Global economic trends and the mobile application market

How do the global economic trends affect to the mobile application market? What has changed by the end of 2022? And how to ride on the wave of changes?

Before the traditional publication of the report on the mobile applications market, let's take a look at the economic situation in general and how the mobile applications market is behaving in particular.

All participants on the mobile application market can say with confidence that the era of Covid-19 and the last two years under the sign of isolation have had a positive impact on the growth and development trends of the industry. The market required urgent changes and adaptation to the prevailing conditions, which was often solved by virtualization and led to a rapid increase in the number, and what is there to hide, to an increase in the quality of mobile applications. In almost every aspect of life, and consumer needs were covered by the mobile world of apps.

But the last year has brought a lot of surprises, and we will not talk about pleasant things here. Global markets are showing strong negative dynamics, and the IMF forecast for the end of 2022 sounds like overall economic growth will slow to 2.7% in 2023. How does the mobile application market react to global trends?

In general terms, the situation in which we are now, as participants on the mobile games and applications market, can be characterized by several points:

• Too high market volatility complicates the search for development opportunities and leads to uncertain results.
• Users are more careful about their finances and time.
• Traditional industry trends no longer apply and require real-time data to get actual results.

Looking back over the past years, we can say the following:

• the number of new applications grew unevenly but showed positive dynamics in the context of 2020-2021.

• As for the Downloads indicator, they have shown rapid growth over the past three years.

But 2022 will be clearly different, both in performance and future trends.

Main trends of 2022 in the mobile app market

In the data.ai report for 2022, we can already see the first signs of a slowdown in the mobile app market:

The second quarter of 2022 saw a 1% drop in app downloads compared to the previous quarter. And user spending showed an even sharper decline. In the first half of 2022, it decreased by 3% compared to the same period last year. App downloads peaked in the first quarter of the year, which is likely to smooth out the overall decline for the year.

Let's look at the trends of the outgoing year, following which it will be possible to withstand the difficult times of the crisis and economic downturn:

• Geographic trends

Some regions and countries show completely opposite trends to global ones, for example, the average global growth rate from the second half of 2021 to the first half of 2022 was +3%. At the same time, Uzbekistan, Venezuela and a number of other countries showed that during the same period, app downloads grew by 35%.

The Middle East, Brazil, and China showed rapid growth in user spending, against the backdrop of a modest global average growth of the same +3%.

Another interesting metric is app usage time. Here the geography is as follows: Ukraine and the countries of the Middle East.

• Categories and niches of mobile apps

The current year can be called the year of the return to “normal” user behavior. Post-pandemic trends have led to an increase in the popularity of travel apps (the cancellation or easing of quarantine restrictions has affected). The popularity of apps in the Business category has slightly decreased, as many have returned to the office from the remote - this is especially noticeable in the niche of applications for online meetings. The decrease in installs in the online learning category can also be called a return to normal life, before the pandemic. Well, as the most obvious - a drop in demand for medical applications, which is not a sign of “recovery”.

The entertainment industry shows an increase in dating app installs and a decline in streaming services. And indeed, you can finally go on a date to the cinema, without masks, and with popcorn.

• Focus on application features

User acquisition work is one development channel, but retention work is one of the essential aspects of growth opportunities. That is why the emphasis on the features of the application that attract users and inspire loyalty, that is, which they return to your application for - focuses on this. These users have already installed the application; now, by developing the very features that caused the installation, you strengthen the user-app connection.

App analytics allows you to establish specific patterns: which functions, depending on the category of the application, attract users.

So in the categories “Entertainment,” “Health and Fitness,” and “Photos and Videos,” the main features that attract users are subscription and auto-renewal. For “Finance” categories, they are dynamic dashboards and referral links. For the “Shopping” one  - content and the ability to pay in the application.

Thus, by observing and analyzing market signals about changes, constantly noticing changes in the market horizon, and reacting to user behavior - how they spend their time and spend their money, you get a complete picture and taking it into account, you get growth opportunities. And competitors will show you opportunities, dangers, strengths, and weaknesses.

Mobile app market forecasts in 2023

2022 was supposed to be a year of growth and a return to “normal,” but coming to its end, we have to admit that normality turned out to be quite alarming - a supply chain crisis, a war in Ukraine, the collapse of a crypto exchange, inflation and a recession forecast. But what does this all mean for the future of the mobile app market?

ASO - a stable basis for organic growth

Text and visual optimization already serve as a long-term and stable basis for the organic growth of your app. This is a confirmed trend over the past years, and there are no prerequisites for thinking otherwise. A well-optimized app page on the store, competent work with key queries, and an update cycle will allow your app to find its users in the turbulent 2023.

Emphasis on the following aspects:

• text optimization of an app metadata 
• work with visual elements to maintain and increase the conversion rate
• localization of your application and expansion of geography
• keep track of new app stores and use them for good.

Paid UA & ASO

The combination of organic and paid user acquisition remains the key to success. But not in vain, we mentioned ASO optimization first, since paid attraction will show its best side only with correctly performed optimization (which is constantly updated taking into account trends and changes).

Expansion of geography and shift of emphasis

The statistics shown above tell us about the growth of the mobile app market in certain geographic regions - the countries of the Middle East, China (especially Hong Kong), the countries of South America, in particular Brazil. All this will help us identify the main directions for the development of our applications and slightly mitigate the consequences of the decline in the market in Europe and other developed countries.

The Importance of Mobile Analytics Tools

We can safely extrapolate the trend of the last few years to the future. The more analytical data about the market, competitors and the application itself we have at our disposal, the more competent and thoughtful promotion and marketing strategy can be. In this case, information can be a decisive advantage over competitors. By choosing high-quality mobile app analytics, you are investing in the success of your app.

Personalized Marketing and Targeting

The latest innovations and app store updates show us a trend towards more targeted marketing and promotion of mobile games and apps - custom pages from the App Store and custom lists from Google Play allow us to make the approach to promotion more personalized and focused on a specific target audience. That is why next year the focus will be on the user audience - the better you know your user, the more successful your promotion strategy and tactics will be.

This primarily affects ASO optimization - working with keywords that are not only general or niche, but also relevant specifically for the target audience. The visual part is similar - creatives and visual elements taking into account the interests and tastes of end users.

A personalized user journey is the key to successful promotion in 2023.

Prepare for the worst, hope for the best

By no means we want to be seen as pessimists - so we look forward to 2023 with all its opportunities, challenges, and complexities. But we can't help but draw your attention to the scenarios of development of your application - be sure, when planning for the next year, consider the possibility of a negative development of the plot, how you can prepare your application for difficulties and obstacles. Having a pessimistic scenario will make it easier to pass all the pitfalls in the turbulent flow of the coming year. Remember about users, they can also be pretty “stormy” in conditions of uncertainty. Think about how your application is ready to support them - offer more loyal subscription terms, find alternative ways to monetize or see this as a growth opportunity. If we are talking about the latter, then the forecast for the growth of applications for mental health, calmness and stress management will be popular for more than a year - this has been a reality since the days of Covid 19.

By building apps that benefit your users, you'll get through tough times with confidence. The latter can become an impulse for you - for growth, advancement, and successful results.

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