Shopping, payment apps top the list among Indian smartphone users

India’s app ecosystem continued its growth trajectory in the first quarter of 2022, primarily driven by mobile payments, shopping and gaming apps, according to a report by Singapore-based data.ai (formerly App Annie).

Besides, mobile phone users in India spent 20% more time daily on apps in the January-March period compared to Q1 2020, and featured among the top seven countries with an average 4.8 hours, it added.

While Instagram, Facebook and Snapchat were among the top five downloaded apps in India, online shopping apps Meesho and Shopee topped the list on the back of India’s expanding online payment and shopping economy. “The dominance of the blockbuster apps was broken by mobile commerce products, Meesho and Shopee. India has an especially vibrant mobile payment and shopping sector,” said Gabrielle Bikker, market insights manager, data.ai,

However, Faisal Kawoosa, founder and chief analyst, techARC, said the increase in downloads are due to the money spent on marketing campaign and is not purely organic growth.

According to data.ai, Free Fire by Garena, the battle royale game of Singapore-based Sea Ltd, which was banned by India in February, and Ludo King by Mumbai-based Gametion Technologies, were the top gaming app in terms of downloads in Q1. Carrom Pool, Merge Fight and Candy Crush Saga also featured among the top five gaming apps.

According to Kawoosa, Free Fire’s popularity isn’t surprising. “It is difficult to switch to other games very quickly. Users get entrenched in games for various reasons,” he added.

Indonesia topped the list of 16 countries where users spent more time on apps and games. with an average of 5.7 hours.

The time spent on apps and games daily by mobile users in India has increased considerably since the pandemic started and people were cooped up in their homes.

According to a November 2021 report by ReedSeer, the gaming industry in India is expected to grow to $7 billion by 2026 from $2.2 billion in 2020. The revenue share of in-app purchases for games will grow from 25% in 2020 to 31% by 2025 at a compound annual growth rate of 30-40%.

Having said that, the boom in online shopping has also spurred digital payments. According to March data shared by MeitY, the volume of digital payments in India grew by 33% year-on-year (YoY) during FY 2021-22. Indians made a total of 7,422 crore digital payment transactions during this period as compared to 5,554 crore transactions in FY 2020-21.

Even non-payment chat apps entered the segment offering UPI payments. For instance, WhatsApp added the payment option in 2020 with a limit of 20 million users due to a cap put by the National Payments Council of India (NPCI) that didn’t allow any single operator to have more than 30% users in the UPI ecosystem.

However, on April 13, NPCI relaxed its rules for WhatsApp, allowing the Meta company to add an additional 60 million users.

The increase in online payments has also led to competition in the super app space. After Paytm and Jio Platforms, now Tata Digital has also launched a super app called Neu that consolidates its various apps and shopping services such as Croma, Big Basket, Tata 1mg under a single umbrella. It has an in-built payment system that supports UPI and card payments and works within the app.