PhonePe to open its app store to developers to counter Google, Apple clout
PhonePe, the fintech company owned by Walmart, is set to challenge the duopoly of Google and Apple in the mobile app distribution space by opening its own mobile app store, named Indus Appstore, to developers. The announcement of this strategic move is expected to happen around September 23.
Indus Appstore will offer a unique proposition to developers by not charging any fees on in-app purchases made through apps on its platform. This stands in contrast to Google and Apple, which typically levy a 15-30 percent fee on such transactions.
In addition to its fee structure, Indus Appstore will support multiple Indian languages, allowing developers to list their apps in 12 Indian languages apart from English. This multilingual support aims to broaden the reach of apps on the platform and cater to a diverse user base in India.
Furthermore, developers will have the option to upload media and videos to enhance their app listings in these languages, providing a richer and more engaging experience for users. PhonePe’s move into the app store market signals its ambition to offer an alternative distribution platform for app developers, potentially disrupting the current dominance of Google and Apple in the mobile app ecosystem.
Indus Appstore, the new mobile app marketplace by PhonePe, is poised to address several pain points that developers often encounter when dealing with industry giants Google and Apple. Notably, it boasts a 24×7 dedicated India-based support system, aiming to provide developers with quick and assured resolutions to their queries, a feature that addresses a common concern within the developer community.
Furthermore, the platform intends to establish itself as developer-friendly and transparent, offering clear policies and guidelines for app submissions and revenue-sharing. Indus Appstore also plans to launch a consumer-facing app, featuring sections for various types of apps and games, as well as language customization options for users.
Additionally, its search functionality and innovative content discovery, featuring short video carousels and app recommendations, aim to enhance the user experience. While PhonePe has not provided extensive comments on this development, these features signal its ambition to provide a competitive alternative in the mobile app distribution landscape.
The launch of Indus Appstore by PhonePe comes at a significant juncture when Google and Apple are facing increased regulatory scrutiny over their app marketplace practices in India and several other markets. The Competition Commission of India (CCI), the country’s antitrust watchdog, took action in October of the previous year, directing Google to amend its conduct with smartphone manufacturers and app developers. This directive included imposing penalties and allowing third-party app stores on Google Play.
However, in March 2023, the National Company Law Appellate Tribunal (NCLAT) set aside the CCI’s direction regarding third-party app stores on Google Play, indicating the ongoing legal complexities surrounding this issue.
Google has faced growing criticism from Indian developers, particularly after announcing in October 2020 its mandatory integration of the Play billing system worldwide. Many developers have expressed concerns about the perceived high and unfair commission fees associated with this system.
To address these concerns, Google has implemented several policy modifications, including reductions in commission fees and the introduction of third-party billing options for in-app purchases. Google contends that these changes align with the CCI’s directives, but numerous local app developers remain unconvinced and have chosen to challenge these modifications in court. This situation reflects the evolving landscape of app marketplace regulation in India and the broader challenges faced by tech giants in balancing their business practices with regulatory expectations and developer interests.
The launch of Indus Appstore has been in the works for some time, with PhonePe taking strategic steps to make it a reality. In July 2022, PhonePe acquired Indus OS, an indigenous Android content and app discovery platform, after a prolonged legal battle. This acquisition laid the foundation for the development of the Indus Appstore.
In April 2023, Sameer Nigam, co-founder of PhonePe, confirmed the company’s plans to build an app store during an interview with Moneycontrol. PhonePe also revealed that it was in discussions with original equipment manufacturers (OEMs) to integrate the app store into their devices in the coming months.
Indus Appstore’s monetization strategy is expected to revolve around advertising and value-added services for developers. App marketers will have opportunities for enhanced visibility through boosted search results, dedicated video slots for promotion, and custom-targeted ad campaigns. The platform will support rich media ads in various Indian languages and offer translation services, facilitating app listings in multiple regional languages.
For developers, Indus Appstore will provide features such as defining custom user groups for app rollouts, testing features with select audiences, and gaining greater control over app releases. Developers will also have access to real-time tracking of app installations and removals, insights into competitor trends, and a transparent rating system.
PhonePe already offers the ‘Switch’ platform within its payments app, offering users an app-like experience across various categories, including food, grocery, shopping, travel, and healthcare.
Founded in December 2015 by Sameer Nigam, Rahul Chari, and Burzin Engineer, PhonePe has achieved substantial growth with over 480 million registered users. The company is currently in the process of raising $1 billion in funding at a valuation of $12 billion, having secured over $850 million from investors such as General Atlantic, Tiger Global, Ribbit Capital, TVS Capital, and its parent company, Walmart. This fundraising effort follows PhonePe’s spin-off from e-commerce giant Flipkart, which was announced in December and marked its transition into a fully Indian-domiciled company.
PhonePe has been diversifying its offerings over the past year, expanding into areas such as digital commerce, stockbroking, account aggregation services, online payment gateways, and point-of-sale devices. Additionally, the company is scaling up its financial services, including mutual funds and insurance, while maintaining its market leadership in digital payments with approximately 47 percent market share in terms of monthly volumes as of August 2023.
