Emerging App Markets: Russia, Brazil, Mexico and Turkey

By Hendrik Koekkoek, Analyst at Distimo

Apple App Store for iPad Apple App Store for iPhone Google Play

Distimo was founded to solve the challenges created by a widely fragmented app store marketplace filled with equally fragmented information and statistics. Distimo was launched shortly after the introduction of the first app store. App stores have clearly shown since that time that they are the way forward for content distribution. The app store model offers an enormous opportunity for developers to get their content out and dramatically improves content discovery by consumers. However, the mobile market has long been characterized by fragmentation, which is also displayed in the wide range of mobile application stores that were launched from 2009 on. Distimo is a privately held company based in Utrecht, The Netherlands. Learn more: www.distimo.com

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Distimo Publication - June 2012

NEW AND NOTEWORTHY

Exactly one year ago we wrote a publication about the rise of the application market in a number of East Asian countries. Over the course of the past year the application market in those same East Asian countries continued to grow at a high pace, while at the same time other markets also started to adopt smartphones. We analyzed the application market in the top 30 countries over the course of the past year in terms of revenue, and found four emerging countries to be especially interesting: Brazil, Mexico, Russia and Turkey. All developers that develop for multiple markets should keep an eye on these countries, as they showed strong growth during the past year, and are likely to continue or even accelerate their growth. This report covers four of the top growth markets for applications: Brazil, Mexico, Russia and Turkey. All revenue data in this report covers the revenues generated by the top 200 highest grossing applications, unless otherwise noted. The analysis is limited to the 30 countries that have generated the most revenue during May 2012.1 The major findings are: Excluding the East Asian countries, Russia, Brazil, Mexico and Turkey are the fastest growing markets in terms of revenues generated in the Apple App Store for iPhone with yearly growth rates that range between 54% and 115%. The growth in app revenue in Russia, Brazil, Mexico and Turkey since September 2011 ranges between 76% and 91% in the Apple App Store for iPad. For Russia, the growth in revenue in Google Play is 250% - more than twice the growth rate of the US. Only 4% of all apps in the Apple App Store for iPhone are available in Russian, however, 70% of the revenue from the 200 top grossing apps is generated by apps that are translated into Russian. Since games became available in April 2012 in the Apple App Store for iPhone in Brazil, the revenues increased by more than 80% in one month alone, making Brazil the single largest app market in Latin America. The preferences for types of apps differ largely per country. In Russia, the Books category is a top four category in terms of generated revenue. In Brazil and Turkey, the Books category ranks among the least successful type of applications. Paid apps are not popular in Turkey: only 2 paid apps are downloaded for every 100 downloaded free apps. More than half of the revenue is generated by free apps with in-app purchases in Turkey and Russia. Alternatively, in Mexico and Brazil, paid apps without in-app purchases is the most successful business model. purchases is the most successful business model.
1

Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Hong Kong, Italy, Japan,

Korea, Kuwait, Malaysia, Mexico, Netherlands, New Zealand, Norway, Russia, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United Kingdom, United States Distimo 2012, some rights reserved. All trademarks are the property of their respective owners.

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Two years ago, the total overall revenue generated in the Apple App Store was predominantly generated by the United States. Looking at the revenues generated by the top 200 highest grossing apps per country in June 2010, the US was responsible for 45% of this revenue in the Apple App Store for iPhone. The current state of the Apple App Store for iPhone shows that the top 200 highest grossing applications in the U.S. generate 31% of the top 200 highest grossing applications of all countries combined. In other words, the share of revenue generated outside the US increased significantly over the past two years. This shows that the app industry is truly becoming more and more of a global phenomenon. One year ago, we wrote about the rise of Asia in the app market. In that report, our research revealed that China was the second largest app market in terms of downloads. The U.S. was no longer the only market to focus on when publishing applications in the Apple App Store. This report will focus on the current state of the app markets. We will identify some of the growing markets in terms of revenue in the app stores. We will also analyze how the markets differ from each other and what factors developers should keep in mind when developing for these markets. As a comparison, we will also benchmark these emerging app market countries against the U.S.

