Social App Spending to Reach $17.2B by 2025 | Livestream Commerce

Livestreaming Fuels Creator Economy Growth

A recent forecast indicates substantial growth in consumer spending within social applications, driven largely by the increasing popularity of livestreaming. It is estimated that $6.78 billion will be spent by consumers on social apps in 2021.

Projected Spending Increase

According to data from App Annie, this figure is projected to reach $17.2 billion annually by 2025. This represents a compound annual growth rate (CAGR) of 29% over the five-year period.

Lifetime Spend in Social Apps

By 2025, the cumulative total expenditure within social apps is anticipated to reach $78 billion, as reported by the firm.

Evolution of Monetization

Initially, the livestreaming economy relied heavily on one-time purchases, such as digital sticker packs. However, current trends show consumers are increasingly gifting content creators directly during live broadcasts.

Significant Donations

These donations can be substantial; Twitch streamer ExoticChaotic, for example, received $75,000 during a Fortnite livestream, marking one of the largest donations ever recorded on the platform.

Furthermore, App Annie highlights that Bigo Live enables broadcasters to earn up to $24,000 monthly through their livestreams.

Livestreaming as a Key Driver

Apps featuring prominent livestreaming capabilities are currently responsible for the majority of consumer spending within the social app landscape. During the first half of the year, approximately $3 out of every $4 spent in the top 25 social apps originated from platforms offering livestreaming.

Regional Spending Leaders

The United States emerged as the leading market for consumer spending within social apps during the first half of 2021. Spending in the U.S. was 1.7 times greater than that of Japan, the next largest market, and accounted for 30% of total global spending.

Top 5 Markets

China, Saudi Arabia, and South Korea completed the top five markets in terms of consumer expenditure.

Benefits for Platforms and Creators

Both content creators and the platforms themselves are experiencing financial benefits from the livestreaming economy. Platforms are also seeing increased user engagement, such as time spent within the app, beyond just commission-based revenue.

TikTok's Growth

TikTok is a prime example of an app significantly benefiting from this trend.

Surpassing YouTube

Last year, TikTok surpassed YouTube in both the U.S. and the U.K. in terms of average monthly time spent per user. It continues to lead in the U.S. market and maintains a more decisive lead in the U.K.

Regional Performance of TikTok

In South Korea and Japan, TikTok is gaining traction, but YouTube still holds a significant lead. Specifically, YouTube leads by a factor of 2.5x in South Korea.

Overall Time Spent in Social Apps

During the first half of 2021, consumers spent a total of 740 billion hours in social apps, representing 44% of all time spent on mobile devices globally. This figure has consistently increased over the years, with a 30% growth rate in the first half of 2021 compared to the same period in 2018.

Shift Towards Video and Livestreaming

Apps offering livestreaming are currently outperforming those focused on chat, photos, or videos. This trend is driving companies like Instagram to shift their focus, even declaring they are “no longer a photo sharing app.”

Growth in Livestreaming Apps

The combined time spent in the top five social apps emphasizing livestreaming is projected to exceed half a trillion hours on Android devices alone this year, excluding China. This represents a CAGR of 25% compared to 15% for apps in the Chat and Photo & Video categories.

Asia-Pacific Region Dominance

The Asia-Pacific region now accounts for 60% of the time spent in social apps, largely due to growth in India. The gap between India and China has narrowed from 115% in 2018 to just 7% in the first half of 2021.

Social App Download Growth

Social app downloads are also increasing, fueled by the growth of livestreaming.

Total Downloads and Growth

To date, consumers have downloaded social apps 74 billion times, with strong demand continuing. 4.7 billion downloads occurred in the first half of 2021 alone, representing a 50% year-over-year increase.

Regional Download Leaders

Asia was the largest region for social app downloads in the first half of the year, accounting for 60% of the market. India led by a factor of 5x, surpassing the U.S. in 2018, followed by the U.S., Indonesia, Brazil, and China.

Shifting App Preferences

The rise of livestreaming and video is influencing the types of apps consumers are downloading.

Facebook's Declining Dominance

A historical chart of top global apps reveals Facebook’s diminishing dominance. While Facebook’s apps (Facebook, Messenger, Instagram, and WhatsApp) have consistently held top positions, TikTok rose to number one last year and continues to maintain that ranking in 2021.

Video Editing Apps Gain Traction

Furthermore, video editing apps are now surpassing apps previously focused on photos or chat.

Top Apps by Spending and Time Spent

Video apps, including YouTube (#1), TikTok (#2), Tencent Video (#4), Bigo Live (#5), and Twitch (#6), now rank among the top global apps by consumer spending in the first half of 2021.

YouTube's Continued Lead in Time Spent

However, YouTube (#1) still leads in time spent compared to TikTok (#5), with Facebook’s apps (Facebook, WhatsApp, and Instagram) holding the next three positions.

TikTok's Video Length Expansion

This may explain TikTok’s recent exploration of allowing longer videos, increasing the limit from 3 to 5 minutes.

Additionally, due to livestreaming’s impact on engagement, TikTok is heavily investing in new features for its TikTok LIVE platform, including events, co-host support, Q&A sessions, and a more prominent “LIVE” button.

Platform-Specific Impacts

App Annie’s report also details the impact of livestreaming on specific platforms, such as Twitch, which doubled its monthly active user base since before the pandemic, and Bigo Live, which generated $314.2 million in consumer spending during the first half of 2021.

Key Takeaway

“The ability of social media users to communicate with each other using live video – or watch others’ live broadcasts – has not only maintained the growth of a social media app market, but contributed to its exponential growth in engagement metrics like time spent, that might otherwise have saturated some time ago,” stated Lexi Sydow, Head of Insights at App Annie.

The full report is available here.