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Russian App Market Is On Fire

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Quick: what are the largest 5 app markets in the world? The top 3 are easy: China, India and the U.S. Did you pick Brazil for number 4? Pretty Good!  But how about 5th? Germany? France? Spain? Nope. The 5th largest app market in the world, with over 84 million mobile users, is Russia

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From 2016 to 2017, Russia saw the largest market share growth year over year in the world, with India’s growth coming in a close second.  This is despite still having a medium level of adoption: according to Newzoo’s 2017 Global Mobile Market Report, smartphone penetration for the population of Russia was around 54.7%, up from 45% in both 2016 and 2015. Russia’s large smartphone market potential, tech-enabled environment (that includes developers, engineers, and IT specialists), fairly low user acquisition costs, affordable connectivity, and low cost of smartphones makes Russia’s emerging app market a shining opportunity for app publishers and owners to reach new audiences in 2018.

Russia’s emerging app market is dominated primarily by Android Operating Systems. Google Play provides over three times as many downloads as the iOS App Store in Russia, though in 2018, the U.S., Russia, and Turkey all experienced significant growth of iOS downloads. While the market continues to be dominated by Android devices, the local Russian app store Yandex.Store  is the country’s largest alternative to the Google Play and Apple App Stores and it comes pre-installed on most Russian smartphones.

Social networks and gaming apps have been the largest drivers of app market growth in Russia. The country was top-ranked for the number of game downloads in Europe, with more than 1.6 billion downloads in 2016 alone, and Russia is considered the 11th largest gaming marketplaces in the world. In 2015, games accounted for over 50% of all app downloads in Russia and generated around 75% of combined iOS and Google Play revenue.

Russia’s enthusiasm for and love of gaming apps has attracted many foreign gaming app publishers, and the strong performance of international gaming app publishers indicates a promising opportunity for international expansion into Russia’s emerging market. Marketers will especially enjoy Russia’s low cost-per-install rates, ranking in at almost half the cost-per-install when compared to the USA.

Russia’s top-grossing gaming apps consist mainly of strategy and role-playing games, and gaming apps continue to drive the most downloads and revenue. It’s estimated that 116 mobile games were released in 2016 alone, 40% of which were offered by foreign publishers. Many gaming apps are published by non-Russian mobile game publishers, and their high performance indicates a large opportunity for growth. Top gaming apps for 2018 include Helix Jump, Kick the Buddy, Rise up, and many, many others.

Despite its attractiveness, Russia’s market presents many challenges for new entrants. Here are some key tactics to help increase the odds of success.

Localize Apps

Most app developers, publishers, and advertisers understand that “localizing” an app is critical to its performance in the Russian app market, and many brands believe that appealing to the locals, i.e. Russians, is the key to success in Russia’s emerging app market. Offering culturally-appropriate content written in Russian can be a great way to begin to localize an app that will be served to the Russian app market. Publishers and developers might even expand away from the Google Play and Apple App store and explore other local alternatives that will appeal to the Russian audience.

Expand into Alternative App Stores

Expanding into other app stores can be helpful for publishers who are interested in gaining new audiences and reaching beyond the Google Play and Apple App store. Yandex, Russia’s search engine, created an app store called Yandex.Store with over 120,000 mobile apps available for download. Yandex offers more visibility for new apps than other app stores, which helps these new apps extend their reach. Yandex.Store comes preinstalled on many low-cost, affordable devices in Russia, which makes user acquisition even smoother for app brands.

The second largest alternative app store is GetUpps!, an app storefront offering over 50,000 apps for download. Utilizing secondary app stores can increase an app’s visibility and improve its odds of being “featured” at the top of the apps lists. These app stores are for Android devices only, driving home the need to develop and publish for Android in Russia’s emerging app market.

Aim for Games

Russia loves its games and continues to make a significant amount of in-app purchases from its most popular gaming apps. The most popular gaming apps fall under the “Strategy” category, and games that incorporate social sharing, as well as in-app purchases, have shown considerable potential for continued market growth.

Extend Reach

While Russia’s app market is still considered to be emerging, connectivity and smartphone devices are becoming more and more affordable for Russian users, and 3G and 4G services are being offered to smaller, more rural areas that previously were not able to be reached. This provides a significant opportunity for app owners and publishers to target these users, reach new audiences, and monetize the substantial opportunity that the Russian app market provides.

Consider New Revenue Models

App publishers can take advantage of the large opportunity presented by Russia’s current market by trying new ways to drive revenue that now exist in more mature markets.  For example, Russia does not yet have a single dominant service-based portal app like WeChat in China. Certain types of apps – social, messaging, maps, as well as others, can add value for their audiences by providing access to a variety of services while the app is used. Third-party monetization techniques do not come at the expense of the classic app monetization models – third-party monetization can be used in tandem with traditional monetization techniques.

As with any market with a unique language, culture, and economy, there is no single formula that will lead to success in Russia.  But hopefully, these general guidelines will help you develop your own specific approach. Regardless of your strategy, if you are an app publisher or marketer, and you are not yet in Russia, you should consider getting started.  The timing could not be better!