment methods.
4. Focus on Referral Marketing to Increase App Downloads
Word of mouth & referrals through social media like Facebook are the key to app marketing in emerging markets.
As per a survey conducted among mCent users, more than 60% of the users in emerging markets like India, Brazil, Mexico, and Indonesia listed referral from a friend as the top reason for downloading an app.
MakeMyTrip- India’s premier travel portal increased its app engagement and conversion rate by 25% which was driven by mobile app referrals!
5. If You Don’t Offer Discounts, You Won’t Grow
‘If you don’t do them, you won’t grow’, says Paul Malicki, CEO of Flapper – a mobile marketplace for private flights. The average user in developing countries is very price sensitive and discount offers can do wonders.
On 10th Nov 2017, Alibaba hit a new record of $25.4 billion in discounted sales during Singles Day holiday in China. To put this number in perspective, the total sales of Black Friday and Cyber Monday combined in the U.S. was $4.7 billion in 2016.
And get this, 90% of the payments happened through mobile using Alipay.
6. Localize Your App As Users Prefer Buying in Local Language
As per a study by Common Sense Advisory, 72% users in EMs prefer buying a product with information in their own language.
A great example of app localization is the game app Honorbound which received over 5 million app downloads and 14 times more features on the app store from localization. You can see the massive impact in their app store ranking after localization.
Two weeks later, downloads shot up in all of their target countries. Of particular note is Turkey, where they went from not even featuring to number 377.
If you are looking for more case studies, SellMyApp has the best guide on app store localization.
Which language to target for app localization? The answer depends on the type of app but in general, a research by App Annie revealed the following 10 most profitable languages – Japanese, English, Korean, Chinese, German, French, Russian, Portuguese, Italian and Spanish.
But localizing your entire app for multiple countries is a time-consuming task and it is better to start with a minimum viable strategy. Here is how you can execute it:
- First, just translate your App Title and Screenshots on Google Playstore for one country.
- Observe if you see an increase in downloads. If yes, go ahead and translate your entire app listing page.
- Check if you get more traction above, and only then localize your entire app.
- Once you are done with one country, repeat steps 1 to 3 above for another country.
7. Partner with a Local Company to Build Credibility
Partnership with a local company helps you to grow your presence faster by leveraging its local expertise and building credibility in the mind of the local population.
For instance, LinkedIn partnered with Sina, Tencent, and WeChat for entering China.
Similarly, Airbnb has partnered with the Times Group to market their app in India.
Another great strategy is to partner with local mobile carriers. For example, Bemobi – a subscription-based mobile-app-discovery service partnered with local mobile carriers in Brazil such as Telefonica and Oi to offer apps from Electronic Arts and others.
It was in-turn acquired by Opera to establish a presence in Latin America.
8. Don’t Ignore Traditional Marketing Methods
As mentioned above, in EMs the cost of mobile data is high and the network is unreliable at times. So, most users actively switch off mobile data when not in use to decrease data usage and save battery life.
In such a case, offline methods of app marketing like SMS, MMS and Voice ads come in handy.
SMS garners 98% open rates and 33% response rates and thus acts as an effective channel for offline marketing.
Global beverage giant Coca-Cola believes that mobile marketing budget should follow 70:20:10 rule. Wherein 70% is allotted to mobile messages, 20% to mobile internet and 10% to trendy tools like apps, QR codes, Augmented Reality, etc.
Faasos, a food on demand app, has used SMS within its marketing strategy to grow to 1M+ users. SMS is the medium through which Faasos is connecting with users at vital points in their journey to provide important information.
Oyo Rooms the largest branded hotel chain in India increased their bookings by 5X through SMS marketing.
9. Try Alternate Business Models to Leverage User Volume
EMs have a huge number of users. In fact, India and China combined have one-third of the world’s population. So, even though the average revenue per user (ARPU) is low, they can make up for it in terms of volume.
Business models for an app should focus on these volumes to generate revenue.
One such model is ‘crowdsourced by-product’. It basically involves developing an engaging and free app to acquire a huge volume of users.
