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Google delays mandating Play Store’s 30% cut in India to April 2022

Google is postponing the enforcement of its new Play Store billing policy in India to April 2022, days after more than 150 startups in the world’s second largest internet market forged an informal coalition to express concerns over the 30% charge the Android-maker plans to mandate on its store and started to explore an alternative marketplace for their apps.

The company, which is going live globally with the new Play Store rule in September 2021, is deferring the enforcement of the policy only in India, it said. It is also listening to developers and willing to engage to allay their concerns, it said.

“We are setting up listening sessions with leading Indian startups to understand their concerns more deeply. We will be setting up Policy Workshops to help clear any additional questions about our Play Store policies. And we’re also extending the time for developers in India to integrate with the Play billing system, to ensure they have enough time to implement the UPI for subscription payment option that will be made available on Google Play — for all apps that currently use an alternative payment system we set a timeline of 31st March 2022,” said Purnima Kochikar, Director of Business Development of Games & Applications at Google Play, in a statement.

“We have always said developers should have a choice in how they distribute their apps, and that stores should compete for consumers’ and developers’ business,” she added.

Last week, Google said it would no longer allow any apps to circumvent its payment system within the Play Store. The move, pitched by Google as a “clarification” of its existing policy, would allow the company to ensure it gets as high as a 30% cut on in-app purchases made through Android apps operating in a range of a categories.

Google’s announcement today is a direct response to the loudest scrutiny it has received in a decade in India — its biggest market by users but also a place where, compared to Western markets, it generates little revenue. More than 150 startups in India last week formed an informal coalition to fight the company’s strong hold on Indian app ecosystem. Google commands 99% of the smartphone market in India, according to research firm Counterpoint.

Among the startups that have expressed concerns over Google’s new policy are Paytm, India’s most valuable startup, payments processor Razorpay, fantasy sports firm Dream11, social network ShareChat, and business e-commerce IndiaMART.

More than 50 Indian executives relayed these concerns to India’s Ministry of Electronics and Information Technology over a video call on Saturday, according to three people who attended the call.

Several businesses in India have long expressed concerns with the way Google has enforced its policies in India, but the matter escalated last month after the company temporarily pulled Paytm app from the Play Store for promoting gambling.

Google said Paytm had repeatedly violated its policies, and the company’s Play Store has long prohibited apps that promote gambling in India. Google has sent notices about warnings over gambling to several more firms in India in recent weeks.

A senior industry executive told TechCrunch that the company should have expressed these concerns months before the popular cricket tournament IPL was scheduled to commence. Fantasy sports apps allow users to pick their favorite players and teams. These players stand to win real money or points that they can redeem for physical goods purchase based on the real-world performance of their preferred teams and players. IPL season sees a huge surge in popularity of such fantasy sports apps.

“The IPL even got delayed by months. Why did Google wait for so long? And why does the company have a problem with so-called gambling in India, when it permits such activities in other markets? The Indian government has no problem with it,” the executive said, requesting anonymity.

Paytm mini app store

Paytm on Monday announced its own mini-app store featuring several popular services including ride-hailing firm Ola, health care provides 1mg and Practo, fitness startup Cure.fit, music-streaming service Gaana, car-rental provider Zoomcar, Booking.com, and eateries Faasos, Domino’s Pizza, and McDonald’s. The startup claimed that more than 300 firms have signed up for its mini store and that its app reaches more than 150 million users each month. (In a written statement to TechCrunch, Paytm said in June its app reached more than 50 million users in India each month.

Paytm, which says its mini-app store is open to any developer, will provide a range of features including the ability to support subscriptions and one-step login. The startup, which claims  said it will not charge any commission to developers for using its payments system or UPI payments infrastructure, but will levy a 2% charge on “other instruments such as credit cards.”

“There are many challenges with traditional mobile apps such as maintaining multiple codebases across platforms (iOS, Android or Web), costly user acquisition and requirement of app release and then a waiting period for user adoption for any change made in the app. Launching as a Mini Apps gives you freedom from all these hassles: implying lesser development/testing and maintenance costs which help you reach millions of Paytm users in a Jiffy,” the Indian firm said in its pitch.

