When it comes to promoting your app, most European and US developers instinctively seek success in the markets they know best. But smartphone adoption goes well beyond the borders of Europe and the US and global growth is already skewing toward emerging markets. By ignoring this, developers could be missing out on a huge opportunity to gain a valuable userbase for their app for relatively low expenditure. So that’s why we’re publishing a series of articles focusing on different regional app markets, which you may not have considered when it comes to launching an app promotion campaign.
First up is Latin America, where we’ll cover the general smartphone market, popular apps, localisation issues and much more. Latin America is one of the fastest growing regions in the world in terms of smartphone penetration and is home to a population of highly engaged mobile app users. The region also has very low CPIs and is free of many of the localisation issues that affect other emerging markets. But Latin America is also a big area and has a number characteristics that need to be taken into account before getting your hands dirty. Hopefully by the end of this report you’ll have a better understanding of the Latin American app market, the challenges it presents and the the ways in which it can help grow your app’s value.
If you have any further tips, suggestions, or if you’re an company focused on the Latin American app market, let us know in the comments below.
Promoting your app in Latin America: Contents
- Latin America: Smartphone Penetration
- Mobile OS market share
- User value
- App usage and enagagement
- What apps are popular?
- Localisation issues
- App promotion networks and ad companies
Latin America: Smartphone penetration
The Latin American smartphone market is rapidly growing. Along with China and India, Latin America is one the key drivers behind global smartphone growth, as markets in Europe, Asia and the US reach saturation point.
- Over 17 million smartphones are estimated to have shipped in Brazil 2013 – Canalys
- IDC forecasts 91 million smartphones shipped in Latin America for 2013 – IDC
- Canalys estimates 40% growth in Brazilian smartphone shipments in 2014 – Canalys
- 2017 will see smartphone shipments increase to 154.7 million in Latin America – IDC
- Android accounts for over 70% of the Latin American smartphone market Q3 (Brazil, Mexico and China) – Kantar
- The Latin American tablet market saw sales increase 171% year-on-year to 4.5 million units in Q2 2013 – IDC
- Tablet growth in Argentina reached 384% in Q2 2013, compared to worldwide growth of 59.6% – IDC
As you can see illustrated below, Latin American countries already have healthy smartphone markets, with Brazil ranking in 4th place globally for smartphone subscriptions (according to KPCB), powered by a burgeoning middle class, a heavy carrier investment in network infrastructure, and a government pushing things along with tax incentives. As IDC’s numbers from November 2013 show, Latin America is projected to have the highest compound annual growth rate in smartphone shipments, compared to other regions globally, over the next five years.
Worldwide smartphone subscriptions, 2013 (millions)
Source – KPCB
This smartphone boom is powered by the wider growth in Latin American economies. As you can see in the below chart, based on data from Fnbox and Jampp, Latin American GDP growth is forecast to significantly outstrip growth in advanced economies past 2015.
Projected LatAm GDP growth for 2014 and 2015 (%)
Source : Jampp/Fnbox
Below you can see our chart based on IDC’s numbers, showing smartphone shipment growth over the next five years. Latin America just edges over Asia/Pacific as the highest growth market in the world for smartphones, nicely mirroring the region’s increase in GDP.
Global smartphone shipments Compound Annual Growth Rate (2013-2017)
Mobile OS market share
In terms of sheer volume of devices, Android reigns supreme across Latin America, by a big margin.
According to recent data from Kantar, Android accounted for 50.3% of the Latin American market (Brazil, Mexico and Argentina)in Q3 2102, by Q3 2013 Android increased its share to over 70%. By comparison, iOS stood at 6.6% in Q3 2013, compared to 4.4% in Q3 2012.
Interestingly Kantar says BlackBerry experienced its worst regional market share decline in Latin America over the last year, dropping 9.2% from 14.3% in 2012 to 5.1% in 2013. Meanwhile, Windows jumped 1.3% to 5.8%, though this counts Windows Mobile devices, it shows more support in Latin America for Microsoft devices than it does in the USA (4.6%).
Brazil, Argentina, Mexico smartphone OS market share (Q3 2013)
As the chart above shows, Latin America is dominated by Android. Google’s OS claims a similar sized market share in Europe (71%) and an even bigger share in China (81%) according to Kantar. What’s slightly more interesting is the massive swing toward Android over the last year in Latin America, which is illustrated by the below chart showing Kantar data from the three months ending September 2012. Android growth in LatAm between 2012 and 2013 (23%), is bigger than in any other territory over the same period.