The app then becomes a crowdsourced labor pool to provide a by-product in exchange for free usage of the app.
For example, Duolingo has used this model to crowdsource paid translations for companies like CNN and Buzzfeed for free from its users.
These translations are much better quality than automated translations and yet cheaper than professional translations.
In fact, cancer research is using a variant of this model. Cancer Research UK developed Play to Cure: Genes in Space a space-themed arcade game to help identify defects in real-world DNA microarray data.
10. Go beyond Google for International Search
The world of search goes beyond Google in emerging markets. There are many search engines that are widely used like Baidu (77% market share) and Qihoo 360 (8.7% market share) in China and Yandex (42% market share) in Russia.
People across different countries search for the same products differently. So, target a different search engine with its specific set of keywords depending on the country for ads.
11. Target the Correct Messaging App/Social Network to Reach Your Audience
The top 10 apps (by Daily Active Users) depends on the country and varies from one emerging market to another. For example, BBM is still the 3rd most popular app in Indonesia whereas SHAREit is among the top 5 apps in India to save mobile data cost.
However, there are some similarities as well like Youtube and Whatsapp are the top 2 most used apps in emerging markets except Indonesia where Google replaces Whatsapp.
So, Youtube should be the preferred medium for ads followed by Google Adwords. Unfortunately, Whatsapp doesn’t currently allow ads but app marketers can leverage Whatsapp by choosing it as the top sharing medium for referrals and content sharing.
As Google and Facebook are banned in China, it has different market dynamics altogether. Baidu, Tencent, and Alibaba (known as BAT) together dominate 72.6% of the app market share.
Among the top 10 apps, Tencent owns WeChat, QQ and Tencent Video whereas Alibaba owns Alipay and UCBrowser.
WeChat Marketing Case Study
In fact, WeChat has been successfully used by many companies to promote their apps in China. You can read the top 10 successful case studies for marketing on WeChat.
Starbucks used WeChat successfully to introduce a new drink by the name of Refresha, made from green coffee bean extract.
- Using WeChat as the platform to spark off Refresha among their customers, Starbucks started the campaign by placing QR codes in their stores on cup sleeves and posters so that users could scan and add the coffee chain as a friend on WeChat.
- The coffee chain then created a playlist of 26 songs to engage with their customers.
- Their fans were then invited to send in any of WeChat’s 26 emoticons to express their mood or feelings. In turn, Starbucks would respond with an appropriate song to correspond to that mood.
- Over the course of 4 weeks, Starbucks gained approximately 130,000 WeChat friends. Most surprisingly the sales volume for Refresha hit RMB 7.5 million in a mere 3 weeks. All of this was accomplished on a budget of just RMB 250,000.
- In addition to this, the brand’s Sina Weibo (Chinese microblogging site) account gained a 9% increase in fans and generated over 57,000 reposts and comments.
12. Use Video Ads to Capture Attention in Emerging Markets
You can notice in the infographic above that Youtube is among the top 2 apps in most emerging markets. In fact, in a 2014 study in Southeast Asia, Middle East and Africa, 67% of the people prefer their mobile device as their primary video platform.
The growth rate of mobile video ads is very high, in some cases touching triple digits, in emerging markets.
Both Youtube and Facebook have noticed the same. That is why Youtube has launched a new app Youtube Go to allow users in emerging markets to save videos for offline viewing.
Facebook has launched a new lightweight video product called Slideshow that allows users to combine photos to create a light sized video ad that can perform across many different types of devices.
However, keep in mind to localize your ad creatives for emerging markets to reach the maximum number of users.
Olx Video Ads Campaign in India
Video ads have been successfully used by OLX, the largest marketplace for used goods in India.
Here are the results of the OLX video ads campaign with InMobi in India. You can watch the video ad here. For their campaigns ‘Let It Go’ and ‘The All New OLX’ with InMobi they managed to reach 25 million monthly unique users and over 300 million monthly impressions.
