Asian Beat #9: Trends in Emerging App Markets: The Philippines

Welcome back to the ninth instalment of our Asian Beat series! This time we focus on the smartphone madness of the Philippines.Asia’s part in mobile’s
takeover isn’t restricted to providing the world with smartphones, tablets, and apps. Asian countries have evolved to become major consumer markets with
corresponding app developer communities to cater to their needs. Flurry reported 77% growth in the continent’s mobile app
economy, based on app sessions; given the already large user base, this number is rather impressive. Countries like India, where the so-called ‘mCommerce
revolution’ has fueled mobile app usage that outpaces that of the rest of the world, or China, which is the biggest market for iOS downloads and
smartphones, have established Asia as a major player in the mobile sphere

The fact that the continent’s top 30 countries simultaneously show sustained growth does not mean that Asia should be understood as an homogenous market.
Each country is unique, and to be able to understand Asia as a whole, we have to understand its individual component parts. AppLift has already delved into
the mobile games markets in Malaysia,Thailand, and Vietnam, among others; this time, let’s put the performance
spotlight on the mobile apps market in Philippines. The reasons are simple: the Philippines is the third largest smartphone market in Southeast Asia, and the fastest growing app market,
according to insights from InMobi; a comparatively low
smartphone penetration (Ericsson predicts 40% by end of 2015) combined with high install growth (driven by low cost devices and cheap data plans), results
in fairly low CPIs. Add to that the fact that app localization is almost unnecessary, as 57% of the population speaks English (the second official language
of the country), and 40% of mobile internet users prefer it over Filipino. An emerging market with an eager audience like this can be a gold mine for app

The smartphone craze has brought significant changes in Filipinos’ mobile behaviors. Take this as an example: When the Philippines’ mobile market took off,
SMS was a genuine revolution: At its highest point, around two billion SMS messages were sent daily. Social networks have had a major impact on the way
filipinos interact; on average, they spend 4 hours per day on social media, which comes up to roughly 42% of total screen time. However, despite slowing
down considerably, the country reportedly still generates the largest SMS volume in the world.

To explore how filipinos put their smartphones to use, we turned to our app store intelligence platform Priori Data PRO, where we looked at download and
revenue data from the App Store, and from Google Play. We drew some conclusions from our analyses and worked out a few key takeaways which are listed

The Winners

As is the case in most Asian countries, the divide between Android and iOS is an economic one. 18% of the filipino population lives on $1.25 per day or
less, which explains the prevalence of more accessible Android smartphones, offered by the local “big 3” mobile companies: myphone, cherry mobile and
StarMobile (smartphones ranging between $50-$250).On the Google Play store, Photography apps were downloaded 4.5 million times per month; ‘Tools’ came
close to 4 million downloads, followed by ‘Personalization’ (3 million). The top Growers are the ‘Music and Audio’, and ‘Communications’ categories, with
an average growth rate of 40%.


Category Performance Matrix for the App StoreThe picture for iOS looks very different. Here, the most popular categories are ‘Social Networking’, with over
2 million downloads per month; ‘Photo & Video’, and ‘Entertainment’ are both over the million-downloads-mark. The top growers in the App Store showed
considerably lower growth rates: ‘Social Networking’ grew at 16.5%, and ‘Food & Drink’ at 5.7%.


The Philippines’ App Store’s Top ChartsFacebook apps dominated both app stores, with Messenger topping the download rankings, and the Facebook app coming
in second. On Google Play, the third spot was claimed by Google Play Games (it has to be mentioned that this app comes preinstalled on Android devices),
followed by CleanMaster, and Skype. The App Store’s honor roll was comprised of Berlin-based smash-hit Dubsmash, YouTube, and messaging app Viber.

Breaking Down the Numbers

Forever Connected

Filipinos are notoriously active on social media, especially on Facebook, with 94% of the internet population using the social network – as a comparison,
only 54% of the US internet population does. Facebook was downloaded almost half a million times in June, a 110% increase over the previous month; the
introduction of the Facebook Lite app for Android devices (June 29), will surely have a significant impact, as the super-slim version of the app only takes
up 435 KB of storage, loads faster, and, most importantly, consumes less data – perfect for slow connections and low-end Android devices. Instant Messaging
is almost completely dominated by Messenger, getting 3x more downloads than runners-up Skype and Viber, and almost 10x more than WhatsApp, on Google Play.
The App Store shows similar behaviors, Messenger showing 390k downloads, Viber 110k, and Skype a mere 58k. Here, WhatsApp and WeChat are downloaded an
astonishing 20x less than Messenger.

First Steps Into a Sharing Economy

Ride-hailing apps have also made their way into the Philippines – the three major players being Rocket Internet’s Easy Taxi, Malaysia’s GrabTaxi, and Uber.
On the Google Play store these three apps combined were downloaded roughly 72k times in June, a 44% increase since May. On the App Store, users downloaded
these three apps 37k times, a 43% decrease since the previous month. Easy Taxi and GrabTaxi are in direct competition as cab-hailing services, a race which
GrabTaxi might be leading at the moment, getting over 14x more downloads than its direct competitor. Uber and GrabTaxi compete in the high-end-ride sector,
with their GrabCar and UberBlack services, but Uber’s advantage lies on peer-to-peer UberX. In May, the country’s transportation authority rolled out a
legal framework for ride-hailing apps like Uber to operate legally. The new regulations are a win for Uber, yet, the company still has obstacles unique to
the Philippines: Manila is among the cities with the worst traffic in the world, causing an estimated $57 million a day in losses in productivity.
Additionally, there is significantly low credit card penetration in the Philippines, which makes it even harder for filipinos to join the service, which
works with credit card billing.

Photographic memory

Photography & Video apps are extremely popular in the Philippines, especially selfie apps, like B612, photo editors like PhotoGrid and BeautyPlus, and
Photo & Video-sharing apps and networks like Instagram and Vine. The Philippines are just behind the US and India in downloads for Dubsmash, and the
popularity of Dubsmash-related apps in the charts bears proof of filipino’s fascination with the lip-syncing video app that has taken the US by storm. In
April and May, there were five Dubsmash-related applications among the ten most downloaded Entertainment Apps in the App Store.

Where Is the Market Headed?

Will iOS make inroads over time and pose a serious challenge to Android’s clear domination? Will gaming apps eventually gain traction in the market, or
will structural impediments cap their growth? Has Facebook already won the social battle? The Philippines will remain an exciting opportunity for app
publishers in the years to come, with its generation of young, eager users which will continue to dominate the market. The uncertainties are rooted in
infrastructural challenges, and socioeconomic factors: improving high-speed mobile internet coverage, ensuring widespread purchasing power that, on the one
hand, would allow a higher influx of high-end devices into the market, and on the other, it would help narrow the gap between free and paid downloads.

What do you think is the major marketing trend of the Filipino mobile market in 2015?