The State of App Marketing in India 2024

Optimism is in the air. As we move through 2024 and edge into 2025, the Indian app market is hitting its full stride—backed by resilience and primed for growth. Last year, the Indian app ecosystem really flexed its muscles, boasting a projected GDP growth of 6.3%. It’s clear we’ve got a unique and adaptable market running on all cylinders.

The market is evolving as more mobile users enter the middle class, despite a modest annual growth of 1% in mobile user base according to a 2023 IDC report. Our user growth numbers largely reflected this, as Android app installs also nudged up by just 1%. But these numbers hide a steep rise in app usage: Users are online way more than before, thanks to the steep drop in mobile data costs. Findings from Goldman Sachs show a whopping 20x increase in mobile data usage over the last five years—and it doesn’t look like it’s slowing down.

Notably, Apple’s market share in India rose to 6.4%, contributing to a surge in iOS app installs, a trend that is expected to continue into late 2024 and 2025, especially in sectors like Finance, Gaming, and Travel. Marketers are responding to these changes by boosting engagement strategies and ad expenditures.

Android advertising spending increased from $76 million in January 2020 to $159 million by January 2024, a growth of 109%. iOS advertising also saw a substantial rise, growing from $5.4 million to $12 million over the same period, a 55% increase.

Looking ahead to late 2024 and 2025, the market’s bounceback promises to yield quite a few opportunities, particularly in accessing untapped rural markets, trying innovative approaches like creative optimization and wading into emerging platforms such as CTV. Stepping up to these opportunities could be the key to shifting from business as usual to finding exponential success.

Domestic apps remain dominant but experienced a slight dip this year. Indian apps now account for 46% of the top 200, down from 52%, totaling 92 apps. 

China still holds second place, though its share has continued to fall, now at 11.5%, a steep drop from its highs of 43% in 2018. 

Israeli apps continue to eat into China’s slice, with a share of 7.5%, reflecting similar increases from last year. 

Meanwhile, US-based apps also continued their downward trend, now representing just 1.5% of the top 200, with just three apps remaining.

Out of the total 3.4 billion NOIs measured, the top 10 states dominate India’s marketing landscape, accounting for over 70% of the nation’s NOIs.

This year, Maharashtra surprisingly widened its lead over other Indian states, and now commands a 16.1% share of non-organic installs (NOI) in India, up from 13.2% last year. 

Despite being the most populous state, Uttar Pradesh saw a significant jump in NOI from 12% to 18%. 

Different states show varying receptiveness across categories. Uttar Pradesh excels in the Education sector, holding a 17.4% share of NOI, and leads in Shopping as well. 

Maharashtra tops the charts in Finance and Food & Drink with commanding NOI shares of 22.6% and 25.8%, respectively.

India’s ten largest metropolitan economies remain dominant contributors to the nation’s NOI, collectively accounting for over 25% of the total share this year. 

Delhi, however, has dropped to second place, contributing 5.1% to the NOI, while Mumbai surged to the top with a significant increase to 6.6%—nearly double its contribution last year. As the financial heart of the country, Mumbai led in both the Finance and Food & Drink sectors, accounting for 13.17% and 15.7% of their respective categories. Bangalore, securing third place, led the Travel category with 5.94% of NOI.

Nevertheless, Tier 2 and Tier 3 cities remain critical engines of growth, driven in part by the rise of ‘vernacular apps’ catering to various Indian languages beyond English and Hindi. Cities such as Pune, Jaipur, Patna, Lucknow, Surat, Indore, Ludhiana, Khurda, Nagpur, Bhopal, and Coimbatore have particularly dominated the NOI volumes

These apps are pivotal in leveraging the digital surge in these cities, enabling businesses to connect with a burgeoning, digitally savvy population. This trend is set to drive a new wave of user acquisition and app installations.

Despite efforts to broaden their reach, marketers find that the country’s leading regions continue to be the primary revenue generators. The top 10 states command an impressive 78.5% of all app-related revenue, showcasing an even greater concentration than NOI. 

Within this top tier, revenue distribution shows a more balanced picture, with healthy competition and more mature user bases among these key markets. Maharashtra, Uttar Pradesh, and Delhi each contribute roughly 10% to the overall revenue, collectively accounting for about 30% of the national total. 

The urban-rural divide also remains stark, with the top 10 cities claiming 36% of the total revenue. Delhi leads this urban pack, contributing a significant 7.4% to the national app revenue. This concentration in major urban centers highlights both the success of targeted marketing in these areas and the ongoing challenge of penetrating smaller cities and rural markets.