GROWTH RATEs YEAR-ON-YEAR

Since May 2011, the total overall revenue generated by the top 200 highest grossing apps in every country increased by 67% in the Apple App Store for iPhone. In the Apple App Store for iPad, this growth was even higher at 76%. We analyzed the top 30 countries in terms of generated revenue in the Apple App Store for iPhone in order to find the most compelling growth markets. We examined the top 30 countries only, in order to filter out the less relevant countries in terms of revenue. The top ten countries in terms of yearly growth in revenue are presented in the table below. The rise of the Asian countries we identified one year ago has not yet ceased or showed signs of slowing. Five out of the ten fastest growing markets in the world are still countries in East Asia. Besides these East Asian countries, Russia, Brazil, Mexico and Turkey are among some of the more compelling emerging app store markets. All of these four countries showed a higher year-on-year growth in revenue than the US. The U.S. itself ranks as the thirteenth fastest growing county at 44%. The countries featured in this months report are the four fastest growing countries outside of East Asia.

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Top Fastest Growing Countries In Terms Of Revenue In The Apple App store for iPhone
Based on revenue of top 200 highest grossing apps, top 30 countries are analyzed, May 2011 - May 2012

Rank
1 2 3 4 5 6 7 8 9 10

Country
Japan Russia China Taiwan Thailand Brazil Mexico Korea Turkey Canada

Year-on-year growth
560% 115% 109% 101% 84% 83% 63% 59% 54% 47%

Combined, the top 200 highest grossing applications in the Apple App Store for iPhone in these four countries generated $160K every day during May 2012. In order to examine the similarities and differences are between these four fast growing app markets, we must first look at the month-on-month growth for each of these markets. The graph below shows the monthly revenue per month. Revenues generated in May 2011 are set to an index of 100 for all countries in the graph. The U.S. is added in the graph as a point of reference.

Index Of Daily Revenue Per Month In The Apple App store for iPhone
May 2011 = 100, top 200 highest grossing apps
250

200

150

100 United States Russia 50 Brazil Mexico Turkey 0

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One of the most remarkable observations from this graph is the high growth of revenue in Brazil during April 2012. The most important reason for this is that there were no games available in the Apple App Store in Brazil before April 2012. When games became available in this country, the generated revenues jumped by more than 80%. Brazil is now the top revenue generating app store market in Latin America. Mexico, one of the largest growth markets as well, is the second largest market in Latin America in terms of revenue. Revenues generated in Mexico during the last year moved almost exactly in line with the U.S. However, in May 2012, when almost all of the app store markets worldwide experienced a decline in revenues, the revenues in the U.S. dropped significantly more than in Mexico. Turkey and Russia showed the most consistent growth of these four countries. Since September 2011, the app store revenues generated from these countries grew almost continuously month-on-month, while in the other countries there have been months where revenues dropped significantly during the same period. The numbers above reveal that these four markets are all high potential markets for success in the Apple App Store for iPhone. However, the potential is not limited to the Apple App Store for iPhone. App revenues surged as well in the Apple App Store for iPad and Google Play in most of these countries as well. When we look at the iPad, the results for the four emerging countries are even more remarkable. We looked only at the growth rates since September 2011, as the Apple App Store for iPad was not available in all countries (e.g. Turkey) prior to that month. The four emerging iPhone countries are also among the seven fastest growing iPad countries in terms of revenue, together with South Korea, Australia and Canada. Growth rates for the four countries range between 76% (Russia) and 91% (Brazil). Therefore, the growth rates in these countries are larger than the U.S. and all of the East Asian countries, with South Korea being the only exception. Russia is now the seventh largest country for the iPad in terms of generated revenues. We have also analyzed the revenues for the US and Russia in Google Play. For these countries, revenues have increased even faster than in the Apple App Store for iPhone and iPad. The revenue from Google Play in the U.S. has increased by 124% since August 2011 (Note: this is the first month that Distimo has revenue data for Google Play), however the revenues in Russia increased by 250% in the same period. Revenues from Google Play in Russia are now 38% of those generated in the Apple App Store for iPhone in Russia.

