The mobile app APAC market is experiencing explosive growth due to the rise of smartphones. Smartphone penetration in the region increased from 64% in 2019 to 76% in 2022, and this trend will continue with estimates going upwards of 90% by 2030. App developers have a lot of opportunities due to the increasing number of mobile users.
Developers need effective strategies to take advantage of this rapid growth in the mobile app market. As one of the fastest-growing companies in the APAC region in 2024, our experts at Vinova have assessed the four major ways that have proven successful in mobile app monetization in APAC.
What Are The Potentials For Mobile App Monetization in APAC:
The APAC mobile app industry is thriving, especially for video streaming services. People are spending more on subscriptions – a whopping $13.5 billion in the App Store and $4.8 billion in the Google Play Store in 2021, which is a big jump from the previous year!
Despite this growth, app developers in APAC still face some hurdles. Many users prefer free apps, which is why the freemium model (free download with paid upgrades) is so popular. This model works well because it fits with typical spending habits in the region. For instance, the freemium model has fueled the mobile gaming market’s success in APAC, thanks to the growing number of smartphones and better internet access.
However, freemium also has drawbacks. It relies on in-app purchases and advertising to make money. In fact, a big chunk (34%) of global mobile ad spending goes to APAC apps, showing how important ads are in this market. But not everyone makes in-app purchases, which can limit income.
Another challenge is the difference in payment methods across countries. China uses Alipay and WeChat Pay, while Vietnam and the Philippines have their own favorites like MoMo and GCash. This means developers need to adjust their strategies (like offering in-app purchases, ads, or subscriptions) based on what works best in each location.
To win in the APAC market, developers need to understand the unique features of each country and tailor their approach accordingly. Here are 4 key strategies to help you make money from your apps in this exciting region…
1. In-App Purchase: More Money and Engaged Users
Letting users buy things inside the app (in-app purchases) is a common way for app makers (developers) in APAC to earn money, especially in mobile games. This lets players buy virtual items or unlock new features to make the app more fun and give them more to do, which can enhance their user experiences. For example, in a game, users might buy in-game currency to upgrade their character or unlock new levels, making the game more exciting.
In-app purchases can be a big win for developers in two ways:
- More money: They can bring in a lot more cash for developers.
- Happier users: Offering extra stuff for a fee lets developers make money without forcing users to pay upfront. This can also make users play the app more because they’ve invested real money in it.
But there’s a catch… In-app purchase strategies can also cause problems if not done carefully. Here’s why:
- Frustration: If users feel like they have to spend money to really enjoy the app, they might get upset.
- Balance is Key: Developers need to find a sweet spot between making money and keeping users happy. Don’t scare them away!
Case Study: Honor of Kings:
“Honor of Kings” is a mobile game that shows how in-app purchases can be done right. It’s one of the most popular battle arena games in the world!
What makes “Honor of Kings” successful with in-app purchases? One of the reasons “Honor of Kings” has been so successful with its in-app purchases is the balance it strikes between offering free gameplay and optional paid content. It lets you play for free, which attracts a lot of people. But it also offers cool things you can buy, like in-game virtual money, skins for your characters, and power-ups. These extras make the game more fun, but users don’t have to buy them to play.
This approach has made “Honor of Kings” a huge money-maker, raking in almost $1.5 billion in revenue! It shows that in-app purchases can be a great way to earn money if you do them carefully and give players a good reason to spend. By offering valuable extras, “Honor of Kings” keeps users happy and optimizes mobile app monetization in APAC at the same time.
2. Subscription Models: Exclusivity Sells
Subscription models for mobile apps are becoming a popular way for app makers (developers) to earn money with their mobile apps. In this model, users pay a regular fee to access all the app’s features or content. This is a good deal for both developers and users:
- Good for Developers: Subscriptions bring in a steady flow of income, unlike one-time purchases.
- Good for Users: Subscriptions often unlock exclusive content and remove ads, making the app more enjoyable.
To make subscriptions successful, developers should offer different plans at different prices. This gives users a choice depending on what they want to access, whether it’s basic features or everything the app has to offer. Additionally, offering free trials lets users try out the subscription before they commit to paying.
Case Study: Viu’s Tiers
Viu, a video streaming app in Southeast Asia, is a great example of how subscriptions can work well. The app lets you watch shows and movies in different ways. The free tier lets you watch some shows and movies with ads. This is a good option for users who don’t want to pay upfront, which is common in this region. But, for users who want a better experience, Viu offers paid subscriptions. Here’s what you get with a paid subscription:
- No Ads: Watch shows and movies without any interruptions.