The Indian mobile app market is back on a robust growth trajectory, particularly on the iOS platform. While Android app installs edged up by a mere 1% over the past year, iOS app user growth soared by an impressive 24%. 

This surge is closely tied to India’s growing significance in Apple’s global strategy, with iPhone sales nearing $10 billion, driven by record-breaking quarterly revenues. This upward trend continued into the first quarter, with a remarkable 39% year-over-year increase in iOS app usage.

Interestingly, all of Android’s growth occurred in the latter half of 2023, whereas iOS demonstrated consistent expansion year-round. Costs per install dropped 35% year over year in 2023, and we observe this trend continuing in Q1 of 2024. 

The sector-specific performance was varied: Travel apps saw their user growth more than double, while the Entertainment sector experienced a 41% decline on Android. Growth in the Finance sector, meanwhile, continues to accelerate, registering a 46% increase on Android and 38% on iOS.

In 2023, NOI on the Android platform experienced a steady 4% year-over-year increase, with an additional 4% rise in the first quarter of 2024. However, the standout performer was iOS, which saw an astonishing 77% growth in NOI, driven by a remarkable 166% surge in the latter half of the year. This momentum intensified in the first quarter of 2024, with NOI on iOS skyrocketing by an incredible 218% year over year. A key factor behind this surge on the iOS side was Apple’s impressive 40% increase in iPhone sales for the second consecutive year in FY23

Sector-specific growth in 2023 presented a mixed landscape, but iOS consistently outshone on all fronts. As in years past, Finance spearheaded category growth, with a robust 72% increase on Android and a record-breaking 319% surge on iOS. The Gaming sector also saw notable gains, with a 21% rise on Android and an energetic 157% leap on iOS. It seems rather obvious that marketers in the Finance and Gaming verticals might want to focus more on growing their iOS user base.

Additionally, the Shopping category enjoyed solid 13% growth. Not all sectors fared as well. The Entertainment and Food & Drink categories faced setbacks, with declines of 37% and 7% in NOI on the Android platform, respectively—even as CPI declined 30% YoY in Entertainment. Sector performance continues to remain dynamic across platforms.

The Indian app market is experiencing strong revenue growth, particularly in Travel and Finance, driven largely by iOS in-app purchases (IAPs). This expansion indicates that marketers in these sectors should target iOS users, who are more likely to engage and spend.

Indian consumers are increasingly willing to spend on in-app purchases, creating a robust market for both major platforms. In-app purchase (IAP) growth is on the rise across platforms. Android’s IAP growth increased by 5%, indicating steady user engagement.

Marketers in Travel and Finance should note the growing influence of iOS in India. The iOS platform has a fast-growing, spend-ready user base, making it crucial for reaching India’s affluent, tech-savvy consumers.

iOS saw a 40% rise in IAPs, reflecting its rapidly growing user base. This trend continued into Q1 2024, with Android achieving a 15% year-over-year increase in IAP growth, while iOS saw a 68% increase.

A tourism boom in India is truly fueling some impressive numbers. In 2023, in-app purchases (IAPs) on travel apps soared by 37%, with iOS leading the charge at a 56% increase. 

According to travel industry expert Skift, outbound travel from India more than doubled in 2023 compared with 2019, showing a 110% jump. Finance apps are also on a hot streak, with a 31% increase on Android and a stunning doubling on iOS last year.

However, not all sectors are enjoying the same success. Gaming saw a notable dip, with Android IAPs tumbling down by 56% year over year. Shopping and Food & Drink apps didn’t see much action either, mostly flatlining on the Android platform. 

Finally, Entertainment apps had a tough time as well, with a 23% drop in Android IAPs, though iOS did see a 51% uptick.

Retention rates across the board have been slipping since 2022, and as we head into 2024, it’s clear we’re facing a trend that demands  attention. The drop is even more stark on the iOS platform, traditionally a stronghold for solid retention metrics, which now shows significant weakening.

To tackle these challenges, a fresh take on the onboarding experience could make all the difference. The goal? To immediately capture users’ interest from the moment they first open the app. Another strategic move is to tweak promotional incentives, ensuring users engage more deeply with the app before they can score any initial rewards. 

This could help mitigate app tourism and the resulting fast fade-off seen after Day 1. By sharpening these aspects of user interaction, marketers have a real shot at patching up the retention leaks and building a more robust engagement structure that lasts.

Over the past couple of years, we’ve noticed a bit of a slide in the 7-day and 14-day retention rates for overall app installs. 

