Consumers splashed over $3 billion in social apps in H1 2021, 50% more than 2020

Over the recent years, the number of social applications has surged, catering to various needs and niches. This has resulted in more users utilizing these apps and consequently spending more. 

Data presented by Burga indicates that consumers globally spent a whopping $3.23 billion in social applications during the first half of 2021. The spend represents a growth of 50.23% compared to the same period last year when the amount stood at $2.15 billion. Between the period, Q1 2021 represented the highest spending at $1.62 billion. 

The data on spending is a combination of apps both on the iOS and Google Play platforms entailing social, social networking and communication categories. The spend is gross inclusive of the percentage taken by the app stores.  

Elsewhere, during Q2 2021, consumers cumulatively spent $22.19 billion on social apps. The figure represents a growth of 7.8% from the $20.58 billion spent as of Q1 2021. Overall, the spending has steadily grown by a staggering 44,280% between Q1 2011 and Q2 2021. The data on social app spending is provided by applications analytics platform App Annie.

Drivers for increased social apps spending 

The increase in social app spending highlights the status of the creator economy that has gained prominence in recent years. Creators are leveraging increased social apps connections and engagements to monetize their work with consumers willing to spend more inspired by compelling content.

Worth mentioning is that social apps have continued to utilize the opportunity of increased users to expand engagement into direct spending and shopping behaviors, facilitating new revenue potential for the platforms and creators. 

Notably, the spending reflects the app economy that skyrocketed from last year due to the coronavirus pandemic. With countries imposing lockdowns, most people leveraged social apps as an alternative form of entertainment During the period social apps like Tinder have been one of the largest drivers of growth in consumer spending during the pandemic.

The growth in the application economy is highlighted by the number of publications on platforms like the Apple App Store. According to our previous research, as of September 5, 2021, the average number of apps published on the Apple App Store per day was 988. The figure translates to an estimated 355,680 apps per year. With a significant number of apps getting published daily, it is likely that social apps will sustain the spend as players in the sector continue to develop apps that meet consumer needs and fix existing shortcomings. 

With the pandemic accelerating change in consumer behaviour and the introduction of new practices like remote working, consumers are likely spending more on communication platforms like LinkedIn in search for respective jobs. The platform that offers free and paid versions presents several opportunities to users after online networking, which has become a critical part of hiring amid the pandemic. 

Additionally, live streams are also helping to drive spending in social apps. The spending is driven by factors like virtual gifting, with content creators generating significant amounts of money from in-stream virtual gifts. 

The time spent on these apps has accelerated both depth and breadth of engagement. At the center of this, apps that promote short-video, authentic content, and live streaming have emerged as pillars to cultivating deep engagement, driving growth in money spent. Video content has become significant in putting the media format at the forefront of the evolving social landscape. 

Furthermore, it's worth noting that free apps like Facebook and TikTok dominate the social app landscape. For the apps, monetization is mainly reliant on the advertisement. However, others like Telegram offer premium features to supplement free packages. 

The future of social app spending 

Additionally, with the increasing penetration of 5G technology, spending on social apps is likely to grow. The technology supports aspects such as cloud streaming backed by high speed and faster device charging time that is essential for elements such as smooth live streaming.

Although the social apps spending by consumers is projected to keep growing, companies must remain innovative to keep users engaged. With the scene facing significant competition from emerging platforms, users need to find compelling content for them to spend money and time on the preferred apps.