HK apps biz booms as developers focus on AR and NFC: survey

Hong Kong’s mobile app industry is growing more mature, driven mainly by business apps and e-commerce, while augmented reality and NFC apps are becoming noticeably more popular.

Those are the conclusions of the Hong Kong Mobile Apps Industry Survey 2017 from the non-profit Hong Kong Wireless Technology Industry Association (WTIA) as part of its annual Asia Smart App Awards 2017.

The fourth annual survey, conducted by the Hong Kong Productivity Council (HKPC) and commissioned by WTIA, found that the local apps sector is maturing, as the number of companies operating for six or more years has drastically increased from 22% last year to 50% this year.

Startups have also become considerably more well-established with an increase in founders aged 25 and above (23%) and founders with five or more years of work experience (13%).

According to the survey, the business apps category (57%) topped the most popular app products this year, followed by e-commerce applications (26%). Over four-fifths (82%) of the respondents allocated resources to R&D and product development in the previous year, with the average amount at HK$2,135,000.

Also, in terms of tech focus, AR and NFC saw the biggest leaps in activity for apps development. According to the survey, the number of apps in 2017 featuring AR and NFC technologies increased 13% and 11%, respectively.

The WTIA said the increase may be caused by the global success of the popular AR game Pokemon Go and the introduction of NFC e-payment services in Hong Kong, both of which appear to be inspiring more local companies to engage in the development of those kinds of apps.

With regards to costs, the vast majority of companies (80%) experienced an increase in operational costs over the last year due to high staff costs (86%) and office rental (55%). Despite this, the number of respondents with an annual revenue of HK$500,000 grew by 28%. At the same time, the number of companies running a deficit dropped by 14%. These figures suggest a better business environment and prospects for growth in the local smartphone app industry, WTIA said.

On the subject of skillsets and talent, over 33% of respondents indicated that they have experienced a serious shortage of manpower in the past year with technical staff positions (40%) and sales staff positions (11%) being the most difficult to fill. The talent shortage is the main reason 40% of respondents turn down business deals. To combat this and the increased operational costs, nearly half of the respondents (42%) have outsourced services to domestic specialist companies –69% of which are local, while 25% are in mainland China and the remainder are located other regions.