Indians Are Spending More on Apps, Not Just Downloading Them
For years, India has been known as one of the world's largest markets for app downloads, but generating revenue from that massive user base has been difficult. That picture, however, is beginning to change. Indian consumers are now spending significantly more on artificial intelligence (AI), entertainment and other premium apps than they did before.
According to a new report by market research firm Sensor Tower, India's mobile app market generated a record $345 million in revenue in the second quarter of this year, up 35 percent from the same period last year.
Key Drivers of Revenue
Sensor Tower said generative AI, streaming and productivity apps contributed more to this revenue growth than gaming. Indian consumers are increasingly willing to pay for digital subscriptions and premium services. Over the past three and a half years, revenue per app download in India has more than doubled. However, the number of app downloads per quarter has remained stuck at around 6.3 billion since 2023.
According to Sensor Tower analyst Eve Chen, the growing use of digital payment systems in India, particularly UPI and digital wallets, has made in-app purchases much easier.
India in the Global Context
India's growth is particularly notable compared with other countries. Among the world's leading app markets, India recorded the fastest revenue growth in the second quarter. While app revenue increased by 30 percent in Mexico and 25 percent in Turkey, revenue from apps in the United States declined by 3 percent.
India, however, still lags far behind mature markets such as the United States, South Korea and Japan. In the United States, each app download generates an average of $4.60 in revenue, while the figure remains very small in India. Nevertheless, the upward trend in revenue points to significant long-term potential.
Generative AI and Other Apps Take the Lead
Generative AI has emerged as the fastest-growing app category in India in terms of revenue. During the second quarter, apps such as ChatGPT and Claude accounted for about 83 percent of the total revenue generated by India's AI app sector.
According to data from another company, Appfigures, ChatGPT generates around $60,000 in revenue per day in India and was downloaded approximately 1.8 million times over the past month. Revenue from non-gaming apps has also increased significantly.
During the first half of this year, non-gaming apps accounted for 68 percent of India's total mobile app revenue. Consumer spending has also increased on platforms such as Google One, Amazon Prime Video, Sony LIV and JioHotstar. Meanwhile, although gaming revenue has declined globally, gaming revenue in India increased by 3.7 percent during the quarter.
//DBTech/BMT/OR//
