The app economy rebounded in 2023 with consumer spending reaching 1 billion, but downloads remained flat
5 mins read

The app economy rebounded in 2023 with consumer spending reaching $171 billion, but downloads remained flat

According to the app economy will slow down for the first time ever in 2022Things picked up speed again last year. According to app intelligence provider data.ai’s annual report, ““State of Mobile” report, Released today, 2023 consumer spending on apps across the App Store, Google Play and third-party Android app stores in Chiana saw a slight 3% year-over-year increase to $171 billion. A growing portion of this total consumer spending came from apps rather than mobile games, thanks in part to the success of TikTok. However, app downloads remained flat last year at 257 billion, up only about 1% from the previous year.

In 2022, the app economy’s uninterrupted growth in a post-Covid slump finally hit a snag as consumer spending normalized and a weakening economy caused more people to tighten their wallets. Back-of-the-napkin math even suggested that consumer spending may have slowed Apple’s App Store However, it was not possible to give exact figures because Apple’s share of transactions is no longer a flat 30%.

According to data.ai, things went in a positive direction again last year.

Consumer spending on non-gaming apps increased 11% year-over-year to $64 billion in 2023. Social apps and the creator economy drove this growth, with TikTok leading the way. Last year, for example, the short-video app reached a new milestone of more than $10 billion in lifetime spending. This makes it the first non-gaming app to do this. This year, data.ai predicts that consumer monetization on social apps will increase 150% to $1.3 billion.

Photo credit: data.ai

Elsewhere, more than 1,500 apps and games generated over $10 million annually in 2023 219 exceeded $100 million and 13 exceeded $1 billion. Four new apps reached $1 billion in sales this year, including Royal Match, Google One, Max and Gardenscapes.

Photo credit: data.ai

The company also cited that advances in generative AI helped boost consumer spending last year. The genAI app market grew sevenfold, leading to new consumer experiences such as AI chatbots and AI art generators. The top apps as measured by consumer spending included ChatGPT, Ask AI and Open Chat. Data.ai noted that the popularity of AI apps is “fairly global,” but the genre was not among the breakout genres in China, Japan, Saudi Arabia and Turkey.

Photo credit: data.ai

To capitalize on consumer demand, more than 4,000 apps added the word “chatbot” to their app descriptions, and more than 3,500 added “gpt,” data.ai found. Additionally, 2,500 apps were launched with “chatbot” in their description in 2023 – which the company says is nearly double the number of apps launched in the last four years combined.

In addition to the AI ​​apps themselves, other apps with AI features also performed well in 2023.

According to data.ai, 20 apps that added such features saw an 11% year-over-year increase in downloads. 13 of the 20 (65%) also experienced positive growth.

Photo credit: data.ai

The full report also looked at other metrics related to the health of the app ecosystem, including installs, time spent, ad spend, game-specific details and more.

Last year, China topped India (No. 2) and the US (No. 3) in app installs, while Bangladesh emerged as the fastest-growing market. App subgenres included things like utilities, productivity apps, shopping, entertainment, and photo and video.

Photo credit: data.ai

Data.ai also reported that hours spent peaked at 5.1 trillion, up 6% year over year, while mobile ad spending is expected to reach $362 billion this year, a increase of 8%. The forecast for 2024 calls for a larger 16.2% increase to $402 billion, data.ai estimates, as advertising spending recovers from slower growth in 2023.

Meanwhile, across the top 10 markets, average daily hours spent on mobile per user increased by 6% to over 5 hours from 2022. Here, apps like YouTube, WhatsApp, Facebook, TikTok, Chrome, Instagram, Netflix and others have helped to increase the amount of time spent.

Photo credit: data.ai

Photo credit: data.ai

However, mobile gaming didn’t fare so well in 2023, with spending down 2% year-over-year to $107 billion. Gaming downloads were roughly the same as previous years and accounted for 88 billion of the total 257 billion downloads. The top genres included hypercasual, simulation and action. Breakout games of the year included Monopoly GO and EA Sports FC Mobile Soccer. Another milestone: Genshin Impact has surpassed $4 billion in total spending. Games like Block Blast Adventure Master and Attack Hole drove downloads, as did surprise hits like Avatar Life. Gacha Life 2 and Eggy Party also saw big increases in downloads and usage.

Photo credit: data.ai

Photo credit: data.ai

Other trends in 2023 saw Chinese shopping apps like Temu and Shein grow 140% as they reached Western markets, while social and entertainment app time spent increased 12% to 3 trillion hours. The latter also saw a 10% increase in spending to $29 billion.

Post-pandemic trends continued as travel app downloads increased by 13%, driven by travel services (26%), travel bookings (80%) and flight bookings (43%). Similarly, ticketing apps rose 31% thanks to major concerts from Taylor Swift and Beyoncé – a 66% increase from pre-pandemic levels.

The full report breaks down the top apps and games by country by metrics such as installs, spend and time, and delves deeper into individual sectors such as finance, retail, video streaming, social, food and drink, travel, health and fitness , sports and more .

Globally, TikTok was the top app by installs and spend, but Facebook remained No. 1 by time invested. The top games were Subway Surfers (downloads), Candy Crush Saga (spending) and Roblox (monthly active users).

Photo credit: data.ai

Photo credit: data.ai