With over 11 billion page views, 30 million listings, and 10 million transactions per month, OLX has become the largest marketplace in India, Poland, and, Brazil. OLX is free to use and makes money selling promoted listings to users.
Uber and Amazon Have Also Used Video Ads Successfully
Uber’s ad regarding a funny take on arranged marriages in India was wildly successful getting 4 million views on Youtube.
Another app company that has used video ads successfully is Amazon with it #AurDikhao campaign. The objective behind the campaign was to penetrate deeper in Tier II and III cities where the campaign will do well.
It was an attempt to take a global brand like Amazon to masses. The campaign got more than 15000 subscribers for the same.
This ad film is a play on a typical Indian shopper’s tendency to always look at a lot of options to choose from before making a purchase. The film ends urging the viewers to download the Amazon app and enjoy the benefit of choice.
13. Leverage Influencers for Building Your Brand
If you can’t partner with a local company, another way of building trust in emerging markets with the local population is to reach out to influencers.
You need to put a face next to your brand for the local people to believe in you. That’ where you can leverage the fan following of influencers.
‘We found the biggest names in Brazil and contacted them. ‘Why don’t you take a flight in our private jet?’, we asked. From one post, we received 200k likes, with 1.2MM reach. That’s a 16 percent engagement rate. That’s a lot. After that our Instagram followership grew by leaps and bounds.’ – Paul Malicki, CEO Flapper
These engagements from influencers can also have a compounding effect.
In the case of Flapper, they got a feature in the top 4 categories in LinkedIn after an influencer published their story. Each category can have up to 800,000 followers.
Because of this article, the biggest media channel in Brazil featured them the next day. All because they connected with right influencers at the outset.
14. Keep an Eye Out for Ad and User Fraud
You might consider monitoring for fraud as one of those things which are good to do but no one actually does. But you can really burn through your spend if you don’t keep an eye out for them.
Click farms in emerging markets have become a real pain for the eCommerce industry. These click farms generally consist of a 3 to 4 person-setup with hundreds of cell phones and thousands of sim cards attached to computers.
They can quickly burn through your ad-spend on Facebook or Google Adwords by clicking on your ads without providing you any real users. They are also used to send fake ratings and likes to artificially boost your online popularity.
Recently, a big click farm was busted in China with 10,000 mobile phones.
Users in emerging markets like India and Indonesia rely on devices with multiple-SIMs. These devices can inflate your ad impressions and can be used for fraud.
Apps that process payments, especially eCommerce apps, should also be wary of such frauds like coupon frauds ( the same user using hundreds of SIMs to get the first-user discount), payments through stolen credit cards, incorrect refunds/chargebacks, and others.
The best way to tackle this is to build amount, velocity and unique device checks for your transactions, monitor your ad spends and stay away from black-hat marketing.
Emerging markets are currently in their growth phase. Smartphone penetration is increasing as millions of users are added every year.
By 2020, they will contribute to more than 50% of the revenue and downloads on app stores.
Thus, if you are looking to increase your revenue from mobile apps, emerging markets should be a key component of your marketing strategy.
Also, CPIs are currently the lowest in these markets. It offers app developers a chance to get users at the lowest possible cost.
But these markets are quite different as compared to the mature markets like US and UK.
Low-cost smartphones with lesser storage and battery life, expensive mobile data with unreliable networks, and the dominance of Android phones with 90% market share means that the marketing strategies for mature markets can’t be applied to them.
You need to focus on the app marketing strategies that take these difference into account.
So, be selective about which markets you want to enter, plan your expansion carefully and use innovative marketing strategies like the ones mentioned above.
Even if you apply a few of them, you will be ahead of the majority of apps which didn’t fine-tune their strategy. Remember, the market size is huge and even a small share can give you decent returns.
About the author
Neelabh Singh is the Founder of App Disciple. He is passionate about helping beginner app entrepreneurs (with/without coding background) overcome challenges in starting your own profitable app business, through step-by-step actionable advice from genuine, successful developers. Apart from that, he is a productivity ninja and spends his free time reading philosophy and investing in the markets.