Last updated: 19 June 2015
With the recent surge in sales of mobile devices, Brazil is expected to become one of the main markets to drive revenue for apps in the world.
With the recent surge in sales of mobile devices, Brazil is expected to become one of the main markets to drive revenue for apps in the world. In this article we will look at the in-app purchase model and its potential for the Brazilian market.
App Market in Brazil
During the last two years, sales of mobile devices have soared in Brazil. According to market analyst IDC, in 2014 alone more than 54 million smartphones were sold in the country, which represents an increase of 55% from the previous year. Tablets also saw an increase of 13% in sales in 2014, with 9,5 million devices sold in the country during that year.
The tens of millions active mobile devices in Brazil are currently being used as platforms for the consumption of various types of content, and appdownloads have risen accordingly in recent years. Data from analyst App Annie indicates that from September 2013 to September 2014 the total download of apps doubled in Brazil. Additionally, during the same period, the profitability of applications offered in the Google Play and iTunes marketplaces grew 40%, an indication of the interest of Brazilian consumers in the purchase of premium content for their downloaded applications.
Currently, all national branches from major app marketplaces such as Google Play, iTunes, Windows Store and Amazon App Store allow for the offering of in-app purchases, and this type of content has proven to generate high engagement for Brazilian consumers. This is due to a multitude of reasons, the main of which being the much higher acceptance for the download of free applications in comparison to paid ones.
A study conducted by survey company OpinionBox in 2015 found that 39.5% of Brazilian smartphone owners purchased in-app content, but only 15.3% of users paid for apps. In markets such as Brazil, freemium-modeled applications display much higher penetration and overall increased profitability when compared to paid ones, and this is precisely the case where the inclusion of in-app offerings are capable of generating more revenue and engagement to users.
In-App Content Consumption in Brazil
Many types of content, such as game items or even videos and extra functions for utility applications, are commonly purchased by mobile device users in Brazil through in-app transactions. According to data from marketplaces Google Play and iTunes, freemium-modeled applications that offer in-app purchases are some of the most profitable apps offered in the country.
The overall most profitable apps in Brazil are freemium games which offer consumable items through in-app purchases. As many genres have adapted to this business model, the current offerings of this content are vast and encompass strategy, action and sports titles. Games are not only the massive majority of most profitable mobile applications in Brazil but are also expected to maintain significant expansion in the country over the coming years.
A study from 2015 by companies Newzoo and OneSky indicates that the market for mobile gaming in Brazil should grow over 30% per year and reach USD 400 million by 2016. Smartphones are expected to be the devices driving most of the revenue for this segment, considering their much larger penetration in the country when compared to tablets.
Some of the most successful video streaming apps in Brazil offer additional content as in-app purchasable items. The most notable of these cases are locally developed applications PlayKids and Turma da Galinha Pintadinha, both of which specialize in content for children. The most popular video content offered in these apps is charged at low cost, with prices for music videos hovering around USD 0.99.
In-app purchase offerings are also used to drive substantial revenue to utility applications in Brazil. Some of the most profitable utility applications in the country includes online dating platforms Tinder and Badoo, anti-virus software AVG and Kapersky and messaging app Viber.
Implementing In-App Purchases
The integration of in-app purchases can be one of the most important factors for an app’s success as its mains source of revenue. Partners such as Digital River can allow for fast and simple implementation of in-app offerings that better fit your mobile device audience’s needs.
Digital River’s services also include a complete set of merchandising capabilities, customized API’s and full compliance to the country’s regulation on payment and online commerce.