Mobile App market in India

Posted by Swaroop C H on October 6, 2009 Filed under: business, india, mobile-phone, startup, tech

Thinking from an entrepreneurial angle, it seems to me that there is almost no mobile app market in India today i.e., it is not a startuppable market.

All the successful apps that are making money are transaction-based. For example, ngpay takes a cut from every movie ticket you buy through it. This is only possible for entertainment-oriented apps. The only other successful ones that I see are, of course, communication apps such as Gmail app. I see almost nobody using utility applications on their phones.

Things can improve only if internet-on-mobile was affordable! I think we need 3G for mobile app market to grow in India, but it is delayed yet again (Apparently, the government is not satisfied with the expected 250 billion rupees).

Let's take a look at few numbers:

Of course, there is no denying that there is growth year-over-year, but for an entrepreneur, it is not enough yet. Because you can't build yet-another-social-network nor can you build content unless you have tie-ups with the big movie/music companies. The top websites in India for internet-on-mobile conform to the core needs list that I wrote about earlier, especially entertainment. The free wallpapers from seems to be the hottest thing right now. Or as Rajesh Jain keeps stressing (and practises), focus on SMS and Voice for now.

Let's hope the IAMAI will help things move forward.

Even when we get affordable internet-on-mobile, I wonder if ad-supported free applications will be the only popular ones always. Where's the money?

Maybe I completely mistaken or I'm just whiny, because MediaNama paints a much brighter picture, from comics to unlimited music for Rs. 99/month to movie rental and chocolates. Hah! There is a gotcha there -- all those announcements are from big guys. Where are the mobile app startups?

I am planning to attend Silicon India's Mobile Conference this month to gain more perspective on this.

To round things up, here are some rough notes that I jotted down when Karthee Madasamy of Qualcomm Ventures talked about How to make a winning mobile startup at an OCC Meet on Aug 15. It was probably the only time I felt hopeful that a mobile app startup is possible today.

  • Understand the status quo. Don't do the status quo.
  • If there are hurdles, that's your opportunity. Otherwise, others would've taken advantage already.
  • India 400 million mobile phone users.
  • Segment the customer. Otherwise, big companies will be already on it.
  • Don't aim for 1% of ocean. Go for 50% of a small market that you undertand well.
  • Don't do today's technology. Go for future. Don't be 10% better, be significantly better.
  • Do you have something unique that gives you strengths? Have a honest discussion on the problems and future competitors and your strengths.
  • Can you partner with others in the ecosystem, support their weaknesses, and together be more strong.
  • Ecosystem problems - operators, heterogenity of platforms and mobile phone capabilities, difficulty in educating customers, no Internet on mobile, etc.
  • Only way a startup will succeed is by discovering a latent demand or latent technology.
  • If operators are critical to the ecosystem, obviously they will charge more money! Why is that a problem because they are giving value back. Get the first million customers yourself and the operators will put red carpet for you. Startups' strength is to turn the tables!
  • Find a mechanism of educating customer about value of the product and that will obviate the need for operators.
  • If only 40 million mobile Internet users, you only need half a million users to break through the barriers! People will come after you.
  • Assume cost of building product or app is zero. Only building half a million customers is something.
  • 120 million capable phones today. India is a fast market. Imagine 2 years later.
  • Startups should change the game to their advantage. At the same time, it is NOT a zero-sum game. Make a win-win partnership. Both people should profit.
  • Don't complain about market research. Ultimately, you HAVE to understand the market better than anybody. Be resourceful. Also, accuracy is not important, the direction of the market growth is more important.
  • Don't go to VCs without 20,000-30,000 users.
  • Can you scale up to 20 million dollars revenue? Then you'll get your pay-off.
  • Startups need to think how to beat the big guys.
  • Make a state-of-the-art technology or business model and ask people to pay premium for it.
  • First step for product management is segmentation.
  • Make it clear to yourself about how you're reaching your target customers. Don't do it in a haphazard manner.
  • Read about Ron Coase economist why companies exist.
  • Read about Teece theory on who captures value in technology.


