In our latest Developer Economics report, we discussed the rise of e-commerce as the most lucrative of revenue models, expected to account for 2.5 times as much revenue as the rest of the app economy put together in 2015.
Using the ‘Key Developer Metrics’ dashboard on DataBoard, our new, interactive dashboard service, we found that developers in the mature markets of North America and Western Europe had a weaker preference towards e-commerce as compared to the developing markets. Underlying reasons include high fixed line broadband and desktop PC penetration in North America and Western Europe, coupled with the maturity of the local e-commerce markets. Consumers are more likely to stick with their established desktop-commerce habits, while strong motivations would be needed to divert usage from web to mobile.
At the other end, developing markets leapfrogged directly to mobile, skipping the web-only maturity phase that North America and Europe underwent. In Asian markets, mobile-commerce is in many cases perceived as the only alternative to offline shopping and is therefore picking pace rapidly. In India alone, m-commerce went up from about 10% to 50% of online transactions during the last 12 months and is expected to reach 70% in 2015. This poses a significant opportunity for m-commerce apps, especially in the markets where there is weak competition from established brands.
App developers prioritizing the Mobile Browser (16%) have significantly higher adoption of e-commerce than iOS and Android. This is explained by the ease of porting an existing web e-commerce app to mobile and leveraging the popularity of existing e-commerce apps.
On the other hand, [tweetable]iOS and Android, have a similar level of e-commerce adoption (11%)[/tweetable], though for different reasons. The former because of the established spending patterns of their consumers, and the latter because of the wider reach to consumers, prevailing in the regions where e-commerce is growing fastest.
Native apps in this case are not expected to replace web apps, but rather co-exist to address a different need: One-off buyers are unlikely to download an app and are better attracted to the service through mobile web. Once loyalty builds up, it makes sense to move into using a native app in order to take advantage of the better browsing experience and lower friction in transactions that native apps have to offer.
By using further the DataBoard filters we compared revenue generation between developers who use e-commerce vs. those using other business models per primary platform. Our data on 8,000+ developers indicates that adopting e-commerce makes sense across all platforms, as it increases significantly the chances of $5,000+ monthly app revenues (29%) as compared to all other revenue models (19%).
iOS developers building e-commerce apps stand a better chance (+6%) of earning above $5,000 per app per month as compared to their peers who use other business models. For Android developers, the opportunity is far more profound as e-commerce may prove to be the answer to their monetisation problems: The chances of making $5,000 in monthly app revenues are substantially higher for Android developers who build e-commerce apps (27%) than those who don’t (17%). Leveraging Android reach to sell something other than apps, or, in other words using Android apps as a channel, is an excellent opportunity for Android developers who are after app revenues and find it hard to monetise their apps using ‘mainstream’ business models.
The next logical question to ask would be on the profile of the app businesses who are successful in e-commerce. Posed differently, what is the recipe for success in e-commerce? Using our DataBoard service you can find out and plan your future strategy on e-commerce.. You can access packages including DataBoard services here.