SEA becomes a 'fintech hothouse' for apps, but re-engagement falls behind

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The mobile finance sector is seeing an acceleration in Southeast Asia, with overall installs of fintech apps more than doubling from January to December 2021 for Android apps. According to a report by AppsFlyer, SEA's mobile-first markets are home to millions upon millions of unbanked or underbanked users, making it "the perfect fintech hothouse".

In Southeast Asia, consumers previously unfamiliar with financial and mobile technologies were compelled to buy goods and services online for the first time during the pandemic, drawing them into the world of mobile and digital payments.

After a dip in marketing investment, SEA went back into high gear in 2021. Non-organic installs swelled even faster than that of organic installs as a whole, the report stated. March and December were prime months for non-organic installs, with month-over-month uplifts of between 20% to 40% in March and 12% to 15% in December last year.

appsflyer non organic app installed

In SEA, Indonesia made up a lion's share of the region's advertising market in finance at close to 60%.

This could be due to Indonesia being the region's largest economy, with a young, digital underbanked population with high mobile penetration. Intense and rising competition, also means that players could do well by expanding to less underserved markets, the report said. Meanwhile, Thailand and Malaysia are two other markets whose spend growth could also outperform that of their regional peers based on their current level of ad spend when compared with relative market size.

appsflyer android app install ad spend

Re-engagement rises in importance with loyalty at a low

Retention rates have remained low across the region, highlighting an importance for re-engagement with users.

The report found an average of less than 1.5% in retained Android users on day 30. Retention rates were found to be highest during the first quarter last year and dipped to its lowest in the third quarter. On the other hands, iOS retention rates were several times higher than Android. While best in Singapore, retention rates were worryingly low for Thailand, where 30-day retention rates for Android can dip to even below 1%.

In markets such as Thailand, Philippines and Indonesia, the largest drops in number of users tend to occur between day one and three and between day 14 and 30, especially in emerging markets that already suffer from low retention rates.

Shopping seasons encourages in-app spending

Generally, in-app purchases rose throughout 2021, as the pandemic continued to drive user growth and more consumers dialed up mobile spending. In-app purchases across most of the region, notably Indonesia, Singapore and the Philippines, culminated in the fourth quarter last year, coinciding with major shopping seasons such as Singles Day in November and gift shopping ahead of Christmas.

One market outlier was Thailand, where in-app purchases spiked in April and May due partly to the “Splash Sales” promotions of Songkran. A severe wave of COVID-19 driven by the Alpha variant also affected Thailand during that period, and may have also contributed to the rise in in-app purchases. Similarly, the Tet and Lunar New Year seasons were catalysts in Vietnam and Malaysia respectively.

appsflyer in app revenue

The report also found that the proportion of paying users for iOS more than doubled that of Android, at nearly 15% by end of last year. Android’s share of paying users surged by 50% in August across the region, while iOS’s share rose by about 33%. This could be owing to end-of-year shopping seasons such as Christmas, the share of paying users was high in the fourth quarter for countries such as Thailand, Philippines, Vietnam and Indonesia. Paying users peaked in April for Malaysia and Vietnam and August for Singapore.