Business

The app economy surged in Mexico and Brazil during the last few months

In Mexico and Brazil, revenue from apps increased by 65% and 50%, respectively, according to a report by AppsFlyer

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  • Ads are responsible for between 40% and 80% of new users’ attraction;
  • Since 2014, the rate of smartphone adoption in Latin America has doubled, reaching 66% of the population.

The pandemic has accelerated the growth of the app economy, mainly in Mexico and Brazil, where revenues increased by 65% and 50%, respectively, according to AppsFlyer, a company dedicated to data analysis in the mobile industry. 

Its new report, The State of App Marketing in Latin America 2020, reveals that Mexico is the country with highest revenue growth through apps over the last months. Mobile app downloads grew 31% in Mexico during the pandemic and the categories that dominate the market are those that have an advertising budget. 

The categories of apps with the most downloads are games, services, photography, entertainment and shopping.

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According to AppsFlyer, ads are responsible for between 40% and 80% of new users’ attraction. “The chances of mobile apps being discovered organically (by user initiative and without advertising) in app stores are virtually non-existent. Investment in marketing is necessary to generate facilities, activity and purchases”, said the company in a statement.

The categories of apps with the highest rate of paid users are lifestyle, shopping, travel, education and health and fitness.

“All the indicators show that Mexico is a mature market for the growth of the economy of mobile apps. Companies already recognize the value of apps in their businesses and the population is adopting this faster channel to meet their needs,” said Guilherme Basani, Sales Executive for Mexico and Central America at AppsFlyer.

Latin America is experiencing a significant growth in the penetration of smartphones and mobile apps in recent years. Since 2014, the rate of smartphone adoption has doubled, reaching 66% of the population. On average, between 2019 and 2020, the number of app installations in the region grew 29.3%.

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Last year, 60% of mobile apps downloads came after advertising campaigns, 15% more compared to 2018 and 30% more than in 2017. In Latin America, $3.1 billion will be invested in marketing campaigns for apps, which corresponds to 6% of global advertising investment in the  segment, and will grow 122% in 2020 to reach $6.9 billion.

Chinese apps lost steam in the region. In 2018 they had 48% of the Latin American market, but in 2020 their share fell 56%. Brazilian apps stand out, with a growth of 125% in its participation across the region.

AppsFlyer’s The State of App Marketing in Latin America 2020 report analyzed 1.1 billion organic installations, 1.8 billion installations, 3,500 apps with more than a thousand non-organic installations per month and 27 million paid users. It includes the categories of gaming, banking and finance, shopping, services, travel, education, entertainment, health and lifestyle.

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Frauds still hurt ad spending

According to AppsFlyer, fraud continues to hurt ad budgets, and non-gaming apps have become more attractive to scammers. The categories that suffer the most are travel (with a 73.7% fraud rate at downloads), business (62%), financial investments (55.3%), financial services (51.4%), and music (28.9%). Half of the thefts are done through bots.