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Latin America – a sweet spot of the mobile commerce opportunity

October 13, 2021

brazilian woman looking mobile screen to use app

Luisa Muneratti

SVP – Iberia and Latin America

The continent of Latin America is now one of the fastest-growing markets for mobile apps globally, fuelled by expanding smartphone penetration and rapid increases in mobile network speed, coverage, and capacity.

A report compiled by mobile data and analytics specialist App Annie (How to Win on Mobile in LATAM) analysed downloads, spending and usage statistics in Argentina, Brazil, Chile, Colombia, Mexico and Peru in 2020 and 2021. It estimates that consumer spending on mobile apps swelled 26% year on year to reach US$2.9bn during the twelve months up to and including June this year. Downloads neared 21bn during the period, though they were significantly higher for Android devices (around 18.4bn) than for Apple iOS equivalents (roughly 2.1bn).

Consumer spending was more evenly split, however – US$1.62bn for iOS and US$1.27bn for Android – indicating there are significant opportunities for monetisation for developers on both platforms in the region. Indeed, Android commands 44% of consumer spending in Latin America, much higher than the 35% it accounts for globally.

Brazil and Mexico are the biggest spenders in the region, contributing 36% and 20% of total consumer revenue between them, followed by Chile (10.5%), Argentina (5.5%) and Peru (5.3%). The relatively larger populations of Brazil (213m) and Mexico (130m) accounted for 73% of downloads. Countries with fewer downloads see a more significant share of consumer spending as they have a higher per capita income compared with their larger neighbours.

A case in point is Uruguay, which has a population of just 3m and accounts for 1.77% of consumer spends and 0.14% of downloads but has a per capita income of around US$16k, over double that of Brazil.

High smartphone penetration and mobile network speeds drive growth

Statistics suggest that the number of unique mobile subscribers in the LatAm region was 440 million at the end of 2020, representing nearly 70% of the population. In its Mobile Economy of Latin America 2020 report, GSMA Intelligence estimates that smartphones represented 72% of total connections in that year, with growth stimulated by a flurry of lower-cost handsets becoming available in the region.

The average download speed of mobile Internet connections in Mexico was 32Mbit/s in January 2021, an increase of 13% over January 2020, according to Ookla speed tests. The same metric in Brazil puts average mobile download speeds at 29Mbit/s, up 18% YoY.

Residents in Brazil (5.4 hours) and Mexico (4.8 hours) also lead in the number of hours they spend using their devices every day, up 6% and 15% respectively over the previous year and undoubtedly impacted by coronavirus lockdowns which restricted opportunities to engage in other forms of entertainment and activity.

Games make up 50% of LATAM consumer spend

In terms of app categories, mobile games are still way out in front in terms of revenue generated and downloads. They accounted for half (50%) of total consumer spend in Latin America in the year ending June 2021. However, this was considerably less than the equivalent global statistic, which saw mobile games contribute 68% of turnover, primarily due to their greater popularity in Asian countries, including China, Japan, South Korea, and North America.

There were 9.4bn gaming app downloads across the LatAm region in 2020/2021, up 21% from the prior year. The region’s consumers also spent US$1.46bn on those games, 33% more than they did in 2019/2020. Consumer spending on mobile games was especially strong in Chile, increasing 77% year on year to US$183m. Despite registering a much lower share of downloads, simulation, strategy, RPG, and shoot ‘em ups accounted for 60% of that total, indicating their general worth to consumers compared to hypercasual titles, which made up 32% of all downloads.

Security, shopping, entertainment, finance, and business apps

Though the general direction of travel was very much up, other mobile app categories fared better than others. Downloads of mobile security tools, including anti-virus, privacy, and cleaning apps, expanded considerably – registering a 34% increase in Brazil, for example – though newly digitised government apps also played their part. During the twelve months, shopping, entertainment, finance, and business apps saw high, double-digit growth in downloads across the region.

Other than mobile games, entertainment apps attracted the most significant portion of consumer spend across four out of the six Latin American countries surveyed by App Annie, with Disney+ topping the download rankings in all six. In Brazil, entertainment apps generated double the turnover (US$130m) of their nearest rival (photo and video apps, US$65m), but the pattern is different elsewhere. For example, Argentinian consumers spent more on photo and video apps, while their counterparts in Columbia preferred to invest in health and fitness apps.

With so many people working and studying from home due to pandemic induced lockdown restrictions, it’s perhaps no surprise that the citizens of Latin America spent more time engaged with business, medical and education apps during 2020/2021 than they did in 2019/2020. These three categories registered increases of 120%, 100% and 60% in terms of total minutes spent using them during the period.

App Annie also noted a 41% increase in sessions initiated by FinTech apps last year, particularly regarding new digital wallets, neobanks and contactless credit cards. And those apps are expected to see continued rapid momentum over the next few years as consumers in Latin America maintain their newly embraced online shopping habits and adopt the smartphone as the device of choice when it comes to funding it.

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