The App mall (store) is dead; time to re-invent

Man In Front Of A Closed Shop, Malacca, Malaysia
Source: Eric Lafforgue – Man In Front Of A Closed Shop, Malacca, Malaysia

R.I.P to the app mall, mall in case I am sued for breaking copyright on “app store”. The store model worked for the first eight years of its existence. As we start its ninth year there is a definite shift accompanied by a death knell. Developers need to start refocusing their efforts on a store within a store model. I purposefully chose the word mall because it fits well with the digital evolution of apps.

The App Mall Issue

First to substantiate my claim I put some numbers to sizes of the two main sources of apps; the app store and the play store. The two main stores have more than 1 million apps each as of January 2016 (source: statistica.com).

Size of the different app stores
Size of the different app stores

The average smart phone user uses only 26 applications (source: Nielson) per month, some of those may only be used once per month or more often if the Kwacha gets a little turbulent. A developer now has to compete against a global catchment of talent all vying for the users attention. The competition has resulted in an industry focused on app search optimisation (ASO). ASO is SEO re-invented for the app mall, where thousands of developers and companies try to get their app onto the store home page. In a market-place where getting onto the main page means developers perfecting their unique app name, their app description, great reviews, viral level downloads and a minimal amount of uninstalls, the abilities of the app seem to be of minimal importance. There are no definite statistics for how many installations are required to make it into the top 10 in Zambia, you will have to beat WhatsApp, Instagram, Facebook Messenger (Facebook in all its guises); beating any of those global apps is going to be extremely difficult.

With a size in millions of apps the stores are dominated by brand titans. These are companies with significant marketing (venture) capital behind them. You have to compete with your bootstrap budget. The top ten most used apps are (source:Mary Meeker):

Top ten most used apps globally. Source: Mary Meeker Internet Trends
Top ten most used apps globally. Source: Mary Meeker Internet Trends

The obvious commonality between the bulk of the application is they serve a social purpose. It may seem like it is a winner to design a social app but let’s look beyond the app. What are the market values of the companies behind the applications:

App Valuation (Company)
Facebook$250 Billion
Line$15 Billion
Viber$900 Million *
Kakao Talk$9.45 Billion
We Chat$83.6 Billion
Twitter$10 Billion

Some of the valuations are based on the purchase valuations of the companies. To be a top 10 app you have to be valued at over a billion dollars. Whilst our local developers are not aiming for global domination, the need for cash holds true. An argument may be made that the valuation followed the app popularity but most of the apps listed are not profitable. Much like a mall you have to be a company of relatively sound financials to be able to afford the premium space that guarantees good footfall and the resulting sales. As a small kantemba your sales will be limited to either accidental traffic or personal associates. How to move from Plot 53 Kamwala to Manda Hill?

Shop within a Shop

The retail sector has long realised that sub-letting is a good thing. Within most malls anchor tenants have leased out space smaller retailers either on a consignment basis or shelf space. Taking that analogy and applying it to our digital mall I am talking about app integration. We can see app integration already taking place with Facebook talking to Instagram, Uber talking to Citymapper and an Uber bot within Facebook Messenger. The app mall is dead. Now developers have to focus on building shops within shops. This means rich api’s and deep levels of integration have to be native to the application from day one. Self-contained, full-featured apps are not going to drive growth in the next decade.

Local app developers should not bemoan the lack of API integration from the key players. All apps being released in 2016 should have a rich set of APIs because you never know where your growth will come. In addition to the digital API developers need the human/business APIs in place. Human APIs are the right contacts in the right places who can negotiate the right business deals to leverage your applications functionality. Innovation hubs should serve the role of mediator with in-house incubated apps or developers. No developer should finish an app without a published digital and business API. The business API will list any commercials for integration and the associated legal processes. Our shop within a shop for the Zambian market would be:

shopzedMy online shopping experience
zamloopMy classifieds buying and selling
thebestofzambiaLooking for companies
Tamanga Ticketing
Tamanga Ticketing
Booking my transport

Why can’t all those apps talk to each other? Install a single application that gives me the functionality through integration with other applications. The app stores will not drive uptake or usage.

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