Devdas Bhagat says:

The problem with the telephone network is that the telco is still the gatekeeper. If you are selling services, you have to give the telco a cut of your pie, and they decide if your revenue quantity is worth it to them now.

The Apple store worked because it bypassed the telco. The Internet works because it bypasses the telco's command and control systems.

The best way to sell mobile apps in India would be to offer a downloadable binary which works offline. Most mobile users can connect to the Internet for bigger downloads, but would rather not stay connected all the time due to the data charges.

You need to remember that India is still a price sensitive market, and play by the rules of that market.

Swaroop says:

@Devdas Good points, especially about the offline mobile app.

Bharath C J says:

This response is per-se not aimed only at this post... but it is more generic. I have read your other posts (going without salary for a year) and also looked at the business you are running.

I suffered heavily during dotcom boom. I was part of a team which started second browsing center in Bangalore and was later heading marketing activities of a company which was focused on Portal Business (B2B, B2C...). We were too ahead of time as far as Indian market was concerned. Even today Indian online business is not matured.

Traditionally India always takes 2 decades to catch up on any new technology (building successful business out of)

All the talk about Startup business is a big bakwas in Indian context. India doesn't have any environment to explore / sustain new ideas (and failures). Here business means cash flow.

For Mobile Apps only way forward (for another decade):
1. Business Applications (as a part of a bigger product... say for a stock broker, Bank or a college). You partner and develop mobile channel for them.
2. Personal Apps built specifically for US or European markets and retailed via web.
3. Partner with mobile instrument manufacturer like Nokia and develop something for them
4. Maintain big mobile Apps like Apple store for them.

Do not look at concepts which are successful in other markets and try to implement here. Look for Money from the day one. Cash flow is the mantra.

Forget about all big brand market research reports ( I have spent thousands) and 'start up' brain washing.

Just look for money.

Sreenivas says:

Even few companies who are doing mobile-app research have come to the same conclusion I guess. Due to what ever reason mobile users are not using apps. Only few handful of users of high end phones seem to use them.

Is the small screen the deterent ?
Should the operators/license procedures to be blamed ?

Or using internet itself is frowned upon due to so many misuse news making into the media ?

Swaroop says:

@Bharath Lot of good points, and rest we have discussed over email :)

@Sreenivas sir, I think it has to do with price of internet-on-mobile, once that becomes cheap, I think in a year or two, there will be a huge market. For example, my father wanted to use email on mobile, once he heard the tariffs he lost interest.

rajeev says:

interesting pov- and what i do take away from this post, and agree with, is that in India, it is extremely difficult for a startup entrepreneur to make it big in this space, as the barriers and obstacles are very high.

however, there is no denying the trendline- perhaps not many people are aware that in commercial terms, bollywood means Rs 400 cr to just one mobile operator alone- makes them the largest grosser of bollywood music in the country.

Finally, looking at it from the consumer and the society viewpoint, India, in my opinion, is ripe for a fabulous mobile ecosystem, with tremendous innovation and great business models, given that for the "argumentative indian", the right to converse is more valuable than most things, and given that 1 billion minds are going to be hacking away at this issue for the next few years... not to mention the fairly low (voice atleast) pricepoints that prevail in the market currently, and which will dive lower with the current price war.

which should be good news for all of us.

bipin says:

Hey, interesting points but I think you are missing the fact that there are a lot of small developer teams in India which are making apps for iPhone and European markets. The problem is marketing their apps in India , which is difficult given how tough it is to get to operator's walled garden. If you cant do a million downloads, operators wont be interested.

We at are trying to create India's first PULL brand for mobile services. Mobile services include voice,data and applications. We think there is a strong need for a democratic apps marketplace in India.

Swaroop says:

@Rajeev Yes, there is a trend going forward! What I'm saying is that it is 2-3 years away and not today. I agree with the rest of the discussion on your blog.

@Bipin I mentioned "mobile app market in India", I do not care about products built for other markets.

Do you have an example where the marketing could not be done explicitly because of the operator's walled garden? My POV is that the tariff for internet-on-mobile is the only limiting factor.


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