Retention rates, which peaked at 8% on Day 7 of January 2022, have steadily declined to 7% by October 2023. Although this might appear as a small drop, considering the ongoing downward trend, it’s crucial to address this continuous decline.

This downturn might tie into an uptick in non-organic installs we observed in the latter half of 2023, but is concerning nonetheless. 

Interestingly, retention rates for these non-organic installs by day 7 and day 14 also saw slight decreases, falling from 7.3% (day 7) and 4.85% (day 14 )in January to 7.14% and 4.77% in October, respectively.

What’s more striking is that Day 1 retention rates took a sharper dive—from 22.71% at the start of 2022 to just 18.87% by January 2024. For app marketers, this is a clear signal to rethink and optimize that initial user experience to boost Day 1 retention. 

This is a crucial period to grab and keep user interest—and right now, it looks like there’s room for improvement.  As observed in previous years, incentives aimed at attracting users can result in superficial installs, with apps being discarded soon after rewards are claimed. 

So it is imperative that app marketers focus considerably on re-engagement campaigns to prevent user inactivity and eventual uninstall. Additionally, limited device storage has often been seen as a reason for users to delete newer apps to make room.

As more people download mobile apps to merely try them out, it’s standard to see uninstall rates climb as well. But the uptick, especially noticeable in the second half of the year, highlights a real concern about the speed at which users are ditching apps. 

For those in app marketing, this trend across various sectors really puts the spotlight on the urgent need for creative re-engagement strategies. These efforts are key to keeping users interested and improving the overall app experience.

The decrease in retention is driving uninstalls. We saw in 2023 a 5% increase in uninstalls on Android compared with the previous year, which appears to have been driven by a combination of higher initial installation rates and lower overall retention. 

Interestingly, a significant portion of these uninstalls occurred in the latter half of the year. On a more positive note, the first quarter of this year has shown a promising downtrend, with uninstalls decreasing by about 4%. If advertisers don’t plan ahead, they stand a very strong possibility to increased uninstall rates

The Finance sector continues to impress, with significantly fewer users hitting the uninstall button. Uninstalls have plummeted by 17% year over year in 2023, and the momentum didn’t stop there—a further 27% drop was recorded in the first quarter alone. 

Coupled with robust installation rates, it’s clear that Indian consumers are increasingly turning to fintech apps. Meanwhile, Shopping apps have largely held steady, experiencing a small 2% decline in 2023, while posting a sharper 21% drop in early 2024.

Entertainment apps, however, saw the steepest climb in uninstalls, soaring by 38% YoY in 2023, though there was a noticeable 18% reduction in the first quarter. Both the Food & Drink and Gaming sectors also felt the pinch, with uninstall rates surging by 27% and 21% respectively last year. 

App marketers are at a critical juncture and will need to innovate their re-engagement strategies to reclaim their audience.

Recommendation: Do A/B testing to identify the ideal ratio between the number of re-engagements and uninstalls.

The Indian app market faces significant challenges, with retention rates dropping by Day 7 and day 14 and uninstall rates increasing. In this environment, remarketing is crucial for sustaining user engagement and growth.

In 2023, effective remarketing strategies led to substantial improvements across various app categories. The Finance sector on Android saw a 39% increase in remarketing, despite a 19% decline in its share of total installs. Shopping apps experienced a 43% rise in remarketing conversions on Android and 145% on iOS, boosting their install share by 8%. 

Food & Drink on Android nearly quadrupled its remarketing activities, increasing its install share by 44%. Conversely, Entertainment saw a 19% drop in remarketing on Android, though its share still grew by 7%.

With AI and machine learning reshaping campaign management, advertisers must focus on ad copy and creatives to stand out. AI helps analyze ad elements, enabling the refinement of content for maximum engagement and impact.

Remarketing has always played a key role in boosting revenue—or an app’s share of paying users. On Android, the share of paying users dipped slightly from 2.71% in 2022 to 2.3% in 2023, stabilizing at 2.35% in early 2024. 

Yet, remarketed Android users boasted a significantly higher share at 3.1%, compared with just 1.66% for those not retargeted.

iOS conversely saw a huge jump in proportion of paying users, with the share of paying users leaping from 3.43% in 2022 to 5.17% in 2023. The difference between remarketed (5.33%) and non-remarketed users (5.04%) was narrower, but the trend in Q1 2024 suggests growing benefits from remarketing. 

These numbers further validate the value of remarketing in enhancing user monetization and retention strategies.

