Data & Research

China now second largest App Store, but monetisation challenging says Distimo

Only 1% of Chinese downloads are paid apps

China now second largest App Store, but monetisation challenging says Distimo
It's a phrase all Americans are well aware of: the Chinese are coming.

The latest report for metrics outfit Distimo, which takes a detailed look at the state of play in major Asian territories, claims China is now the second largest market for Apple's App Store, behind the US.

Indeed, Distimo's assertion that the same types of apps perform well in China as those that sit at the top of the rankings in the US should offer developers some hope in a growing opportunity.

Market maturity

The appetite for apps isn't just limited to China, however.

Also of note is South Korea, which Distimo reports has a download volume larger than both Germany and France and comparable to China and Japan, despite having a smaller population than all four.



But while tackling the Asian market might seem easy as a result – Distimo noting that developers only need to localise their titles to make them suitable for release – it's not yet reached financial maturity.

Monetisation matters

Paid apps, for instance, make up only a small portion of downloads across the region. The highest ratio of paid apps to free apps is in enjoyed in Japan, where they make up 6.05 percent of the top 300 apps on the market.

The percentage of paid apps is shown in white and average paid in black.



As a result, free releases are the dominant force, but those equipped with in-app purchases (IAP) again are struggling to take hold.

In China, for instance, apps with IAPs generate 34 percent of the revenue from the top 200 apps.



"The total number of available applications that feature in-app purchase does not differ much from the United States," Distimo concludes.

"This means that aside from low revenue from one-off fees, developers can also not yet easily monetise by including in-app purchases in Asia. However, this can change quickly, as evidenced by what occurred in the United States over the course of the past year."

Distimo notes that, in June 2010, apps with IAPs made 39 percent of revenue – a figure that had jumped to 68 percent less than a year later.

You can download the report in full from Distimo's website.

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.