The launch of a mini-store further cements Alibaba-backed Paytm’s push into turning itself into a super-app. Its chief rivals, Walmart-backed PhonePe and Google Pay, also operate similar mini stores on their apps.

Whether Paytm’s own mini app store and postponement of Google’s new Play Store policy are enough to calm other startups’ complaints remain to be seen. PhonePe is not one of the mini apps on Paytm’s store, a Paytm spokesperson told TechCrunch.

“I am proud that we are today launching something that creates an opportunity for every Indian app developer. Paytm mini app store empowers our young Indian developers to leverage our reach and payments to build new innovative services,” said Vijay Shekhar Sharma, co-founder and chief executive of Paytm, in a statement.

Fortnite for Android just got axed from the Google Play Store too

After Epic Games picked a fight with Apple over the sizable chunk of fees the company takes on transactions in its mobile ecosystem, it looks like the Fortnite developer will be waging a war on two fronts.

Epic added a direct payment option to its mobile game early Thursday, prompting Apple to remove Fortnite from the App Store. Now, the Android version of Fortnite has gone missing from Google’s own app marketplace too.

In a statement, Google defended the decision to remove Fortnite for breaking its platform rules:

The open Android ecosystem lets developers distribute apps through multiple app stores. For game developers who choose to use the Play Store, we have consistent policies that are fair to developers and keep the store safe for users. While Fortnite remains available on Android, we can no longer make it available on Play because it violates our policies. However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play.

While Epic’s legal filing and in-game spoof of Apple’s iconic 1984 commercial make for a flashy fight, it’s not Epic’s first tangle over the mobile version of Fortnite. The company actually decided to keep Fortnite out of the Google Play Store back in 2018 over complaints very similar to its current crusade against the 30% cut that Google and Apple take from sales in their app stores. Fortnite is free-to-play, but players buy seasonal passes that unlock its progression system as well an in-game cosmetic items like skins that make Epic a ton of money and don’t affect gameplay.

Update: Epic has apparently filed a parallel suit against Google, citing the company’s old “Don’t be evil” mantra and alleging that the company violated antitrust rules by “using its size to do evil upon competitors.”

When Epic gave in and brought Fortnite back to the Google Play Store this April, it did so with a statement condemning Google’s treatment of apps outside of its own app marketplace. While all apps in Apple’s iOS come from the App Store, Google actually does allow apps like Fortnite to be sideloaded outside of Google Play, but the experience is generally less smooth and accompanied with warnings about malware.

“Google puts software downloadable outside of Google Play at a disadvantage, through technical and business measures such as scary, repetitive security pop-ups for downloaded and updated software, restrictive manufacturer and carrier agreements and dealings… Because of this, we’ve launched Fortnite for Android on the Google Play Store,” an Epic Games spokesperson said in April.

Fortnite is still available on Android, just not through Google’s app store. On its website, Epic points players to a direct download via QR code and the game is also available through Samsung’s Galaxy Store on supported devices.

Opera and the firm short-selling its stock (alleging Africa fintech abuses) weigh in

Internet services company Opera has come under a short-sell assault based on allegations of predatory lending practices by its fintech products in Africa.

Hindenburg Research issued a report claiming (among other things) that Opera’s finance products in Nigeria and Kenya have run afoul of prudent consumer practices and Google Play Store rules for lending apps.

Hindenburg — which is based in NYC and managed by financial analyst Nate Anderson — went on to suggest Opera’s U.S. listed stock was grossly overvalued.

That’s a primer on the key info, though there are several additional shades of the who, why, and where of this story to break down, before getting to what Opera and Hindenburg had to say.

A good start is Opera’s ownership and scope. Founded in Norway, the company is an internet services provider, largely centered around its Opera browser.

Opera was acquired in 2016 for $600 million by a consortium of Chinese investors, led by current Opera CEO Yahui Zhou.

