The market for mobile applications in Africa is flourishing. Here’s why.
Restrictions to help stop the spread of the COVID-19 virus have limited physical contact, forcing people to rely more on virtual interactions through mobile apps. The increased interaction with these apps has had a significant impact on the global app market. According to Sensor tower intelligence, consumer spending on mobile apps peaked at $ 64.9 billion in the first half of 2021 on the App Store and Google Play.
To understand how the ecosystem of African applications has behaved since the start of the pandemic, Google and AppsFlyer, the global leader in marketing measurement, released a report that reveals a thriving mobile app market in three of Africa’s largest app markets (Nigeria, Kenya and South Africa) between Q1 2020 and the first quarter of 2021.
The report, which analyzed more than 6,000 apps and two billion installs in South Africa, Nigeria and Kenya, showed strong growth in the African mobile apps market, with an overall increase in installs of 41%. Nigeria posted the highest growth, with an increase of 43 percent, followed by South Africa – 37 percent and Kenya – 29 percent.
The COVID-19 pandemic, a growing fintech ecosystem and an increase in super apps are some of the factors responsible for the boom in the African mobile app market.
COVID-19 and containments
There was a restriction on mobility within countries, although to varying degrees. Containment has been more severe in South Africa. As a result, the country saw a 17% increase in the number of mobile app installs, compared to an increase of 2% and 9% in Nigeria and Ghana, respectively. According to AppsFlyer, gaming apps performed well between Q1 and Q2 2020. The segment grew by 50%, compared with an 8% increase in downloads of non-gaming apps.
Revenue from in-app purchases
According to the report, consumer spending increased in the third quarter and accounted for 33% of in-app purchase revenue in 2020. The most notable trend was an increase in in-app purchase revenue of 136% between July and September compared to the previous three months.
Revenue from in-app purchases in South Africa grew by 213%, while Nigeria and Kenya saw significant increases of 141% and 74%, respectively, during the same period. App advertising revenue has increased dramatically, with Africans glued to their smartphones more than ever. Between Q2 2020 and Q2 2021, app ad revenue increased 167%.
Since Android has a larger market share in Sub-Saharan Africa, advertisers are spending more money on the platform. Non-organic installs grew 54%, while iOS installs grew 19%. Between Q2 and Q3 2020, the cost per install (CPI) on iOS increased by 21%, implying that iOS app developers were getting fewer installs for the same budget.
There was no increase in non-organic installs on iOS towards the end of the year and into 2021, compared to a 40% increase on Android. Gaming and non-gaming apps, which were highlighted in the first two quarters, grew 44% and 40%, respectively, in the first quarter of 2020 compared to the second quarter of 2020.
Fintech and super-apps
The development of African fintech has accelerated in recent years. According to a Disrupt Africa report, African fintechs grew by 89.4% between 2017 and 2021. Currently, the continent is home to more than 570 startups. Nigeria is at the head of this ecosystem, which is home to notable fintech companies such as Paystack, which was acquired by Stripe for $ 200 million, and Flutterwave, which raised a $ 170 million round.
There is now a plethora of fintech startups receiving funding from various sources. Fintech startups are building inclusion from the ground up on a continent where more than half of adult Africans have no access to any form of banking services. Many fintechs render their services through mobile gadgets, thus reflecting the number of fintech apps Africans use every day. Consumers in South Africa and Nigeria saw the number of financial app installs increase year over year by 116% and 60% respectively.
AppsFlyer claims super apps are on the rise as well. Super Apps are “all-in-one” apps that provide users with a range of functions such as banking, messaging, shopping and ridesharing. “Super apps remove some of the barriers these users face, while providing a level of knowledge and customer experience that traditional banks cannot,” the report says.
Commenting on the trends highlighted in the report, Daniel Junowicz, RVP EMEA & Strategic Projects, AppsFlyer said, “We are proud to join forces with Google to provide businesses with the information and technology to succeed on mobile. in Africa. The mobile application space in Africa is booming, despite the turbulence of the past year. The number of installs is increasing and consumers are spending more money than ever before, showing how important mobile can be to businesses when it comes to generating revenue. As a result, mobile marketing is becoming more and more important for businesses across the continent. “
Rama Afullo, Africa Applications Manager at Google, added: “While it is clear that mobile adoption is increasing, there is still room for growth in application marketing, with many marketers in the early stages of their application maturity journey. Leveraging app promotion and engagement tools like Google’s app campaigns, utilizing analytics and measurement tools, and working with mobile measurement partners like AppsFlyer, will be essential for businesses that want develop their user base, generate customer value and continue to improve the user experience. “
Written by Adekunle Agbetiloye