App Annie: TikTok, ‘at-home’ activities, advertising and streaming apps will be the winners in 2021

Mobile data and analytics platform, App Annie, 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.

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.

What will be the effects on consumer bahaviour going into 2021?

TikTok tips 1.2 billion average monthly active users in 2021

TikTok has seen sharp growth in active users by amassing a sizable global footprint in 2020 — nearly tripling in size since 2018. In 2021, 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.

As of Q3 2020, TikTok was the #2 non-gaming app by consumer spend — a testament to the breadth and depth of engagement for its user base. Whilst TikTok monetises through ads, it also allows users to transact in the app through sales of virtual gifts used for tipping streamers. TikTok’s success lies in the combination of user-generated content, short looping videos and robust video editing tools.

Other notable social members of this club include Facebook, WhatsApp, and WeChat.

Home will remain the epicenter of our social and working lives

In 2021, “at-home” activities will dominate — with mobile taking over a greater share of our lives in facilitating these activities. Time spent in key “at-home” categories is expected to top 1.3 trillion hours on Android phones alone in 2021.

  • Business and Education: Poised to see a 4-year CAGR of 57% and 62% in 2021, which is fuelled by the continued growth in collaboration and video conferencing apps like ZOOM Cloud Meetings.
  • M-commerce: Will dominate our shopping experience. Consumers will continue to rely on food delivery apps like Uber Eats to bridge the gap between restaurants and staying home. With tourism and hospitality hit hard by shelter-in-place policies. It follows that food delivery apps will be a cornerstone of restaurant strategies.
  • Finance: Economic uncertainty propelled adoption of finance apps during the first waves of COVID-19. Finance apps — including retail banking and fintech providers — will continue to drive adoption into 2021 as consumers turn to their most trusted devices for peer to peer payments, banking and investing. Total time in banking apps globally will surpass 31 billion hours annually on Android phones in 2021F, representing a 4-year CAGR of 35%.
  • Fitness: At-home fitness apps have surged in demand, and companies with a core mobile focus like Peloton saw phenomenal growth in revenue. Home fitness also looks like a cert for growth throughout 2021.

 

Mobile ad spend will reach $290 Billion in 2021 

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 we can expect 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, Ad dollars wiil 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.

Consumers will install up to 85% more video streaming apps in 2021

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.

Disney+ launched GroupWatch, a shared viewing experience — which taps into the growing trend of streaming together, while apart. 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.