close
close

AppsFlyer Presents State of E-Commerce Report 2024

Posted on by darion

AppsFlyer today released the 2024 edition of its State of eCommerce App Marketing report. Tracking changes in consumer habits and marketing budgets, the study offers valuable insights into how the industry is evolving and the trends brands should leverage to drive key metrics during the upcoming peak shopping season, from app downloads to purchases.

As the global economy continues to stabilize, the growth prospects for mobile commerce look promising in the coming months, giving marketers an opportunity to cultivate and nurture customer loyalty. AppsFlyer research found that while only 1 in 10 consumers convert during peak seasons for iOS, nearly 60% convert to loyal customers after their first purchase. This underscores the influential role of the mobile app in driving engagement one year later, highlighted by a 60% increase in inorganic installs on iOS. The research revealed that marketers are tactically targeting the first week after install with remarketing activations, amplifying efforts on day one to achieve a 40% conversion rate and exceeding 75% in the first week.

Additionally, AppsFlyer analysis shows that consumer in-app purchases (IAP) surged during the 2023 holiday season — up 15% compared to Q4 2022 — and maintained a positive trajectory into 2024, with purchase volume up 21% compared to Q1 last year. At the same time, total advertising investment in 2023 increased to $6.6 billion, which could indicate improved trust in marketing.

Much of this market growth is centered around Apple iOS users. In Q4 2023, iOS users both drove a 60% year-over-year increase in non-organic (marketing-driven) app installs (NOI) and increased their IAP by 21% compared to 2022 — outperforming Android users’ equivalents of 21% and 9%, respectively. What’s more, Apple’s share of ad spend increased by 43% compared to 2023, while Android allocation decreased by 18%, underscoring the strong spending power of iOS users. These results indicate a greater determination by leading Asia-based companies to engage iOS users throughout the year, not just in the final quarter. While iOS campaigns are being driven globally by companies based in Asia, campaigns in several Western markets – the UK, US and France – disrupted typical seasonal sales patterns and delivered impressive results in Q2 and Q3 2023, including a 125% increase in NOI.

Key global findings from the State of E-Commerce 2024 report:

  • Consumer spending in apps increased 15% year-over-year in Q4 2023, with iOS users growing 21% and Android users growing 9%, confirming the predictable peak in consumer spending toward the end of each year.
  • Apple iOS users saw a 60% year-over-year increase in NOI in Q4 2023, while Android users saw a 21% increase in NOI due to a decline in cost per install (CPI).
  • Large Asian players accounted for 125% of iOS NOI growth in Q2 and Q3 2023, driven by marketing activities that disrupted seasonal iOS install patterns.
  • The first week of app download should be a priority for marketers, as the average user makes their first purchase 3.6 days after downloading the app. When it comes to remarketing, 40% of remarketing conversions happen on the first day, and over 75% within the first week. Total global app ad spend is expected to reach $6.6 billion in 2023, with iOS platforms leading the way at $2.9 billion despite a 15-20% device market share. Android saw an 18% drop in ad spend from 2022 to 2023, while iOS saw a solid 43% increase.

Key takeaways for the United States from the 2024 State of E-Commerce Report:

  • The United States has dominated the global stage compared to other regions, mainly due to higher cost of ownership (CPI) metrics.
  • Noticeable increase in the share of paying Android users in the peak season in 2023 to 7.71% compared to 4.77% in the same period in 2022.
  • The percentage of users paying for iOS apps rose to 9.85% during the 2023 holiday season, compared to 8.45% during the same period in 2022.

“The mobile eCommerce advertising landscape is undergoing a constant strategic adjustment. Our latest findings indicate that as the global economy stabilizes, brands in this space are firmly returning to paid marketing as a key means of acquiring users, rather than relying heavily on their own channels,” said Sue Azari, eCommerce Industry Leader at AppsFlyer. “This shift illustrates the dual impact of easing economic concerns and increasing pressure to differentiate themselves from competitors, particularly for new players in the space like Temu—both of which are driving increased spending by brands to promote shopping apps. As the 2024 holiday season approaches, brands looking to get noticed need to focus on remarketing and reap the long-term benefits of lasting loyalty.”