Two years later, Opera went public in an IPO on NASDAQ, where its shares currently trade.

Web Broswers Africa 2019 Opera

Though Opera’s web platform isn’t widely used in the U.S. — where it has less than 1% of the browser market — it has been number-one in Africa, and more recently a distant second to Chrome, according to StatCounter.

On the back of its browser popularity, Opera went on an African venture-spree in 2019, introducing a suite of products and startup verticals in Nigeria and Kenya, with intent to scale more broadly across the continent.

In Nigeria these include motorcycle ride-hail service ORide and delivery app OFood.

Central to these services are Opera’s fintech apps: OPay in Nigeria and OKash and Opesa in Kenya — which offer payment and lending options.

Fintech focused VC and startups have been at the center of a decade long tech-boom in several core economies in Africa, namely Kenya and Nigeria.

In 2019 Opera led a wave of Chinese VC in African fintech, including $170 million in two rounds to its OPay payments service in Nigeria.

Opera’s fintech products in Africa (as well as Opera’s Cashbean in India) are at the core of Hindenburg Research’s brief and short-sell position. 

The crux of the Hindenburg report is that due to the declining market-share of its browser business, Opera has pivoted to products generating revenue from predatory short-term loans in Africa and India at interest rates of 365 to 876%, so Hindenburg claims.

The firm’s reporting goes on to claim Opera’s payment products in Nigeria and Kenya are afoul of Google rules.

“Opera’s short-term loan business appears to be…in violation of the Google Play Store’s policies on short-term and misleading lending apps…we think this entire line of business is at risk of…being severely curtailed when Google notices and ultimately takes corrective action,” the report says.

Based on this, Hindenburg suggested Opera’s stock should trade at around $2.50, around a 70% discount to Opera’s $9 share-price before the report was released on January 16.

Hindenburg also disclosed the firm would short Opera.

Founder Nate Anderson confirmed to TechCrunch Hindenburg continues to hold short positions in Opera’s stock — which means the firm could benefit financially from declines in Opera’s share value. The company’s stock dropped some 18% the day the report was published.

On motivations for the brief, “Technology has catalyzed numerous positive changes in Africa, but we do not think this is one of them,” he said.

“This report identified issues relating to one company, but what we think will soon become apparent is that in the absence of effective local regulation, predatory lending is becoming pervasive across Africa and Asia…proliferated via mobile apps,” Anderson added.

While the bulk of Hindenburg’s critique was centered on Opera, Anderson also took aim at Google.

“Google has become the primary facilitator of these predatory lending apps by virtue of Android’s dominance in these markets. Ultimately, our hope is that Google steps up and addresses the bigger issue here,” he said.

TechCrunch has an open inquiry into Google on the matter. In the meantime, Opera’s apps in Nigeria and Kenya are still available on GooglePlay, according to Opera and a cursory browse of the site.

For its part, Opera issued a rebuttal to Hindenburg and offered some input to TechCrunch through a spokesperson.

In a company statement opera said, “We have carefully reviewed the report published by the short seller and the accusations it put forward, and our conclusion is very clear: the report contains unsubstantiated statements, numerous errors, and misleading conclusions regarding our business and events related to Opera.”

Opera added it had proper banking licenses in Kenyan or Nigeria. “We believe we are in compliance with all local regulations,” said a spokesperson.

TechCrunch asked Hindenburg’s Nate Anderson if the firm had contacted local regulators related to its allegations. “We reached out to the Kenyan DCI three times before publication and have not heard back,” he said.

As it pertains to Africa’s startup scene, there’ll be several things to follow surrounding the Opera, Hindenburg affair.

The first is how it may impact Opera’s business moves in Africa. The company is engaged in competition with other startups across payments, ride-hail, and several other verticals in Nigeria and Kenya. Being accused of predatory lending, depending on where things go (or don’t) with the Hindenburg allegations, could put a dent in brand-equity.

There’s also the open question of if/how Google and regulators in Kenya and Nigeria could respond. Contrary to some perceptions, fintech regulation isn’t non-existent in both countries, neither are regulators totally ineffective.