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DIFFERENCEs AND sIMIlARITIEs bETWEEN THE MARkETs

The story outlined above shows that these countries have tremendous potential. For developers who want to start publishing apps in these markets, it is interesting to see whether the markets are different from each other and different from the largest market for apps, the U.S. Over the course of the past year, in-app purchases have become the main source of income for many developers. In the U.S., 66% of the revenue from the top 200 highest grossing apps is generated by free apps with in-app purchases (freemium apps), and only 13% of the revenue is generated by paid applications that dont have any in-app purchases. The US. is ahead of the other countries in terms of the success of in- app purchases and freemium apps, however, freemium apps generate more than 50% of the revenue of the top grossing apps as well in Russia and Turkey. In the two Latin American countries, Brazil and Mexico, freemium apps are less successful. Around 40% of the revenue is generated by paid applications without in-app purchases in these countries. This shows the differences in monetization strategies per country. Developers should keep this in mind when focusing on one of these growth markets.

Revenue share Per business Model In The Apple App store For iPhone
Top 200 highest grossing applications, May 2012

Brazil Mexico Russia Turkey 0%

Paid Applications Paid Applications With In-App Purchases

100%
Free Applications With In-App Purchases

The findings above are also reflected in the download volumes. We calculated the ratio of downloads generated by the top 200 free compared versus downloads generated by the top 200 paid applications. The free-to-paid ratio is higher in favor of paid apps in Mexico among these four countries. For every 100 downloaded top 200 free apps, six top 200 paid apps are downloaded. It is the most difficult to sell apps in Turkey: for every 100 free apps only two paid apps are downloaded. Even though freemium apps are successful in the U.S., the free-to-paid ratio is most favorable to paid apps in the U.S. compared to the other four countries.

Number Of Downloaded Paid Apps For Every 100 Downloaded Free Apps
Based on top 200 paid applications and top 200 free applications in the Apple App Store for iPhone, May 2012

brazil
5.4

Mexico
5.9

Russia
5.0

Turkey
2.2

U.s.
7.5

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lOCAl PREFERENCEs
It is not just the success of the various business models that are different across these four countries. We analyzed the top 200 highest grossing applications in May 2012 per country, and discovered that consumer preferences are largely different in these countries. The graph below shows the proportion of the 200 highest grossing apps in these countries that are among the 200 highest grossing applications in the U.S. as well. It shows that only a small proportion of the most successful applications in a country are also successful in the U.S. Mexico is the market that is most similar to the U.S. where 43% of the 200 highest grossing applications in Mexico are also among the 200 highest grossing applications in the U.S. This proportion is much lower in Turkey with only 28%, which reveals the strong local preferences of this country. A successful app in the U.S. will not automatically be a successful app in one of these countries. To illustrate the local preferences of consumers in these countries, the most popular free and paid applications per country that are locally popular only is presented at the end of this report for the Apple App Store and Google Play.

Proportion of top 200 highest grossing apps per country that is among top 200 highest grossing apps in the Us as well
May 2012, Apple App Store for iPhone
100%

0% Brazil Mexico Russia Turkey

We assessed the revenue generated by the top 100 highest grossing applications per category to further analyze the local preferences per country. We have ordered the categories by amount of revenue generated. The graph below shows the revenue generated by the top 100 highest grossing apps in a category as a proportion of the revenue generated by the top 100 most grossing apps in all categories combined (for the top categories). In all of the countries, Games is the category that generates the most revenue. Interestingly, games have only been available in the Brazilian App Store since April 2012, but the proportion of revenue generated by the Games category is relatively small compared to other countries. In all countries, Entertainment is a top category as well. In Brazil, the Navigation category is the second highest revenue generation category with 12%. The Navigation category comes in at the ninth spot with only 3% in Mexico. Another remarkable difference is the success of the Books category in Russia. In Turkey and Brazil, the Books category is the second least and fourth least successful category, respectively. Hence, publishing a book might be a good idea in Russia, but you might want to rethink your strategy if you want to publish a book in the App Store for iPhone in Brazil or Turkey.
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Top Categories Per Country In The Apple App store For iPhone, May 2012
Revenue generated by the top 100 highest grossing apps per category as a proportion of the sum of the revenue generated by the top 100 highest grossing apps per category

