How to Penetrate Russia’s Expansive App Market
Russia is considered the 5th largest app market for iOS and Android mobile app downloads and is ranked 25th in the world for smartphone penetration. With over 84 million mobile users in the country, this significant number of users offers an attractive opportunity for mobile app owners and brands to monetize the market to gain both downloads and revenue.
Key Drivers of Russia’s App Market Expansion
Russia’s emerging app market has seen considerable growth tracing back as early as 2009, almost a full year later than the rest of the developed world. Russia is considered the largest smartphone market in Europe, with the ad tech space still emerging. From 2016 to 2017, Russia saw the largest market share growth year over year in the world, with India’s growth coming in a close second. In 2018, Russia’s app market continues to grow and expand, presenting strong opportunities for app owners and publishers to tap into its immense market revenue potential.
Much of the Russian Federation’s app market growth stems from the policy of technological neutrality that was introduced to the country at the end of 2013. This policy required mobile internet operators to provide 3G and 4G mobile access to any urban areas with populations that exceeded 10,000 people. This policy aided in the significant and rapid growth of the Russian mobile internet penetration to users that were previously unable to access mobile internet without wifi. According to Newzoo’s 2017 Global Mobile Market Report, smartphone penetration for the population of Russia was around 54.7%, up from 45% in both 2016 and 2015.
Russia experienced economic instability in early 2015, but currency fluctuations have since stabilized, allowing the Russian market to grow considerably over a very short period of time.
Russia’s emerging app market is dominated primarily by Android Operating Systems. At the end of 2014, the Russian ruble fell considerably against the United States dollar (1 USD = 72.4005 RUB in December of 2014), and Apple increased the price of its iPhone by over 35% because of this drop. This price hike resulted in Android devices earning almost 80% of Russia’s smartphone market, lending an obvious advantage to Android app publishers. Android devices tend to be considerably more affordable than iOS devices, and as a result, the majority of the Russian population owns an Android device. As connectivity and smartphones are becoming more and more affordable, Russia’s app market continues to expand.
Google Play provides over three times as many downloads as the iOS App Store in Russia, though in 2018, the U.S., Russia, and Turkey all experienced significant growth of iOS downloads. While the market continues to be dominated by Android devices, the local Russian app store Yandex.Store is the country’s largest alternative to the Google Play and Apple App Stores and Yandex.Store comes pre-installed on most Russian smartphones.
Russia’s large smartphone market potential, tech-enabled environment (that includes developers, engineers, and IT specialists), fairly low User Acquisition costs, affordable connectivity, and low cost of smartphones makes Russia’s emerging app market a shining opportunity for app publishers and owners to reach new audiences.
“This is just the beginning of a promising trend. The future is bright for game publishers in Russia,” said Zorka.Mobi CEO Dmitry Hudoy.”
Russia’s Top App Categories
Top app categories in the Russian include Social Media apps, Messaging Apps, and gaming apps. Russia’s social apps continue to gain popularity, and gaming applications, especially strategy and role-playing games, have been gaining strong revenue share within the emerging Russian App Market.
Social networks and gaming apps have been the largest drivers of app market growth in Russia. The country was top-ranked for the number of game downloads in Europe, with more than 1.6 billion downloads in 2016 alone, and Russia is considered the 11th largest gaming marketplaces in the world. In 2015, games accounted for over 50% of all app downloads in Russia and generated around 75% of combined iOS and Google Play revenue.
Russia’s enthusiasm for and love of gaming apps has attracted many foreign gaming app publishers, and the strong performance of international gaming app publishers indicates a promising opportunity for international expansion into Russia’s emerging market. Marketers will especially enjoy Russia’s low cost-per-install rates, ranking in at almost half the cost-per-install when compared to the USA.
Russia's app market
While gaming apps remain popular, eCommerce mobile app platforms are on the rise in Russia, offering exciting new opportunities for app advertisers. Just under half of the entire Russian population shopping online and eCommerce in 2016 was worth more than €14.85 billion.