The truth behind the "prosperity" of apps is sad!

Which excavator manufacturer is the best? Go to Lanxiang in Jinan, Shandong. This slogan is extremely popular this year, and people are having a lot of fun playing with various jokes of "Which XX manufacturer is the best?" on social media.

So if you ask “Which Chinese APP is the best?” who should you look for?

As a typical representative of Internet products, apps have been growing and developing rapidly since 2009. According to data from January this year, the number of apps in the Android-based Google Play app store exceeded 1.4 million. According to data reported in July, the number of apps in the Apple AppStore has exceeded 1.5 million.

With the rapid popularization of smartphones and the massive growth of users in China in recent years, new apps have emerged one after another. Coupled with the favorable domestic entrepreneurial environment in the past two years, many entrepreneurs have also taken the App platform as the starting point for their entrepreneurship.

All these have brought about a "prosperity" in the App market. However, behind the apparent "prosperity" lies a sad truth.

1. Apps are born quickly and die quickly

Recently, iiMedia Research and Questionnaire released relevant survey data on the Chinese App market, which showed that the usage and retention rates of most downloaded Apps were relatively low, and "use once and throw away" has gradually become a behavioral trend among users. The proportion of users who "opened the App once" was 35%, and the proportion of "opened the App 10 times" was only 17.6%.

In addition, the average life cycle of a mobile app is only 10 months, and 85% of users will delete the downloaded app within one month. Competition in social apps is the most brutal, with a mortality rate of 35%.

These data do reflect the current situation of the App market: Apps face huge challenges in attracting users' long-term use and attention.

This has even become a vicious cycle. Many App products focus on immediate benefits, only focusing on the rapid accumulation of early users and making money, and not paying attention to the maintenance of users and the update and improvement of functions in the later stage. In addition, some App products are regarded as "short-term products" at the beginning of design, and do not consider much in function setting and long-term development, which seems aimless. Some Apps also move to another place after a success, and replace them with new ones when they fail.

In addition, users have to choose one from so many homogeneous apps to try, which means they will temporarily give up other similar apps. If the first use experience fails, then users will permanently abandon this app. Therefore, users will continue to experience and try new apps, and regularly clean up apps that they don’t like or will not use for a long time.

These phenomena make the App market look prosperous on the surface, but actually it is rather impetuous. “Born quickly, die quickly” has become a vicious cycle in the App market.

2. The App Market is Crowded, “Big and Comprehensive” Has No Chance to Win, “Small and Beautiful” Has a Chance to Win

Although data shows that by the third quarter of 2015, the number of Chinese mobile Internet users reached 668 million, and the number of smartphone users reached 609 million, and the number of Chinese mobile Internet users and smartphone users showed an overall growth trend, the fact that cannot be ignored is that the growth rate is showing a clear downward trend.

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This shows that China's smartphone ownership and scale have reached saturation and are beginning to stabilize, and the room for future growth will continue to shrink.

It also shows that in the relatively stable mobile space, as more apps continue to flood in, the already crowded app market will become even more crowded and the competition will become even more intense.

On the one hand, this will lead to increased competition and homogeneity among App products, and on the other hand, it will make innovation in App products difficult, but this will also force the emergence of more vertical and segmented App products.

For example, mobile apps will transition from large and comprehensive “all-round” apps to “personalized, customized single-function apps”, and more apps that focus on the ultimate experience of vertical users will appear.

3. To have stickiness, you need to meet the “essential needs of users”

In my previous article, "Who determines the success or failure of Internet products in the social media era?", I have analyzed in detail the three levels of user needs in the social media era: essential needs, ancillary needs, and marginal needs, and also analyzed the different functions and roles played by each level of needs in Internet products.

Among these three typical needs, essential needs are the core pull. If the essential needs of users cannot be met and only the subsidiary needs or marginal needs are discussed, the Internet product will have no foundation and may not be able to retain users for a long time. The more the essential needs of users are met, the less likely users will give up the product.

App products emerge in endlessly, but they also die in waves. The reason is that these products only meet ancillary or marginal needs, but these needs cannot really touch the user's pain points. Users come quickly and leave easily. Therefore, this kind of users coming quickly and leaving easily will also cause Apps to "live quickly and die quickly."

