Consumer Tech, Startups
The next big thing in India’s consumer tech? A Desi App store.
Google and Apple Play store have a duopoly. Indian government is unhappy with Big Tech. Indian startups are unhappy with Big Tech’s predatory practices. There is a ‘power’ vaccuum waiting to be filled
Did you know that India is the world’s largest market in terms of app downloads?
Currently there is a duopoly on the app-marketplace with Google’s Play Store and Apple Store taking up the biggest chunks.
Why is that a problem?
Google and Apple charges App developers a whopping 15–30% commission on all in-app purchases!
Though these fees only apply for digital services (not applicable for likes of Ola & Uber), pureplay digital apps in the Real money gaming, OTT streaming, matrimonial and dating space have been facing the biggest grunt of the high commissions.
Indian startup founders and app developers have been at loggerheads with US giants for restriction on choice of payments because of payment gateway issues, high commission rates on in-app purchases as well as random changes in policies and updates resulting in ‘delisting’ from the app store which affects the businesses gravely! For example, Dream11 was fighting for over a decade to be listed on Google Play store because particular rules and compliances.
All this brings forward a need for a vibrant local app store.
But this is easier said than done, because onboarding thousands of developers and millions of new customers apart from strategic partnerships with smartphone giants is no easy task. Which means, whichever player wants to disrupt the market needs to have big pockets- preferably backed by a US non-tech giant (who is willing to go against bigtech).
Enter PhonePe and Walmart.
Phonepe, which was acquired by Flipkart, has recently launched the Indus App store
- No app listing fees for developers for the first year & no commissions for in-app payments
- Flexibility to use third-party payment gateways
- Video led discovery of apps
- All apps which are legal in India can be listed!
- Available in 12 regional languages
What do I foresee as Indus App store’s next big challenges to surmount?
1. Partnerships with Smartphone manufacturers:
Unless Indus Appstore has succesful partnerships with atleast 1–2 of the top 10–20 smartphone manufacturing companies by end of 2024, distribution will be severely affected.
Most of the distribution of app store and usage stems form pre-installed applications in smartphones.
2. Incentives from Government in the form of a Public-Private partnership:
Recent few months, Competition Commission Of India (CCI) has been at loggerheads against bigtech (notably Google, Apple and Meta) over a lot of predatory practices- including duopolies, high commissions, etc. The government would definitely appreciate home-grown competition and incetivise it as well. Having stronger policies by 2024–2025 will definitely accelerate adoption and act as win-win for all parties
PS: Btw, PhonePe had originally acquired Indus Appstore’s parent company in May 2022 for $90 million
