Asia and Apple dominate in-app spending

A general study from AppsFlyer into  in-app spending shows a big difference between Android and iOS users while confirming Asia, as ever, as the biggest market.

The paper’s key message is that businesses which will succeed in the app economy are those that understand the theory and practice of the lifetime value (LTV) of a customer.

LTV combines monetization – not only what a user buys and subscription fee where relevant but also their value to ad networks – and retention – the likelihood that a user will keep using the app.

While there is no specific travel data pulled out, “booking a flight” was mentioned as an example of an in-app purchase meaning that there are some travel apps among the 1000-plus looked at for the report. AppsFlyer has a dedicated travel unit.

The most compelling headline finding is the fact that “Asian users spend 40% more on in-app purchases than the rest of the world”, although the report notes that the popularity of gaming could skew the results.

The confidence of mobile-first Asians in making in-app purchases resonates with online travel agencies in the region which have made great strides (and spent lots of money) persuading users to download their app.

India’s MakeMyTrip, for example, has run a number of successful AppFest promotions, offering discounts to new users. Its CEO Deep Kalra said on its Q1 earnings call recently that these investments were made with LTV in mind – “We are making long-term investments at a critical stage in the market,” he told analysts.

In mature markets, the in-app purchasing debate has ramped up recently in response to the flurry of travel-related Facebook Messenger chatbots, some of which are transactional.

So in the US, AppsFlyer found that “North America was a clear frontrunner as compared to other regions, with over three times higher spend than the average European shopper, and nearly three times more than the Asian shopper.” So less in-app shoppers in the US than Asia, but they are likely to be higher spenders.

Whether that means people from San Francisco are more likely to transact with a travel bot than someone from Shanghai remains to be seen.

But as users generally become more comfortable with in-app purchases, and the app economy develops as a  discrete discipline within ecommerce, apps will have a role to play in actual travel transactions, and chatbots will be part of that future.

Elsewhere, the finds that the average spend on iOS apps is nearly 2.5 times the amount spent by Android users. And iOS users are 50% more likely to make an in-app purchase.

“Overall, iOS dominance was seen across regions and verticals (with the exception  of the utilities/tools category)” it said.

Click here to read the AppsFlyer release, from where the full study can be accessed.

Related reading from Tnooz:
Yatra launches Facebook Messenger bot (July 2016)
Data suggests airports are wasting their time with mobile apps (April 2016)
A tipping point for travel, as apps overtake mobile web (Feb 2016)

NB Image by ymgerman/bigstock.com.

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Martin Cowen

About the Writer :: Martin Cowen

Martin Cowen is contributing editor for Tnooz and is based in the UK. Besides reporting and editing, he also oversees our sponsored content initiative and works directly with clients to produce articles and reports.

For the past several years he has worked as a freelance writer, specialising in B2B distribution and technology.

Before freelancing, from 2000-2008, he was launch editor for e-tid.com, the first online-only B2B daily news service for the UK travel sector.

 

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