brazil
All Games Navigation Social Networking Entertainment
0% 30% 60%

Russia
All Games Navigation Entertainment Books
0% 30% 60%

Mexico
All Games Entertainment Productivity Photography
0% 30% 60%

Turkey
All Games Navigation Social Networking Entertainment
0% 30% 60%

lANGUAGEs
When publishing an app in countries other than the United States, it is important to remember that consumers like to use apps that are available in their own language. The graph shows the proportion of revenue generated by applications in the main local language of that country in the Apple App Store for iPhone. For example, in Russia more than 70% of the revenue is generated by applications in Russian. In Turkey, the proportion of revenue generated by applications in Turkish is only 30%. This might seem low, however, it should be noted that less than 2% of all apps in the Apple App Store for iPhone are available in Turkish (red columns). When comparing the proportion of revenue generated by apps in the local language with the availability of apps in their local language, it shows that consumers are keen to download the apps that are available in their local language.

Proportion Of Revenue Generated by Applications Available In The local language And Proportion Of Apps Available In local language
Top 200 most grossing applications, Apple App Store for iPhone, May 2012
Turkey (Turkish) Russia (Russian) Mexico (Spanish) Brazil (Portugese) 0%
Proportion of Revenue Generated By Apps In Local Language

40%
Proportion Of All iPhone Apps Available In Local Language

80%

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RECAP
This report analyzed four of the most compelling new growth markets in the app store landscape. Brazil, Mexico, Russia and Turkey are all markets that showed a higher yearly growth in terms of revenue than the United States did. The high growth makes these markets interesting for developers. We also mentioned several differences in consumer preferences in this report that developers should take into account when entering these markets. Success in the U.S. wont necessarily guarantee success in these markets. Customers always prefer apps that are translated in their own language. It is important to review your business models or the type of app if you aim for success in a specific country as well.

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DIsTIMOs PAID FEATURED REPORTs: GAIN DEEP INsIGHTs INTO All MAJOR APPlICATION sTOREs. sTARTING AT 399
The reports are available for May 2012 and an annual 2011 report is available for North America, Europe and Asia. In addition to the the major trends in the app stores, each report covers an extra topic: The May 2012 report covers month over month pricing trends and provides more insights into the daily download volumes in the major app stores including Google Play. Moreover, it shows the actual downloads to expect in the region. The annual 2011 report covers all major trends, in growth and in pricing among others, in the app stores covering the period January 2011 - November 2011.

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MOsT sUCCEssFUl lOCAllY POPUlAR FREE AND PAID APPlICATION

APPlE APP sTORE FOR IPHONE - MAY 2012
Rank Brazil Application For our joy by Asnis Apps Category Entertainment Price free

Brazil

Dicas e Truques - Segredos do iPhone by Intelligenti Ltd App Del Dia - Descarga gratis una aplicacin al da ! by GuillaumeSZTEJNBERG TV Mexico App by Enimafix Software

Education

$0.99

Mexico

Lifestyle

free

Mexico

Entertainment

$0.88

Russia

Waterbalance by Waterbalance

Healthcare & Fitness

free

Russia

TV Russia Premium by IOS Premium

Entertainment

$0.99

Turkey

Garanti Cep Subesi by T. Garanti Bankasi A.S.

