Indonesians just love their free apps: Baidu-GfK study
By Ervina Anggraini April 11, 2016
- But they’re willing to pay; app market to reach US$142mil in 2016
- An opportunity for local developers, but they must get more creative
INDONESIANS spend an average of 60 minutes per day on their apps, and tend to prefer free apps even though they take longer to install, according to the Mobile Apps Market Study on Indonesia by China Internet giant Baidu, conducted by market research firm GfK.
And almost all of them access the Internet primarily via smartphones, the study found. GfK estimates that the online population is now 64.1% of the total population. Out of the online population, 93% access the Internet via smartphones; 5% use tablets and 11% use desktops.
[There is some overlap since some may use more than one form factor].
Indeed, using apps (97%) is more common than using browsers (76%).
Despite their love for free apps, Indonesians do not mind paying for content, which Baidu Indonesia managing director Bao Jianlei described as a business opportunity, especially for local app developers.
He said the study found that the biggest revenue earner for apps was advertising, followed by paid-app purchases and in-app purchases.
The research across cities such as Jakarta, Bodetabek (Bogor, Depok, Tangerang and Bekasi), Bandung, Surabaya and Semarang, found that mobile advertising revenue in 2015 amounted to US$15 million, higher than paid-app purchases (US$3.2 million) and in-app purchases (US$2.9 million).
“The most downloaded apps are free apps, but almost all these apps were created by foreign developers,” said Bao.
“Indonesian users download these apps because they see their friends or families doing it,” he told a media briefing in Jakarta of April 7.
One reason why free apps are so popular – beyond the obvious fact that they are free – is the low credit card penetration rate amongst Indonesians, according to Bao.
This is why some operators are creating alternative avenues for Indonesian users to pay for their app purchases, such as the ‘pulse cutting system’ which was introduced last year.
The app market in the republic has been in an upswing. In 2013, it recorded US$62.1 million in revenue; by 2015 it reached US$118.2 million, according to GfK.
The market is forecast to grow to US$142.1 million this year, and reach US$197.6 million in two years.
This is being primarily driven by the Indonesian consumer habit of downloading at least one new app every month, with games being the most popular (38%), followed by chat and social media apps.
“There are many reasons why people download a certain app,” said Baidu Indonesia marketing head Iwan Setiawan.
“For a game, for instance, it is usually because it is the trend and many people are playing it. A transport app will be downloaded for its utility and function; and a social media app mostly because it is recommended by persons close to the user,” he added.
Indonesians also like online shopping, maps, navigation, and news portals apps.
Again, most such apps are owned by foreign developers, and local developers are at a disadvantage here, according to Iwan.
“Local developers have less access than foreign ones. There are many reasons, including limitations in promoting their products.
“Also, many users think local apps are less interesting. especially in terms of the user interface (UI) and user experience (UX),” he added.
Iwan said this was unfortunate, because Indonesian developers are well known for their coding ability. They need support from users as well as product promotion, he argued.
However, he also admitted that Indonesian developers need to be more creative because trends and technologies in today’s digital era change very quickly.
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