Kenya passed a new data-privacy law in November and Nigeria recently established guidelines for mobile-money banking licenses in the country, after a lengthy Central Bank review of best digital finance practices.

Nigerian regulators demonstrated they are no pushovers with foreign entities, when they slapped a $3.9 billion fine on MTN over a regulatory breach in 2015 and threatened to eject the South African mobile-operator from the country.

As for short-sellers in African tech, they are a relatively new thing, largely because there are so few startups that have gone on to IPO.

In 2019, Citron Research head and activist short-seller Andrew Left — notable for shorting Lyft and Tesla — took short positions in African e-commerce company Jumia, after dropping a report accusing the company of securities fraud. Jumia’s share-price plummeted over 50% and has only recently begun to recover.

As of Wednesday, there were signs Opera may be shaking off Hindenburg’s report — at least in the market — as the company’s shares had rebounded to $7.35.

Chinese apps are losing their hold on India to local developers

Apps from Chinese developers have been gaining popularity on Indian app stores for sometime. Last year, as many as 44 of the top 100 Android apps in India were developed by Chinese firms.

But things have changed this year as local developers put on a fight. According to app analytics and marketing firm AppsFlyer, Indian apps as a whole have recaptured their original standing.

41% of top 200 apps in Indian editions of Google’s Play Store and Apple’s App Store in Q2 and Q3 this year were developed by Indian developers and local firms, up from 38% last year, the report said. Data from App Annie, another research firm, corroborates the claim.

“This uptick happened chiefly at the expense of Chinese apps, which fell from their lead position to 38% from 43% in 2018. Altogether, Chinese and Indian apps make up almost four-fifths (79%) of the list,” the report said.

The shift comes as scores of Indian firms have launched payments, gaming, news, and entertainment apps in the last year and a half, said AppsFlyer, which analyzed 6.5 billion installs in the second and third quarters of this year.

But Chinese developers are not giving up and continue to maintain an “impressive” fight in each category, the report said.

India — which is home to more than 450 million smartphone users and maintains relatively lax laws to support an open market — has naturally emerged as an attractive battleground for developers worldwide.

Many Chinese firms including Xiaomi and ByteDance count India as one of their largest markets. TikTok app has amassed over 200 million users in India, for instance. Xiaomi, which leads the Indian smartphone market, is quickly building a portfolio of services for users in India. It launched a lending app in the country earlier this month.

Gaining traction among first time internet users, most of whom have lower financial capacity, can prove challenging. Those developing travel apps had to spend about 170 Indian rupees ($2.4) for each install, for instance. Food and drink app makers spent 138 Indian rupees ($1.9) per install during the aforementioned period, while games cost 13.5 Indian rupees.

Data from @AppsFlyer state of App Marketing 2019 India – key highights:
– Indian Apps claimed more installs in 2019 vs chinese Apps
– Apps in finance category spent the most in non-organic install (easy to guess which ones)
– As a result, finance Apps saw 59% uninstall on Day 1 pic.twitter.com/ROADpk9VQK

— Deepak Abbot (@deepakabbot) December 23, 2019

Despite the marketing spends, retention rate for these apps was 23.4% on day 1, a figure that plummeted to 2.6% by the end of the month. (This is still an improvement over retention rates of 22.8% on day 1, and 2.3% on day 30 last year.)

Indonesia unblocks Tumblr following its ban on adult content

Indonesia, the world’s fourth largest country by population, has unblocked Tumblr nine months after it blocked the social networking site over pornographic content.

Tumblr — which, disclaimer, is owned by Oath Verizon Media Group just like TechCrunch — announced earlier this month that it would remove all “adult content” from its platform. That decision, which angered many in the adult entertainment industry who valued the platform as an increasingly rare outlet that supported erotica, was a response to Apple removing Tumblr’s app from the iOS Store after child pornography was found within the service.