In the latter half of 2023 and into Q1 2024, India’s finance app sector saw explosive growth again, particularly on iOS, with a staggering 38% year-over-year increase on iOS. Android mirrored this trend at 46%, though some of the growth was driven by remarketing efforts, which saw a 56% YoY surge in conversions.

Surprisingly, the boom wasn’t led by digital wallets and payment apps. Instead, other financial services sub-verticals, including investment and personal loan apps, took center stage. The highest volume of installs clustered around Q3 and Q4 of 2023, extending into Q1 2024. 

This spike likely resulted from a combination of aggressive user acquisition efforts and the traditional seasonality of higher installs in the latter part of the year.

The momentum was particularly noteworthy for Financial Service, Investment and Personal Loan apps. These categories amassed approximately half of their total installs from the past nine quarters in just the latest three quarters ending Q1 2024. 

In contrast, digital wallet and payment app installs showed a more evenly distributed pattern over time.

The Food & Drink category was largely driven this year by aggressive remarketing efforts. While Android saw a modest year-over-year user growth of 5%, iOS platforms outpaced this with a robust 24% increase. 

However, Q1 2024 marked a dramatic turnaround for Android, showcasing a 72% surge in user growth.

This growth spike is tied to an incredible 364% increase in remarketing conversions in 2023, which even picked up pace to 370% in Q1 of 2024. These numbers really speak to how well-targeted remarketing strategies can pull in users. 

However, this aggressive approach did come at the expense of NOI, which dropped by 63% in 2023 as a share of installs from remarketing.

It’s interesting to note that the growth wasn’t uniform across all segments. The Food, Grocery, and Quick Service Restaurant (QSR) segment, which was at the forefront in 2023 (12% YoY rise), didn’t keep up the pace in early 2024 (5% YoY increase in Q1 2024) compared with other segments.

In India’s fast-paced economy, marketers need to stay ahead. Creative optimization and Connected TV (CTV) are transforming how brands connect with audiences digitally.

Using AI, creative optimization refines ad content—from user-generated snippets to animations—highlighting what resonates with viewers, helping brands craft effective campaigns.

CTV’s rapid rise, driven by more viewers on mobile and CTV platforms, is revolutionizing digital marketing. Projections show 100M households and $500M in CTV ad investments by 2027.

CTV offers a goldmine for targeted, compelling ads. Together, creative optimization and CTV ensure ads not only reach audiences but also engage them, boosting ROI.

Creative optimization is crucial for gaming and non-gaming apps, each benefiting from tailored ad strategies. Marketers must align their creatives with what works best for each channel and context using AI. 

In gaming, especially hyper-casual games, the focus is on maximizing installs per mille (IPM). Data shows that ads excluding user-generated content (UGC) achieve an IPM of 16.33, compared to 5.77 for those including UGC. Animated ads also perform well, with an IPM of 16.52, indicating gaming ads should emphasize direct gameplay visuals and animations. Additionally, gaming video ads longer than 15 seconds show a 30% boost in 30-day retention on social platforms.

For non-gaming apps, UGC performs better, particularly on social media, with an IPM of 2.36 versus 1.7 for non-UGC ads. This trend highlights the effectiveness of authentic content in sectors like retail, education, and lifestyle, encouraging these apps to use real-life scenes and personal testimonials.

Overall, setting realistic expectations based on market verticals and understanding the nuances between IPM and retention can help optimize return on ad spend.

India’s app-driven economy presents a major opportunity, with e-commerce sales projected to reach $325 billion by 2030. Traditional app marketing tactics are declining in effectiveness, prompting the rise of commerce media. This new approach goes beyond traditional advertising, creating a strong link between content and commerce, allowing brands to strategically place targeted messages on platforms where consumers are engaged.

Commerce media empowers both brands and platforms by leveraging purchase intent data to create targeted ad opportunities, driving sales and conversions. For example, a user browsing an e-commerce app sees an ad for shoes they were considering. The brand leverages platform data within a privacy-compliant environment, ensuring relevant ads reach the right audience.

PubMatic’s report indicates that global commerce media ad spend, currently at $128 billion, is projected to grow to $220 billion by 2027. Data Collaboration Platforms (DCPs) and privacy-enhancing technologies enable advertisers to use insights from user data to deliver hyper-targeted product recommendations.

Commerce media fosters trust by showcasing products within trusted apps, reducing purchase hesitancy and complying with privacy regulations. For Indian advertisers, embracing commerce media is a strategic imperative, merging content and commerce to succeed in the booming digital marketplace.