In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie.
The app economy will be worth $6 trillion in five years thanks to mobile commerce
More people are spending more time and — crucially — more money in apps.
Rani Molla was a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.
What explains the growth? More people are spending more time and — crucially — more money in apps.
While on average people aren’t downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the average app spend — including app-store purchases, advertising spend and, most importantly, commerce — to increase from $379 per person to $1,008 in 2021.
The 800-pound — or $6 trillion — gorilla in the room is mobile commerce. Purchases of goods and services through mobile apps represented 90 percent of the total app economy in 2016 and are expected to represent 95 percent in 2021.
Mobile commerce’s huge footprint includes purchases through retail behemoths like Amazon and Alibaba, as well as paying for services such as Uber rides or travel booked through a travel app — basically any monetary transaction through an app that holds your credit information. The assumption also relies on the continued transition from in-person purchases to ones done through apps.
Consumers buying apps and making in-app purchases as well as advertising revenue composed the other 10 percent or $134 billion of the app economy in 2016 and will represent 5 percent or $340 billion in 2021.
Not only is mobile commerce by far the biggest segment of the app economy, it’s also expected to have the biggest average annual growth rate at 39 percent. App store spending and advertising are expected to have average annual growth rates of 18 and 23 percent, respectively.
This article originally appeared on Recode.net.
