The app economy has recovered in 2023 with an increase in consumer spending on apps. This comes after the App economy saw a snag in a post-Covid slump in 2022 as consumer spending normalized and a down economy that saw more people tighten their wallets.
However, in 2023 things picked up the pace again according to the app intelligence data provider. The state of the mobile report released by Data.ai on the 10th of January, 2024, shows that consumer spending on apps saw a modest 3% increase year-over-year in 2023 to reach $171 billion across the App Store, Google Play, and third-party Android app stores in China.
The report further showed that a growing part of that total consumer spend came from apps, not mobile games, thanks in part to TikTok’s success. However, app downloads remained flat last year at 257 billion, up only around 1% year-over-year.
Meta apps monetization coming to Kenya.
Consumer spending on non-game apps grew 11% year-over-year in 2023 to reach $64 billion. Social apps and the creator economy drove this growth with TikTok helping to lead the way. Last year, the short-form video app hit a new milestone of more than $10 billion in lifetime spending, for instance, becoming the first non-game app to do so. This year, many experts in the app economy predict that consumer monetization in social apps will grow 150% to $1.3 billion.
Elsewhere, more than 1,500 apps and games generated over $10 million annually in 2023, while 219 surpassed $100 million and 13 surpassed $1 billion. Four new apps reached $1 billion in the year, including Royal Match, Google One, Max, and Gardenscapes.
Generative AI advances have been cited as a big player in fueling consumer spending on apps spending last year. The genAI app market expanded by 7x, leading to new consumer experiences like AI chatbots and AI art generators. Top apps included ChatGPT, Ask AI, and Open Chat, in terms of consumer spending. Outside of AI apps themselves, other apps adopting AI features also did well in 2023. 20 apps that added such features saw 11% year-over-year growth in downloads, with 13 of the 20 (65%) seeing positive growth.
The full report also delved into other metrics of app ecosystem health, including installs, time spent, ad spend, gaming-specific details, and more. 5.1 trillion hours were spent on apps which was a 6% growth with the 2024 forecast predicting a larger jump of 16.2% to reach $402 billion.
Meanwhile, across 10 top markets, the average daily hours spent on mobile per user grew 6% from 2022 to reach more than 5 hours. Here, apps like YouTube, WhatsApp, Facebook, TikTok, Chrome, Instagram, Netflix and others helped boost time spent.
Mobile gaming, however, did not far as well in 2023, with spending down 2% year-over-year to $107 billion. Gaming downloads were roughly in line with prior years, accounting for 88 billion out of the 257 billion total downloads. Other 2023 trends saw Chinese shopping apps like Temu and Shein growing 140% as they reached Western markets, while social and entertainment apps’ time spent grew 12% to 3 trillion hours.
Post-pandemic trends also continued as travel app downloads grew 13%, driven by travel services (26%), tour booking (80%), and flight booking (43%). Similarly, ticketing apps jumped 31%.
Worldwide, the top app by installs and spending was TikTok, but Facebook remained No. 1 by time spent. The top games were Subway Surfers (downloads), Candy Crush Saga (spending), and Roblox (monthly active users).