Singapore’s mobile penetration hit a high of ~158% in the first quarter of 2014, but by the third quarter of 2017, it had fallen by 10% to reach ~148%. OCBC Investment Research in its 2017 telecom report predicts a “muted outlook as space gets crowded”. With penetration rates already this high, it appears that the Singapore app economy is nearing saturation.
This could mean that growth in the app economy may stall and app makers will face a harder time cutting even. For app based businesses, this could be a big challenge. Apps will
now need to pack a bigger punch and deliver a raised standard of service to appeal to the modern and sophisticated Singapore mobile user.
App makers require critical thinking now more than ever. With ARPUs declining steadily, it is time to make your apps worthy of more than just direct revenue. It is time to look at your apps as an extension of your business, a tool for branding and a way of reinforcing trust in your customers. Only then will your business be able to truly thrive in an already saturated market.
A shift in people’s attitude towards mobile app usage is what is triggering this trend. According to an Ernst and Young survey, Singaporeans spend a whopping 3 hours and 12 minutes on smartphones every day. As much as 30% of users admit that mobile usage has negatively affected their sleep and 38% admit they spend more time on their gadgets than with their partners or friends.
Now that Singaporeans realize what overusing smartphones is doing to them, users are making a conscious effort to cut down mobile usage and develop consistent app habits. App makers that truly wish to survive in today’s saturated app economy will have to understand this shift in Singaporeans’ mindset and make apps that deliver more value in less time.
The idea is that businesses stop calculating the profitability of an app solely on the basis of the revenue it brings. That model may not be very successful in the coming time, unless you have the next Snapchat up your sleeve. Instead, use apps as a reinforcement of your core business. It needs to be understood that in the end, it’s not the app but the product that sells. So focus on building a quality product first. Uber is what it is because of the actual service they offer. The most wonderful app wouldn’t work if the cabs, drivers and services weren’t at par.
App makers will have to stop counting number of downloads and start focusing on engagement. App stores still pay importance to the number of times an app has been downloaded, but when you consider the fact that 1 in 4 people uninstall apps after just one use, that number becomes quite insignificant. Businesses will have to start keeping their
existing users and developing a loyal fanbase, as opposed to obsessing over total downloads.
The most important thing businesses will need to do is use apps to build stronger relationships with their customers and reinforce their trust. Use apps to communicate on a
personal level and become a part of user’s lives. That is the only way to survive in the already saturated Singapore app economy.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Hiral Atha is Co-founder of MoveoApps, a mobile apps development company owned by digital agency E2M. She has over 13 Years of experience in the IT industry. During that time she managed and lead many app initiatives from inception to implementation. Atha holds a bachelor's degree in information technology.