• Consumer Research
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Cracking The Korea App Market

Sukamal Pegu
5 min read
Posted on September 11, 2012

With an estimated 28M active iOS and Android devices, South Korea is one of the biggest and most attractive markets for app developers trying to gain a foothold in Asia. It also helps that it is the unofficial home of the Android ecosystem, largely due to Samsung and LG, two of the biggest Android phone manufacturers in the world, based out of here. But if developers think that all they need to do is to simply localize their apps and release it on Google Play or App Store to be successful in South Korea, they are in for a rude shock. But it is not rocket science either. All developers have to do is to dig a little deep into the market and understand what makes apps tick in Korea. So, lets try to scratch the surface see whats happening in South Korea. South Korea is smartphone country with a data connection to match

  • A recent study suggested that over 76% of the adult population (15-64 years) in South Korea use a smartphone. When you consider South Koreas total population of roughly over 50M, it is a huge penetration!
  • 28M iOS and Android active devices
  • Although South Korea is a big Android market, Apple has made huge inroads since 2011 with its iDevices, largely due to their desirability quotient and Apples seamless ecosystem
  • While the western world happily sips from modest 3G mobile connections, South Korea is still outpacing anywhere else with the adoption of 4G technologies, which provides speeds up to 40.32 mbps on the go. Thats around 10x faster than 3G

High data consumption on the go

(Image: Tesco virtual store at a subway station in Seoul)

  • With data speeds to match high smart device penetration, it is a no-holds barred data consumption jungle out there, with consumers replacing a lot of their normal home TV and video viewing habits to a mobile device
  • Entertainment (K-pop, movies, live TV), Communication (VoiP, video chat), gaming (both hardcore and social casual), social& professional networking and shopping lead the mobile consumption habits in Korea
  • Education is another category which is rapidly making inroads when it comes to mobile delivery

It is not just about Google Play

(Image: SK Telecom Android app store)

  • While Android handset growth in South Korea is phenomenal, its clear that the Google Play store has yet to establish itself as the dominant Android app store. Here, Google Play is not only competing with iOS, but faces stiff competition from regional app stores operated by local mobile operators
  • Not just mobile operators, even platform owners are creating their own app ecosystem, notably the KakaoTalk game platform, Com2Us Hub, Hangame social game platform from NHN, making the non-iOS ecosystem extremely fragmented and difficult to crack. However, each of these platforms have a huge audience and success on one platform usually leads to a trickling effect on other platforms

Paid Vs. Free Vs. Freemium models

  • It has been observed that Android users monetize at a much higher rate in South Korea because telecom providers offer carrier billing. A fast and easy purchase option, it allows users without credit cards to purchase digital goods and boosts conversion and monetization rates in the South Korean Android market. Large studios have seen their conversion rates increase by over 7% compared to non carrier billing markets
  • Korean studios prefer the free-to-play and monetize via digital goods / advertisements rather than the paid model, as they believe they can modify their free titles faster and improve conversion rather than a one shot burst from paid downloads, which is more of a hit-or-miss model

So, what does it mean for developers looking to crack South Korea

  • iOS and Android are the only platforms that matter.
  • For Android products, look beyond Google Play to the various telco app stores and social platform ecosystems for distribution
  • If games is the category you are targeting, increase the lifetime value and monetization of your apps through a free-to-play model with a freemium model
  • If your app has a short lifetime value, paid model will work the best for you
  • If Ad monetization is your model, then look for an ad network mediation, which allows you access to local ad networks. This will give you better fill and higher brand eCPMs
  • Look for local partnerships. Lot of developers in South Korea are looking to move out and can leverage your experience and help you in turn to distribute your app and also localize it for South Korea

InMobi is bullish about South Korea and we have some of the brightest people driving our developer products from Seoul. Talk to us to:

  • Distribute your apps via our multi-store publish platform
  • Mediation access to the top local networks in addition to our network for ad monetization
  • Action oriented analytics products for Freemium products

Data Sources: AppAnnie reports, Flurry stats

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