- Exclusive Shows: Get access to shows you can’t watch for free.
- Early Releases: Be the first to watch new content.
- Offline Viewing: Download shows and movies to watch on your phone or tablet, even without the internet.
- Full HD: Watch shows in the highest quality.
This approach has made Viu a lot of money. Their income from subscriptions, ads, and content licensing grew by 45% in one year, reaching $206 million in 2022. The number of people using Viu and the number of paying subscribers are both growing steadily. This shows that users are not only signing up but also enjoying the content. Viu has been the most popular video streaming app (by monthly active users) for 12 quarters in a row, and it ranks second in both paid subscribers and total viewing time across Southeast Asia.
Mobile Advertising: Incentivize Your Users!
Ads are a big way for app developers to earn money, and they also let users enjoy apps for free. This makes it the primary mobile app monetization strategy in APAC. There are different kinds of ads, each suited to how people use apps:
- Banner ads: These are the box-shaped ads you see on many apps.
- Rewarded video ads: These are short videos you can choose to watch in exchange for a reward in the app, like extra points or special features.
In Asia (APAC), people generally prefer ads that don’t get in the way of what they’re doing in the app. That’s why rewarded video ads are popular – you get something for watching them, and they don’t interrupt your experience like banner ads can.
The APAC market is huge and very diverse. To make ads more effective, it’s important to tailor them to each country. This means going beyond just translating the words:
- Local Customs: Consider what people in that country find interesting or appropriate.
- Values: Think about what’s important to people in that country.
- Behavior: Understand how people typically use apps in that country.
By making ads relevant to the users’ culture, they’re more likely to pay attention and the app will make more money.
Case Study: Earn to Die 2
“Earn to Die 2” is a game that shows how rewarded video ads can be a great way to make money. The game developers (Not Doppler) wanted to find a way to include these ads without hurting the way players earn things in the game.
So, they created a special system where the rewards you get from watching ads change as you progress through the game. This kept things fair for players and made them more likely to watch ads.
The results were impressive! The number of people playing the game and watching ads went up by 25% to 38% more than usual, without needing to limit how many ads users saw. This shows that non-intrusive ads can be a great way to make money from apps, especially in APAC where users prefer them.
Freemium Model: Happy Users, Happy Business!
The freemium model is a popular way for mobile app monetization in APAC. In this model, users get to use the basic features of the app for free, but have to pay to unlock extras. This has a few advantages:
- Getting Users: By offering some things for free, apps can attract a lot of users. This makes more people aware of the app and lets them try it out before they pay.
- Happy Users: If users find the free features useful, they might be more likely to upgrade to the paid version later. This can make them like the app more and become loyal users.
However, it’s important to find the right balance between free and paid features. If the free features are too good, users might not see a reason to pay extra. But if the free features are too limited, it can become a paywall that discourages users from even trying the app. Finding the sweet spot is key!
Case Study: Lazada
Lazada, a big online shopping app in Southeast Asia, is a great example of how the freemium model can be successful. They offer a mix of free and paid features:
- Free Tier: You can browse and shop for many products without paying anything, and includes a selection of products across different categories. This is perfect for users who are new to the app or don’t want to spend money upfront.
- Premium Features: For users who want more, Lazada offers paid subscriptions. These subscriptions come with benefits like faster delivery and exclusive discounts.
By giving users a choice and letting them try the app for free, Lazada is able to attract a large user base. The premium features then encourage some users to upgrade, which brings in more money for the app.
This approach has been very successful for Lazada. They have over 150 million users every month, and their online sales have almost doubled year-over-year. In 2021, they sold over $21 billion worth of products! This shows that the freemium model can be a great way for apps in APAC to make money, especially when it caters to the needs of different users.
Conclusion
This blog has unpacked various strategies to monetize your mobile app in the booming APAC market. We’ve explored in-app purchases, subscriptions, mobile advertising, and the freemium model, each with its unique strengths and considerations. Remember, the best approach depends on your target audience, local preferences, and app goals.
For businesses in APAC, crafting a tailored monetization strategy is crucial. Understanding user behavior in your target market and adapting to local dynamics is essential. Choosing the right mix of strategies will help your app thrive.
The app development landscape can be complex. Vinova’s mobile app development and monetization experts can guide you every step of the way. Reach out to our expert today, to identify the most effective strategies for your app, navigate the nuances of the APAC market, and ensure your app reaches its full revenue potential.