India’s PhonePe Launches App Store in Challenge to Google

India’s PhonePe Launches App Store in Challenge to Google
Photo: 26.09.2023 797

PhonePe promises no fees for in-app purchases, and no listing fees for the first year.

Walmart-backed Indian fintech company PhonePe has launched its own Indus Appstore on Saturday, September 23. The company will not levy a commission on in-app purchases, compared to Google’s 15-30% takerate. The Indus Appstore will also have a dedicated “Launch Pad” platform for start-ups and new app launches to provide these new apps with better visibility as well as search optimisation. 

It will also offer several developer tools and features to address the challenges faced by most Android developers, including a dedicated round-the-clock customer support team based in India, the option to list their app in 12 Indian languages besides English and the ability to boost brand awareness via engaging videos.

“India is poised to have over 1 billion smartphone users by 2026 offering us a massive opportunity to build a new-age, localised Android app store. Despite being such a large consumer market, app developers have always been forced to work with only one app store - Google Playstore - for distributing their apps. Indus Appstore hopes to provide app developers a credible alternative to the Google Playstore - one that is more localized and offers better app discovery and consumer engagement,” 

said Akash Dongre, CPO & Co-Founder, Indus Appstore.

Indus Appstore Developer Platform’s launch comes at a time when many Indian businesses and startups have grown frustrated with Google, whose Android mobile operating system runs on over 95% of all smartphones in the country.

Local entrepreneurs have already tried to fight what they say is an exorbitant fee levied by Google Play Store. Many Indian businesses have knocked on New Delhi’s door for intervention in recent years and some banked their hope on a Paytm-led mini app store alliance.

India is a key overseas market for Google, where it has deployed over $10 billion in the past decade as the Android-maker raced to find the next great growth markets outside of the U.S. 

The company was slapped with two antitrust fines in India a year ago and was forced to make several changes to its business agreements with phonemakers and other partners.

Has anyone managed to replace Google Play?

Ekaterina Erofeeva, an expert at the BRICS Competition Centre, notes that a national app store is not a unique story. There were at least three national app stores in Russia, one of them was "Yandex.Store", which was closed in 2020, 7 years after its launch, as it was unpopular among users.

"Russian users were not eager to use "Yandex.Store", as the number of apps in Google Play was many times greater," 

says the expert.

NashStore and RuStore were launched in 2022. None of the Russian app stores became popular, as they do not offer users any comparable range of apps to the Google Store.

The key question in the case of launching any national app store (Indian, Russian or Chinese): how to make it successful and attract a huge number of users and developers? How to launch network effects so that the app becomes popular in the market.

According to Ekaterina Erofeeva, the bonuses offered by the Indus AppStore, such as zero commission for developers, round-the-clock user support, etc., are not essential for launching network effects. It will be more important if the Indian regulator helps the promotion by an administrative decision — for example, by requiring mandatory pre-installation of the Indus Store on all smartphones and banning the Google Store.

There are examples of successful Google Play analogs as well. For example, Huawei's AppGallery, launched in 2019 at the height of the trade war between the US and China. However, it's important to keep in mind that by then, Chinese apps already held a large market share in the country. 

"Chinese super-apps (WeChat, AliPay) are able to fulfill a large range of needs. Besides, Huawei is one of the largest smartphone manufacturers, so the company effortlessly replaced Google Play with AppGallery, and the transition was seamless for local users," 

says Ekaterina Erofeeva.

For PhonePe, the app store is the latest in a series of push from the fintech startup as it expands into several new categories. The startup, valued at $12 billion, launched an e-commerce app this year and last month unveiled Share.Market, an app that allows users to open their trading accounts and invest in stocks, mutual funds and ETFs. 

Source: Hindu Business Line, TechCrunch

digital markets  India 

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