Brazil, Argentina, Mexico smartphone OS market share (Q3 2012)
As in other emerging markets, the key reason for Android’s dominance is it’s low cost compared to iOS. But this split in terms of affordability is taken to the very extreme in Latin American countries. Brazil has the highest priced Apple products in the world, with the average price for an iOS device pegged at $1,138 according to Idealo. Due to high taxes and import tariffs, Brazilians pay on average 28% more on Apple products than citizens in other countries.
This may sound like bad news for iOS developers. But while the extreme price disparity inevitably pushes the masses toward Android, it also means that Latin American iPhone users are likely to be incredibly wealthy, giving app developers a much clearer picture of their potential userbase.
Given that Latin American countries generally have lower GDP and average income than US and European markets, it’s expected the average value of Latin American users will to be lower than in Europe and the US – and the data appears to support this.
Looking at Distimo’s global revenue breakdown for August 2013 (Distimo & MEF – Global Trends in Established and Growth Markets), it’s clear that while smartphone penetration is increasing, Latin American users are comparatively not generating a huge amount of revenue in terms of paid apps and in-app purchases. Nevertheless, Brazil ranks 14th out of 40 countries in terms of app revenue generated. That puts Brazil ahead of European countries such as Spain, Norway and Denmark (although obviously Brazil has a much larger population). Other Latin American countries in Distimo’s list include Mexico, which ranks 33 globally for app revenue generated, Chile (38) and Argentina (40).
Global app revenue rankings across major app stores (2013)
In the chart below we can see the average number of paid apps per smartphone in 2013, according survey data from Google. Compared to other emerging markets with similar GDP per capita, such as China (2.1 apps per phone) and South Africa (2.6), Latin American countries are pretty similar, with Brazil on 2.5 and Argentina 2.4. However, Mexican smartphone users appear more prepared to pay for apps, with 4 paid apps per user on average, beating Spain’s 3.7. But the US and UK remain clearly ahead in this area, with 7 and 8 paid apps per phone respectively.
Average number of paid apps per Android user (2013)
App usage and engagement
Latin American users are pretty engaged when it comes to using their devices and using apps. According to a 2013 report from Nielsen Brazil has the fourth highest engagement levels of all countries when it comes to mobile internet usage, with 69% of smartphone owners browsing the web at least once per month. Brazil has the highest level of engagement with social media apps, with 75% of users engaging per month, and the second highest level of engagement with apps in general (74%), behind South Korea (81%) and ahead of the UK and US.
While paid app downloads are relatively low, that’s not the case when it comes to free apps. According to App Annie, Android app downloads in Brazil spiked in recent months, pushing the country into fourth place globally. This can also be seen in Google’s data. The chart below shows the average number of free apps on smartphones and, as you can see, it’s a slightly more level playing field compared to paid apps, although the US is still inching ahead.
Average number of free apps per user (Android)
Cost per installment
While Latin American users may be less valuable than their counterparts in the US or UK, they’re also much cheaper to acquire, which can often mean a much better return on investment for any app promotion campaign. Plus when it comes to smaller markets such as Peru and Chile, there isn’t much app marketing activity taking place, making it cheaper to push your app up the charts. As Jampp’s CEO Diego Meller explains:
“If you’re buying traffic in Latin America the CPI is lower, so you can spend less money to get more users and see how that works,” says Meller. “Obviously the monetisation is also lower. But for certain kind of app and certain kinds of companies the ROI is actually better than in the developed markets. Because if you have to spend $5 per user in the US is actually very hard to get that money back. But if you can spend $1-$2 per user in Brazil or Argentina, then maybe you make more money with those numbers than you do in the US or Europe. So yeah, you get less money back in Latin America – so people spend less money – but also its a lot cheaper to get users.”
So what kind of CPIs can you expect? Here’s a rough breakdown for Chile, Mexico, Argentina and Colombia, followed by breakdown for Brazil, with data kindly provided by Jampp. As you can see, a CPI campaign in Latin America carries a much lower cost compared to the US and Europe.
Cost Per Install averages for Chile, Mexico, Colombia, Argentina (US$)
iOS CPIs are slighter higher in Brazil compared Argentina, Mexico, Chile and Colombia, reflecting the high value of Brazil’s affluent class who can afford iPhones, and the fact that more marketing dollars are being spent in Brazil than in other territories. The cost of Android users remains pretty much the same across both regions.
Cost Per Install averages for Brazil (US$)
The infographic below is taken from AdParlor and compares average CPIs across regions. AdParlor’s numbers are slightly lower than Jampp’s, but the comparison gives you a good idea of how cost-effective a LatAm campaign can be in comparison to more mature markets.
CPI by Territory (2013)
What apps are popular?
Unlike in other emerging markets such as China and other parts of Asia, Latin American users tend to like similar apps to North Americans and Europeans. Below is a comparison of the top ten free and paid apps from Apple’s iOS App Store, with data generated by App Annie. We’ve highlighted in the Latin American charts where an app also appears in the North American charts.