On the other hand, the reason why some apps “are born quickly and die quickly” can also be attributed to the fact that these apps did not think clearly about what user needs they should meet at the beginning of product design, or did not find the real pain points of the needs, so users have no reason to spend time on them for a long time.

According to the survey data of iiMedia Research, nearly half of the top 20 most popular apps are products that meet the "essential needs of users", and the rest are mostly products that can provide basic needs. This result also explains the above analysis to some extent.

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IV. The Matthew effect is obvious: BAT apps dominate the market, and small apps face challenges

Among the top 20 most popular apps, only Toutiao, Meitu, 360 Mobile Security, 360 Mobile Assistant, and Kugou Music are not in the BAT system. The remaining apps belong to Baidu, Alibaba, and Tencent.

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Moreover, among the apps in the fields of mobile social networking, mobile travel, mobile maps, mobile shopping, etc., app products that occupy a dominant or strong position in the market also mostly belong to BAT.

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This means that if App product entrepreneurs want to start a new business in these fields alone, they will face tremendous pressure and need to have strong marketing and market operation capabilities, otherwise they will be hit hard by competitors or eventually fall into the hands of BAT.

It seems that in the App market, the Matthew effect tends to be obvious. The strong will become stronger by relying on resources, financial strength and market control, while it will become very difficult for the weak to break through at the beginning.

Therefore, there are roughly three fates for apps:

1. Apps meet certain needs of most users, have good development momentum, and gradually become popular. However, if the business overlaps with BAT, it will be integrated, acquired, or strongly squeezed.

2. If the App product itself is not good or has insufficient user stickiness (for example, it has a wide range of functions, or does not understand user needs at all, or is a popular App that is popular for a short time, etc., which will make user stickiness very poor), then the life cycle will be relatively short. In the end, it will be half-dead and become a dispensable chicken rib.

3. App products take a different approach to meet the personalized needs of niche users and dig deep in a small range. They may not be able to become a big player in the end, but they have fixed users and can be self-sufficient.

In addition, the vertical integration of the App itself also faces challenges. For example, upgrading the old system of the App and then integrating the existing database architecture with the new mobile technology on different platforms is a troublesome task that requires a lot of time, energy and even financial resources.

Vertical integration means that after an App is released, it must be constantly updated and iterated to match the technical requirements and settings of different platforms and to bring new changes in experience to users.

Therefore, App startups will not only face challenges in horizontal resource integration and market operations, but also difficulties and constraints in vertical integration.

5. Apps in different fields: Multiple Apps and Serious Differentiation

The Matthew effect in the App field and the fierce living environment will lead to the development of App product entrepreneurship in the future towards more segmented and verticalized development. This also means that if App wants to survive, it must constantly seek micro-innovations in functions, experience, and models, and the user needs in vertical fields will be explored more and more deeply and further refined in the vertical direction.

Therefore, in the niche areas that BAT will not or is unwilling to get involved in, there is still a lot of room for entrepreneurial apps to grow. Therefore, there will be a situation where there are many apps in the niche areas and there is a serious differentiation. For example, in the fields of mobile music, women's fashion, early childhood education, etc., there are many apps with comparable strengths. Although there are leaders among these apps, each one is not much inferior, and they share the market together.

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In addition, in areas such as weather information, local life, and mobile photo editing, the differentiation of apps is also quite obvious.

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Therefore, in these segments, there are still great development opportunities for apps from smaller backgrounds, and they have the chance to stand out. But at the same time, they will also face many strong competitors of similar level, and they will also have to withstand more competition from the continuous influx of new app products in these fields. It is really difficult to move forward.

Today, the entrepreneurial dividends of the App market have passed. In the ever-changing market, entrepreneurs face many uncertainties. More importantly, it has become more difficult to split and identify user needs, and it is not something that can be achieved by just talking.

Therefore, if you want to dig deep into the vertical market, you should first understand the target users in a down-to-earth and practical way! Don’t just think you are good, but ask the users whether they really need you and why they need you.