Just about 5% users spend money to make in-app purchases: Report

Even as the revenue from in-app purchases (IAPs) is projected to grow to $37 billion globally by 2017, only 5.2% of users spend money to make such purchases, wherein an average user spends $0.50 per month per app.

In India, only 3.1% users spend money on in-app purchases and an average user spends $0.27 per month per app, a report by AppsFlyer, a global mobile marketing attribution analytics company said.

When it comes to spending on IAP, there is a big difference between paying and non-paying users.

The average global paying user spends $9.60 a month per app, which is 20 times more than the average user (taking into account both paying and non-paying users).

The average user spends $0.50 per month on IAP per app with purchase activity (the average paying user spends $9.60 per month) globally. In India, the average user spends $0.27 and the average paying user spends $8.78 per month.

The report shows that globally, iOS users spend nearly 2.5 times as much as Android users — $1.08 to $0.43 in monthly IAP per user, per app and the former's average purchase value is double the latter's ($12.77 versus $6.19).

In India, iOS users spend approximately 5.5 times more than Android users — $1.12 to $0.20 and iOS users are three times more likely to spend in apps than Android users.

App developers generate revenue from in-app advertising, premium models, subscriptions and IAPs. In a freemium-dominated space, reliance on IAP revenue is growing and it is projected to grow from $14 billion in 2015 to $37 billion by 2017.

The report examined data from April and May 2016, studying nearly 30 million purchase events conducted by over 100 million users across over 1,000 apps that have in-app purchase activity. The total spend analysed in this report was $300 million worth of in-app transactions.

A regional comparison puts Asian users ahead of every other region, with a $0.70 average spend, followed by North American users who spend $0.61. Europe and Latin America trail far behind.

These findings suggest that when comparing different users across the globe, mobile-first Asian users are more likely to both trust and rely on their mobile-savviness to spend money in apps.

"As app developers lay out their development, marketing and engagement strategies, it is critical for them to understand the differences in in-app spending behaviours across different platforms, geographic regions and app categories," said Ran Avrahamy, AppsFlyer's VP of Marketing.

"Our data shows that in-app spending continues to present a significant opportunity for app publishers and marketers. While only a small portion of app users actually spend money on in-app purchases, app developers and marketers can capitalise by ensuring they always offer an optimal in-app experience," Avrahamy added.