Mobile commerce, mobile advertising and mobile video are set to continue to dominate the digital economy in 2021 based on current habits, analysts predict.
2020 reshaped and redefined daily life — with working from home, social distancing, travel restrictions and digital connections becoming new norms as countries sought to contain the spread of COVID-19. Consumers hunkered down at home and turned to the world of mobile to stay connected, entertained and informed.
In 2021, App Annie, a leading mobile data and analytics company predicts, monthly active users for TikTok will pass the 1 billion mark, mobile to continue to drive ‘at-home’ activities, advertising spend in the mobile sphere will increase, and there will be a further consumer boom of streaming apps.
Extrapolating current data, App Annie expects TikTok to not only achieve a coveted spot in the 1 Billion monthly active users club, but to sail straight past to 1.2 billion. Other notable social members of this club include Facebook, WhatsApp, and WeChat.
However, as of Q3 2020, TikTok was the number two non-gaming app by consumer spend — a testament to the breadth and depth of engagement for its user base. While TikTok monetises through ads, it also allows users to transact in the app through sales of virtual gifts used for tipping streamers.
Video in the driving seat
TikTok’s success lies in the combination of user generated content, short looping videos and robust video editing tools. And it is video that is driving much of the trends seen in digital in 2021. According to the figures, consumers will install up to 85% more video streaming apps in 2021 from pre-COVID Levels.
To stand out, companies should capitalise on features that cater to today’s socially distant, “at-home” consumers to stand out and cultivate meaningful growth in engagement into 2021. For example, Disney+ launched GroupWatch, a shared viewing experience — which taps into the growing trend of streaming together, while apart. Something also seen in research by Studio.co.uk where shoppers in the UK are online shopping together using video calls.
As a result, App Annie expects features that enable socialising, connection and shared-experiences to be new priorities on roadmaps. Traditional video streaming providers need to monitor peripheral market movements — such as their cross-app usage with mobile-first, user generated short-form streaming apps like TikTok and Snapchat, especially for Gen Z.
M-commerce taps into video
Home will remain the epicentre of people’s social and working lives and mobile will drive a 43% acceleration in “at-home” activities, says the study. M-commerce: Will dominate the shopping experience with consumers continuing to rely on food delivery apps such as Uber Eats to bridge the gap between restaurants and staying home.
With tourism and hospitality hit hard by shelter-in-place policies, App Annie anticipates food delivery apps will be a cornerstone of restaurant strategies.
As a result, Mobile ad spend will reach $290 billion in 2021, says the research. In 2020, mobile advertising has bucked the trend and bolstered a level of resilience for digital ad spend overall. During H1 2020, mobile ad placements increased by 70% despite reduced budgets. Given mobile’s resiliency during the pandemic, App Annie expects advertisers to continue to allocate larger portions of their budget to mobile.
While the US presidential election has helped fuel mobile ad spend in the latter part of 2020, App Annie expects ad dollars to continue to flow to smartphones in 2021. Particularly given the consumer shift to mobile is not an isolated trend — COVID-19 catalysed the habits we were already forming.
Reaching $290 billion in mobile ad spend is still subject to performance from other parts of the advertising market. A large portion of this growth is expected to come from strong m-commerce growth and the further shift from offline advertising to digital — another mobile trend accelerated by 2020 — while OTT platforms have the potential to create headwinds from eating into mobile’s share of growth.