Finance

free

Turkey

Zil Sesleri by UGR TEKNOLOJI

Entertainment

$0.99

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MOsT sUCCEssFUl lOCAllY POPUlAR FREE AND PAID APPlICATION

APPlE APP sTORE FOR IPAD - MAY 2012
Rank Brazil Application AppGrtis para iPad - 1 app grtis para iPad todo dia by iMediapp Category Entertainment Entertainment, Games-Kids, Games-Puzzle Entertainment Price free

Brazil

Jogo das Bolinhas by Renato Pessanha

$0.99

Mexico

Cinpolis by IA interactive

free

Mexico

El Chavo. A Carnival in the Apartments. by Televisa

Games-Arcade, Games-Kids

$0.88

Russia

Stream by Stream, LLC (Russia)

Entertainment

free

Russia

TV Russia Premium by IOS Premium

Entertainment

$0.99

Turkey

Milliyet Gazete by Milliyet Gazetecilik Yayincilik Anonim Sirketi Film Dizi izle - Pop Corn Player by Fatih Dursun

News

free

Turkey

Entertainment

$0.99

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MOsT sUCCEssFUl lOCAllY POPUlAR FREE AND PAID APPlICATION

GOOGlE PlAY - MAY 2012
Rank Brazil Application Palco MP3 Category Music & Audio Price free

Brazil

SVOX Br. Portug. Luciana Voice

Communication

$2.99

Mexico

Descargar Musica MP3

Media & Video

free

Mexico

Deep Space LWP!

Live Wallpaper, Personalization

$0.99

Russia

VKontakte

Social, Widgets

free

Russia

Dr.Web Anti-virus

Tools, Widgets

$4.99

Turkey

Okey

Games-Cards & Casino

free

Turkey

S-Banking

Finance

$0.85

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DIsTIMO CUsTOM REPORTs

Aside from this free monthly publication, Distimo produces custom reports capable of providing specific mobile application store analytics that are relevant to your company. Custom reports are currently available for any country worldwide for the Amazon Appstore, Apple App Store for iPhone, Apple App Store for iPad, Apple Mac App Store, BlackBerry App World, GetJar, Google Android Market, Nokia Ovi Store, Palm App Catalog, Windows Phone 7 Marketplace. Additional application stores will be available in the coming months. To get a better idea of the type of data and metrics that Distimo can provide, please visit our Report product page.

CONTACT Us
For sales inquiries, please contact Remco van den Elzen, VP Business Development at remco@distimo.com or call +31 30 82 00 567. For press inquiries please contact Mindy M. Hull at mindy@mercuryglobalpartners.com or call +31 62 504 7680 (EU) or +1 415 889 9977 (USA).

AbOUT DIsTIMO
Distimo is the innovative app store analytics company built to solve the challenges created by a widely fragmented app store marketplace filled with equally fragmented information and statistics. Distimo Report provides in-depth customized reports for carriers and operators and offers valuable insight into important trends happening within different application stores around the world. Custom reports are currently available for the Apple App Store for iPhone, Apple App Store for iPad, Apple Mac App Store, Amazon Appstore, BlackBerry App World, GetJar, Google Android Market, Nokia Ovi Store, Palm App Catalog, and Windows Phone 7 Marketplace. Distimo Monitor is a free, cross-platform, app monitoring tool for developers that enables them to monitor their own and competitive applications across all app stores, without any adjustments needed to their applications code. AppLink is a first-of-itskind, easy-to-use, cross-platform app distribution service within Distimo Monitor that provides developers with detailed insight into their app distribution analytics and their app sales funnel. Founded in 2009, Distimo is a privately held company based in Utrecht, The Netherlands. Follow us on Twitter, read our blog or learn more at http://www.distimo.com.

Disclaimer This work is licensed under Creative Commons License Attribution Noncommercial-Share Alike 3.0 Netherlands. This license is available for download at http://creativecommons.org/licenses/by-nc-sa/3.0/nl/. This license ables you to use, copy, spread, and build upon this work non-commercially, as long as you credit Distimo and license your new creations under the identical terms. Distimo 2012, some rights reserved. All trademarks are the property of their respective owners.