Do app stores have a sustainable business model? Experts confer at Indus Appstore launch

India's tech industry has had a remarkable journey, transforming into a global hub for technology innovation and entrepreneurship. The industry continues to shape the future on a global scale as it pioneers IT services and emerges as a leading provider of app development and digital solutions.

The recent unveiling of PhonePe’s Indus Appstore is a significant achievement in the country's digital journey.

An expert panel discussed the intricacies of sustainable app store business models during the launch, offering valuable insight into the future of India's digital landscape. The discussion, moderated by Sajith Sivanandan, head of Disney+ Hotstar, aimed to provide insights into strategies that will shape India's digital landscape going forward.

The panel included Virendra Gupta, Founder of VerSe Innovation; Neeraj Roy, Founder and CEO of Hungama; Harsh Jain, Co-founder and CEO of Dream11, and Murugavel Janakiraman, CEO of BharatMatrimony.

Perspectives from key players

Sivanandan kicked off the discussion by contextualising it within the broader landscape of app stores. He spoke about the sheer size of the global app market, with over 300 app stores collectively generating revenues of approximately $421 billion. However, India's app revenue currently stands at $3 billion, which indicates the tremendous potential for the country's tech sector.

He raised a fundamental question concerning the dominance of a select few app stores: What revenue models lead to the sustainability of apps for businesses?

Janakiraman spoke about the pivotal role that app stores play in serving as primary distribution channels for service providers. He stressed the importance of revenue diversification, highlighting subscription-based models, in-app purchases, and advertising as means of monetising a mobile application.

“For businesses like ours, leveraging a mix of revenue streams is imperative for long-term sustainability,” he said.

Sivanandan said the Indus Appstore plays a vital role in meeting the needs of the Indian market. “The launch signifies a monumental shift in India's digital ecosystem, offering a platform tailored to the diverse preferences of Indian users and developers.”

According to Janakiraman, strategic partnerships can have a transformative impact on the growth of ecosystems. His remarks highlighted the interconnected nature of the app ecosystem, emphasising the importance of collaboration and synergy among stakeholders.

Gupta, however, placed a lot of importance on the necessity of inclusiveness and localisation in the development of apps in India. His remarks focused on the importance of catering to India's diverse linguistic and cultural landscape, laying the groundwork for further exploration of sustainable business practices.

Roy provided insights into the evolution of the entertainment industry in the digital age. He stressed the importance of content curation and personalised recommendations to drive app monetisation.

“In an era defined by content abundance, relevance is paramount. By harnessing data analytics and AI-driven insights, app stores can deliver tailored experiences that resonate with users,” he said.

Like Gupta, Roy also spoke about the importance of user experience in retaining and engaging users. According to him, “humility and active listening are paramount”, emphasising the need for developers to prioritise user feedback and iterate continuously on their products.

Jain emphasised the importance of empowerment in innovation. “Supporting and empowering developers is essential for fostering a thriving ecosystem,” he said, calling for greater collaboration and support between developers. He also stressed the importance of fostering indigenous app ecosystems of regulatory support, citing the government's decision to abolish the Merchant Discount Rate (MDR) as a precedent for fostering innovation and entrepreneurship. 

The experts also discussed the importance of safeguarding data, cultivating user confidence, and pushing innovation boundaries to address issues such as fraud head-on and preserve the platform's integrity. 

Several key themes emerged during the discussion, including transparency and openness, the value of collaboration, and the potential of the Indus App Store in enhancing innovation and economic growth.

Top 5 highlights

1. To resonate with India's diverse user base, app developers must embrace linguistic and cultural diversity. Engaging and retaining users requires localisation and user-centric design.

2. The design of a compelling app requires a user-centred approach that prioritises user feedback and preferences. Developers must adopt an iterative approach by continuously refining products based on user insights and preferences.

3. Providing developers with necessary tools, resources, and support will foster innovation and entrepreneurship within the ecosystem. Developers need to be empowered to create high-quality apps that meet the unique needs of Indian users.

4. Strategic collaborations among ecosystem stakeholders drive growth and create value for all stakeholders. Partnerships allow developers to leverage each other's strengths and resources, contributing to a more vibrant and resilient ecosystem.

5. Agile and adaptable capabilities are essential for success in a rapidly evolving environment. Developers must stay abreast of emerging trends and technologies to meet changing user needs and preferences.

In closing remarks, Sivanandan said that alongside the journey that began with the launch of the Indus Appstore, “let us remember that our success lies in our ability to listen, adapt, and collaborate”.

“By staying true to our values and prioritising the needs of our users and developers, we can create a platform that drives positive change and fosters innovation,” he said.

At the end of the event, Sameer Nigam, the CEO of PhonePe, thanked participants for their support and outlined future steps, including app listing and language translation initiatives, which reinforce PhonePe's commitment to community engagement and inclusion.

Nigam offered insights into the future trajectory of PhonePe's ecosystem and acknowledged the importance of community support in PhonePe's success. Among the key announcements was the offering of free access to any payment gateway to all apps on the Indus Appstore, demonstrating the platform's commitment to flexibility and developer choice.

The CEO said payments should be viewed as a distinct business entity, and revenue models should be based on advertising solutions and a-la-carte services for developers. He added that the platform's filtering process was transparent, and that he was committed to addressing issues surrounding advertising transparency and download attribution.