This impact of this new policy has made its way to Indonesia where KrAsia reports that the service was unblocked earlier this week. The service had been blocked in March after falling foul of the country’s anti-pornography laws.

“Tumblr sent an official statement regarding the commitment to clean the platform from pornographic content,” Ferdinandus Setu, Acting Head of the Ministry of Communication and Informatics Bureau, is reported to have said in a press statement.

Messaging apps WhatsApp and Line are among the other services that have been forced to comply with the government’s ban on ‘unsuitable’ content in order to keep their services open in the country. Telegram, meanwhile, removed suspected terrorist content last year after its service was partially blocked.

While perhaps not widely acknowledged in the West, Indonesia is a huge market with a population of over 260 million people. The world’s largest Muslim country, it is the largest economy in Southeast Asia and its growth is tipped to help tripled the region’s digital economy to $240 billion by 2025.

In other words, Indonesia is a huge market for internet companies.

The country’s anti-porn laws have been used to block as many as 800,000 websites as of 2017so potentially over a million by now — but they have also been used to take aim at gay dating apps, some of which have been removed from the Google Play Store. As Vice notes, “while homosexuality is not illegal in Indonesia, it’s no secret that the country has become a hostile place for the LGBTQ community.”

Google brings its ARCore technology to China in partnership with Xiaomi

Google is ramping up its efforts to return to China. Earlier this year, the search giant detailed plans to bring its ARCore technology — which enables augmented reality and virtual reality — to phones in China and this week that effort went live with its first partner, Xiaomi.

Initially the technology will be available for Xiaomi’s Mix 2S devices via an app in the Xiaomi App Store, but Google has plans to add more partners in Mainland China over time. Huawei and Samsung are two confirmed names that have signed up to distribute ARCore apps on Chinese soil, Google said previously.

Starting today, #ARCore apps are available on Mix 2S devices from the Xiaomi App Store in China. More partners coming soon → https://t.co/16QoOTgqve pic.twitter.com/lT4TYXrzwF

— Google AR & VR (@GoogleARVR) May 28, 2018

Google’s core services remain blocked in China but ARCore apps are able to work there because the technology itself works on device without the cloud, which means that once apps are downloaded to a phone there’s nothing that China’s internet censors can do to disrupt them.

Rather than software, the main challenge is distribution. The Google Play Store is restricted in China, and in its place China has a fragmented landscape that consists of more than a dozen major third-party Android app stores. That explains why Google has struck deals with the likes of Xiaomi and Huawei, which operate their own app stores which — pre-loaded on their devices — can help Google reach consumers.

ARCore in action

The ARCore strategy for China, while subtle, is part of a sustained push to grow Google’s presence in China. While that hasn’t meant reviving the Google Play Store — despite plenty of speculation in the media — Google has ramped up in other areas.

In recent months, the company has struck a partnership with Tencent, agreed to invest in a number of China-based startups — including biotech-focused XtalPi and live-streaming service Chushou — and announced an AI lab in Beijing. Added to that, Google gained a large tech presence in Taiwan via the completion of its acquisition of a chunk of HTC, and it opened a presence in Shenzhen, the Chinese city known as ‘the Silicon Valley of hardware.’

Finally, it is also hosting its first ‘Demo Day’ program for startups in Asia with an event planned for Shanghai, China, this coming September. Applications to take part in the initiative opened last week.

Google just made a very subtle change to its Play Store logo and icons

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Google’s Play Store is getting a brand new look … well, kind of.

In a continuing effort refine the Play brand, Google has quietly rolled out a new logo for the Play Store, Android Police noticed. The new logo drops the shopping bag, just leaving the colorful triangle as the new app icon.

New Logo

New Logo

Image: google

Old Logo

Old Logo

Image: google

While the new icon first appeared on Google’s new Pixel phone, the bagless design is now rolling out to other devices too.

Sure, it’s a very subtle change, but the redesign comes with a big branding message. As Google continues to tweak logo designs, it’s creating a cohesive visual identity tied to the clean, material design aesthetic that the company announced a few years ago.  Read more…

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