As you can see in the free app charts below, there’s a few titles shared between Brazil, Argentina and the US – mainly games. Furthermore, apart from a few apps purely focused on the LatAm market, nearly all the entries in the Brazilian and Argentinian iOS charts are titles and brands that are pretty well-known in the West.
iOS App Store Top Ten Free Apps (January 27 2013)
The paid app top ten below tells a similar story. Again, mobile games dominate the charts in Brazil and Argentina, but not as much as they do in the US, where nearly all entries, apart from one (‘7 Minute Workout’) are games.
iOS App Store Top Ten Free Apps (January 27 2013)
Latin America: App localisation issues
Latin America has just two main languages – Spanish and Portuguese – making translation efforts easier compared to Europe, where you’re faced with multiple languages. Furthermore, Spanish is already widely spoken in the US and Europe, so if you’ve localised your app beyond English markets, chances are Spanish is already one of the languages you’ve translated content into.
The ease of localisation for Latin America goes beyond translation. Jampp CEO Diego Meller says Latin American app users are very similar to Europeans and Americans culturally.
“The benefit of Latin America is that it is one of the few regions where you have a lot of people who are very similar to the US and Europe culturally,” says Meller. “This means an app that works in the UK is very likely to work in a very similar way in Mexico or Argentina. You cannot say that for Russia, you cannot say that for China, or India, where culturally they are very different countries.”
As evidenced by our app chart comparison above, the types of apps used by Latin American users, and the type that dominate the charts, do seem to mirror app markets in Europe and the US quite nicely. For instance, if we compare Latin American app charts to Chinese and Russian charts, we see very few correlations, and a great deal of apps that are totally unfamiliar to US and European users.
For Meller, the ease of localisation, combined with the low cost of user acquisition, means Latin American markets are ideal low risk testing grounds for developers.
“If you can translate your app into other languages then yes I would launch in Latin American countries first,” says Meller. “The risk is lower, the cost is lower, and you may learn stuff you can apply more efficiently in the bigger markets.”
Meller continues: “For example you can start in a small country, such as Chile or Peru. These are great markets, because they are small, but with very good users – the countries are doing well but not many companies are spending mobile marketing dollars there. So it’s not so difficult to make it to the top of the rankings in Chile or Perus, it’s pretty cheap to run a campaign. Your app may explode there, so that creates a very good case for you to improve your app, get more data, and so forth and move onto the next country. You can then conquer one by one and ultimately move onto the US or wherever.”
Latin American-focused app promotion companies and ad networks
Jampp – Data driven mobile app promotion platform that focuses on Brazil and Latin America. Helps companies acquire users on a CPI basis. (Visit website)
WebMobLink – Self serve mobile advertising network that focuses on both the Hispanic and Latin American market. (Visit website)
Sofialys – European mobile ad network and marketing service provider, with offices in Mexico and Singapore. Offers video ads, banner ads and SMS solutions. (Visit website)
StartMeApp – RTB ad exchange connecting advertisers, agencies, publishers and ad networks on a real time basis. Claims to be the leader in Latin American mobile ad services. (Visit website)
TapTapNetworks – Premium mobile ad network that focuses on the Spanish and Brazilian market. Offers rich media ads and advanced targeting. (Visit website)
Hands – Premium mobile ad network that focuses on the Brazilian market. Supports CPC, CPM, banners, rich media and video ads. (Visit website)
Hunt Mobile Ads – Mobile ad network and publishing platform that specialises in the Spanish-speaking market, covering Mexico, the US, Brazil and much of Latin America. (Visit website)
Webmoblink – Self-service mobile ad network that provides a global service but specialises in Latin American markets. Supports click to call and SMS advertising. (Visit website)
Adyuz – Spanish mobile ad network that focuses on premium advertisers and publishers in Hispanic markets. Works with brands such as Fox and Televisa. (Visit website)
So rounding-up, it’s clear Latin America provides a number of opportunities for developers. Firstly, markets such as Brazil and Mexico have plenty of smartphone users and a really engaged audience. The value of the users may be low, but the cost of campaigns are also low, meaning there’s real opportunity for smaller devs to get a foothold. Furthermore, these markets are becoming the key drivers of growth in the global smartphone market, so the sooner you can establish yourself the better. In tandem with all that, Latin America is a great place to test out your app on smaller markets, before spending a lot of money promoting in the US and Europe. Testing and collecting data is a vital part of the app promotion process and countries like Chile, Peru and Colombia will give you more room to experiment with your budget. Plus if you’ve struggled to get traction in more mature markets, Latin America presents a new opportunity and a higher chance of breaking into the regional app charts, potentially giving your app a second wind.