Suddenly, Why are so many Indian online companies screaming for a Made in India App Store? Google recently temporarily suspended many big online companies’ applications from their Google Play store. Some of us may not realize the gravity of the situation that Google has done. So, I want to highlight one thing. The Indian online companies will be out of business as soon as Google removes companies’ Official apps from the Play Store.
What’s the issue
Google has made some complicated changes to the in-app purchase service fee. According to the new service fee slab, the company or app developer will have to share 30% of the revenue from in-app purchases with Google.
A 30% commission rate is too high for the startups or the major companies to handle in a competitive or low purchasing power market like India. Meanwhile, the country’s state or central tax is around 18%, so 48% of the total revenue will go to Google and the government. In short, Google will enjoy a huge amount (30%).
Generally, if you have sold something worth ₹1000 in an application, then 30% of ₹1000, which is ₹300, Google will take, and 18% means ₹180 Government will take as tax.
After some backlash, Google cleverly tweaked the service charge. Currently, Google has added multiple conditions for developers to solve payment problems. However, the problem isn’t solved fully.
If you use Google Play Billing Services, the service fee is 15% for the first $1 million in revenue each year. After that, a 30% fee is charged for revenues over $1M (USD) each year.
Less than $1 million – 15% service fee
(Greater than $1 million – 30% fee on the remaining amount after deducting $1 million.)
The service charge for subscription-based models is 15% of the revenue from subscriptions. Also, Google offers a 15% or less fee to the Play Media Experience Program, which is subjective and limited to some devices.
Now, after seeing this heavy fee structure, if you decide to use alternative billing services to save your money. You will be surprised to know that you cannot avoid Google’s hefty service fee in any way.
As shown above, Google offers only a 4% discount on the service fee structure for alternative billing services. The service fee is 11% for the first $1 million yearly revenue. After that, a 26% fee is charged for revenues over $1M (USD) each year. Similarly, the subscription-based model fee is 11%.
Even a 4% discount won’t save you a lot of money because you’ll have to pay third-party billing platform fees and taxes, which will be around 2% or more. Despite using alternative billing services, Google will still get its hefty commission, and the 4% discounted rate won’t impact you much.
India’s top company members raised this issue with the Supreme Court of India and attempted to reduce the commission rate. As we all know, legality takes time. The final decision is still pending, and everyone is waiting for the decision of the Supreme Court.
Meanwhile, as Google has few owner’s rights because Play Store is Google’s product, they removed India’s top online platform for not complying with Google’s payment policies. However, after a few days, the suspended applications were restored, and the Government of India played a crucial role.
The following applications are
Shaadi.com
Bharat matrimony
naukri.com
99acres
kukuFM
etc
Apple is already running its App Store business at a 30% commission rate, but the market of the App Store is not as vast as the Google Play Store in India. Generally, Apple phone owners are capable of paying a premium.
Why we Need “Made in India App Store”
Ultimately, Google can charge us any amount for listing apps in its Play Store. Basically, the Google Play Store is a rented space where developers and companies list their apps for commercial or non-commercial use. Technically, foreign companies like Google and Apple can impose any service fee they want to make profits because we don’t have any alternative.
The lack of competition and unavailability of made in India app store has brought us here to pay high service charges. In India, the market share of Android OS smartphones is high. Hence, Google’s actions are always in the headlines.
The time has come to introduce a Made in India locally developed App Store installed in every smartphone and other smart device sold in India. This action will not only create fair competition but will also reduce dependence on foreign app store companies.
Moreover, I am not saying that Google is totally wrong because they have the right to do whatever they want with their products. However, higher service charges and taxes will be unsustainable for many startup companies in India.
Imagine if Google had asked for a 40% or 50% service fee instead of 30%. Or, who knows, higher service charges may be imposed in the future. There can be no end to the debate and speculation for this conversation.
The best part is the Government of India is taking a robust stance, and the Supreme Court is handling the legal way. Alternatively, our country surely needs one indigenous app store mandatorily installed on all smart devices. Also, try to include and enhance domestic components as much as possible.
Indus Appstore – Vocal for Local
Highlight- PhonePe’s Indus Appstore is currently available with 0% in-app purchase commission, and this Appstore is completely “Made in India app store”. At least for now, the Indian government should pass a law that PhonePe’s Indus Appstore will come pre-installed on all Android devices.
To conclude this, first of all, we need to understand that modification in domestic items is easy, and the Government of India can easily regulate them without fear. Furthermore, a monopoly or monopoly situation is a worse situation.