Mobile Market Insight: Russia

Today, we look at Russia’s mobile market.  By land mass, Russia is the largest country in the world, nearly twice the size of Canada, stretching over 17 million square kilometers.  With a population just over 143 million people, it ranks 9th in overall world population according to wikipedia.  Alternatively, you might take the CIA Factbook’s figure of 142,500,482 as a more authoritative source.  A little humor never hurts… I hope.

Russia

Russia is a largely homogenized population where just about everyone speaks Russian, unlike Ukraine, South Africa and a few other countries with more than one official or semi-official language.   In addition to Russia, large portions of the populations of Ukraine, Belarus, Tajikistan, Kyrgystan, Moldova speak Russian.  Additional countries formerly part of the Soviet Union still have a significant, but steadily eroding understanding of Russian, too.   RussianLanguageMap

Each year, more and more people who grew up under the Soviet Union pass away and more are born into countries speaking their traditional, native language (i.e. Ukrainian, Lithuanian, etc).  This is an important dynamic for developers able to localize for the Russian language, suffice that each country (and region) deserves its own research.

According to the WorldBank, there are 184 mobile devices in use for every 100 people in Russia.   Essentially, most people have 2 or even 3 mobile devices, but we can consider mobile penetration to be close to 90%.   Even President Putin recently admitted to not owning a mobile phone.

The core consideration for mobile marketing in Russia, as with many countries, is the credit card distribution and access to alternative payment systems.  Of special interest in this area is MasterCard’s Mobile Readiness Report on Russia.  Their report indicates that 24% of Russia’s mobile users are familiar with making mobile payments compared to the global average of 16%.   Several mobile providers have mobile payment options – MTS, Beeline, Megafon, Tele2, among others.  Numerous other companies, including banks are jumping into the mobile payment scene in Russia, too.

Consequently, while everyone in Russia may not have a Visa or Mastercard, odds are pretty high that almost all Russian mobile users have access to some form of online payment.

There’s ample opportunity for English and Russian-speaking developers to collaborate in adapting products to their respective markets.   Joint efforts could be facilitated through limited liability companies, among a wide range of other arrangements to cover joint access to payment systems.  Needless to say, this requires doing your own research and developing good relationships, but it remains surprising how much of this is not happening, as yet.

So, in the world of premium and freemium apps – Russia stands out as one of the best markets by virtue of the size of its mobile population, common language and mobile payment options.   The question then, is whether your app is priced for the market?   Where in the United States and Western Europe, average incomes range in the $40-50k yearly bracket, average wage in Russia is about $14,000.   This needs to be considered in your pricing strategy.

As most know, Russia’s currency is measured in rubles.  As of today, December 2, 2013, 1 Ruble = $.030 US Dollar, or $1.00 = about 33 Rubles.   Premium pricing for the Russian mobile app market needs to take this into consideration just like any other company engaging in an international market.

All things considered then, when looking at the demographic breakout of your target market, odds are you will be looking at males and females within the 15-24 and 25 – 54 age brackets; more if you are looking at free distribution of your app.   This amounts to about 83 million people with roughly 90% mobile penetration meaning a total audience of over 74.5 million end users.

On this 74.5 million end users, you have several things to factor above and beyond payment system, irrelevant if your app is free:

  1. Reach of your marketing and advertising venues
  2. End User’s Mobile Platform
  3. Approximate interest in App genre (game, business, travel, education, etc.)

One site you will find useful for getting some approximation of mobile platform usage, and other good statistics, is Statcounter.com – simply as most of you won’t have access to proprietary systems.   Here, you will see that Android is the dominant force in Russia’s mobile market – quite nearly 50%.   Despite the hubbub with Apple, iOS still claims a 29% share of the market (though it did drop to 11.3% last month).   Others, like Symbian, Windows and Samsung hold sliver shares, too.

An Android Developer could then have a potential audience of 37 million end users.  From here, you assess what portion might be interested in your specific app – whether 1% or 20%.  This provides you an upper ceiling upon what you can expect with your app.  It is no guarantee that your app will perform that well, suffice that there is a big difference between a target market for a Windows Phone business utility app with a maximum field of 500,000 users vs. an Android game with perhaps 10 million users.

This is not scientific, you have to get the best numbers you can and do the research.  This at least gets you closer to realistic expectations.

Once you have defined your target market, there is the matter of reaching them.  No single advertising venue has 100% reach.   We’ve addressed this at significant length in past articles, suffice that you need to consider mobile use bell curves.  This single point, that some users are constantly using their mobile device making them easier to reach than others who seldom use their phone for anything but a phone call – is perhaps more important than any other marketing component.   This makes it easier to reach the 4% super-user group across multiple advertising venues.   Opera is very strong in the Russian market, if you are looking to launch your app to Russian end users — you’re in the right place.

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Project Manager at the Opera Mobile Store providing Sales-Marketing support. Content development and research.

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