ASIA: THE LEADING APP MARKET IN THE WORLD

Asia: The Leading App Market in the World

The Asian app store market is a train that can’t be stopped. This month’s publication takes a deep dive into trends we spotted in Asia and the countries in it. To get a deeper insight into the Chinese market, we have made this publication in partnership with Wandoujia, a leading mobile content search engine for Android users in China.

Major Findings

• Asia is the most lucrative app market in the world. 41 percent of the total revenue globally in December 2013 came from Asia, while North America generated 31 percent and Europe 23 percent. 
• Revenue in Asia increased by 162 percent year-over-year (December 2012 to December 2013), while North
• America’s revenue grew by 46 percent. 
• Japan was undoubtedly the most lucrative country in Asia, followed by South Korea and China, Taiwan, and Hong Kong. 
• Freemium is the leading business model in Asia. 
• South Korea witnessed the steepest growth in revenue. Money generated in the country grew by 271 percent, with Google Play driving most of that growth. 
• Angry Birds Go! was the most downloaded game in Asia in December 2013, followed by 保卫萝卜2：极地冒险 (CarrotFantasy 2: Polar Adventure), and 史上最坑爹的游戏 (The Hardest Game in History).  
• On the Android platform Wandoujia, the most downloaded app was 12306官方, a railway ticket reservation app.

Asia Leads the World

How does Asia stack up against other continents? Globally, 41 percent of the total revenue in December 2013 came from Asia, while North America generated 31 percent and Europe 23 percent.

For Asia the divide in revenue between the Apple App Store and Google Play is almost half-and-half, while for North America, three-quarters of the revenue comes from the Apple App Store and one-quarter from Google Play. The revenue divide in North America also applies to Europe. Clearly, Asia is a different landscape than what’s seen in North America and Europe. Revenue in Asia is more evenly distributed between the Apple App Store and Google Play, while the Apple App Store generates the lion’s share of revenue in North America and Europe.

Below is a representation of the relative growth of each continent in the last year. In the below table, we’re comparing December 2013 to December 2012. All continents show revenue growth in the past year, but there are big differences among the continents. Revenue growth in Asia annihilated all other continents, seeing revenue increase 162 percent year-over-year (December 2012 to December 2013). Revenue swelled in Europe and North America by 45 percent and 46 percent, respectively. Australia saw the least growth, advancing revenue by 23 percent.

In conclusion, we can say that Asia is the leading continent in terms of revenue and had the greatest increase in revenue in the last year.

Aggregated Apple App Store and Google Play Revenue Growth - Comparing December 2013 to December 2012.  (Click Image To Enlarge)

Explosive Revenue Growth in Asia

We already illustrated that Asia is the No. 1 continent in terms of revenue and had the highest growth throughout last year. Below, we separate total revenue in Asia by app store — iPad, Phone, and Google Play. As we stated earlier, revenue in Asia expanded by 162 percent across the last year.  The chart below demonstrates that the spike in revenue is due to Google Play. Revenue from Google Play more than quadrupled throughout the last 12 months.  On the Apple App Store, revenue for iPhone nearly doubled (94 percent) and revenue for iPad grew by 64% (which is still more than the total growth in Europe or North America).

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Top Countries in Asia

When we separated revenue by country in Asia for December 2013, we dug up the following breakdown: Japan was undoubtedly the most lucrative country, followed by South Korea and China. Below the top three were: Taiwan, Hong Kong, Singapore, Thailand, Turkey, Indonesia, and Malaysia. To put into perspective the enormous difference in revenue between the top Asian country Japan and Malaysia, Japan’s revenue is 77 times that of Malaysia’s. The extremely disproportionate revenue share among Asian countries led us to believe that the market isn’t evenly divided.

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We already presented the huge revenue escalation in Asia; after we calculated the revenue growth for the top Asian countries, the numbers looked even more impressive. South Korea witnessed the steepest growth in revenue. Money generated in the country grew by 271 percent, with Google Play driving most of that growth, but also the revenue of the Apple App Store for iPhone grew more than for example the revenue in the United States.

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Now that we’ve analyzed the continent of Asia and its corresponding countries, it’s time to take a look at the business models apps have deployed in the Apple App Store. Compared to the U.S. all the top Asian countries make more revenue from in-app purchases (IAP) than from one-off revenues.

China led the way, with apps generating 96 percent of revenue from IAP. Japan and South Korea were closely behind China with 94 percent and 91 percent of total revenue from IAP, respectively. The freemium model is across the board the dominant business model in Asia.

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The Size of Locally Popular Apps

We took a look at the top 300 apps in Asia, checking to see the number of countries each app ranked in. If an app was only ranked in one Asian country, we defined it as locally popular. In the table below, we display the percentage of locally popular apps. In just a glance, we can see that the percentage of locally popular apps differs greatly among Asian countries.

In the United States, between 25 to 32 percent of apps were locally popular. In Asia, Singapore had the lowest proportion of locally popular apps (between 10 and 13 percent), while Japan had the highest proportion (60 percent 72 percent). The proportion of locally popular apps is directly correlated with specific languages and alphabets for some Asian countries, as well as developers investing in the localization of their apps on the leading platforms. In South Korea, the popular platform Kakao has a lot of Kakao-dedicated apps, while in Japan, the LINE platform is
extremely popular.

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Top Apps in Asia

The top performing apps in Asia on the Apple App Store in terms of downloads are presented below. In the rightmost column the top three country breakdown is included.

Angry Birds Go! Was the most downloaded game in Asia in December 2013, followed by 保卫萝卜2：极地冒险 (CarrotFantasy 2: Polar Adventure), and 史上最坑爹的游戏 (The Hardest Game in History). Most downloads came from China. Apple’s 12 Days of Gifts app was the only exception — it was downloaded the most in Japan (47%), Taiwan (10%), and Turkey (9%).

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Courtesy of Distimo's "Asia: The Leading App Market in the World" for January 2014