Switzerland-headquartered, in-app purchasing provider, Lotaris, is hoping to extend its reach in Asia from the current 10 percent (of its developer clients) to 40 percent by the end of 2014. One of the strategies for the company is to focus on independent developers and allow them to use a single API across operating system platforms for their in-app purchasing requirements.
The appstore ecosystem is extremely fragmented with different policies governing them. While stores like Windows 8, Google Play (where policies allows), Opera, GetJar and SlideME allows developers to use independent checkout services, other stores like Google Play, Amazon and Samsung mandate that developers have to use their checkout services.
With the latest Lotaris update, instead of learning and integrating with the in-app purchasing API of each individual store, Lotaris in-appCommerce provides developers with an easy way to develop their apps and games so that one API will work with the checkout services of all the major stores.
As Lotaris works as a payment gateway too, it by default becomes a single window for payment handling instead of multiple checkout stores on Google, Microsoft, Amazon, handling them separately. “We feel that developers should be worried about the content they are developing and marketing how they are discovered on the stores,” says Ian Ho, Director, Business Development, Lotaris SA.
“Developing payment mechanisms for different OSes and subsequently monitoring them is both time and resource consuming. By providing a cross-platform purchase mechanism and a single payment gateway, we are easing the developers job,” he adds.
Lotaris also plays the Merchant of Record for developers to track, administer and remit taxes to all the relevant tax authorities on the behalf of developers. “Most app developers are unaware that they are responsible for settling the sales and other tax liabilities in each country in which they sell their apps through the Google Play Store. We have a solution called the Google Play Store Tax Service, which removes the developers’ risk and administrative burden by becoming the Merchant of Record on their behalf,” says Ho.
As per a Gartner Report, in-app purchases are likely to account for 17 percent (US$4.6 billion) of the mobile app store revenues worth US$26.6 billion in 2013. The number is likely to go up to 48 percent by 2017 in a mobile app store market worth $76,5 billion.
Currently, much of Lotaris’ business comes from big clients like Symantec, Capcon, Sega and TrendMicro, which demand customised solutions. Going forward, the company hopes to get 80 per cent of its revenues from independent developers though its self-serviced portal. “Our clients would largely be in the domains of digital content publishing, gaming, productivity and fitness. They could be independent agencies to well-known brands like Rovio,” says Ho.
He hopes to reach out to at least 10,000 developers next year. But the in-app commerce solution provider is not ignoring the bigger brands. “There will be bigger brands coming in. They are strong in the PC space. Lately, some of them have seen a shrinking in their share prices as they have been slow in adapting to the mobile space,” Ho states as a matter of fact.
Much of Ho’s future target audience is going to come from Asia. “Currently, our 80 percent of the clientèle is from the USA. Only 10 percent comes from Asia, half of which is from Southeast Asia. We would like to take the Asian clientèle percentage to about 40 percent by the end of next year,” he says.
He feels that Asia will be a big contributor to in-app purchases in the future. “91 Wireless, an Android app store was purchased by Baidu in China, a couple of months ago, for close to US$2 billion and that is just an indicator of how big the market is and scale of potential to grow. It would be foolish for us to ignore the market,” he adds.
Lotaris will be marketing itself through mailers and announcements through channel partners like the Opera Mobile Store and the Windows Store. It is also looking to tie-up with channel partners like developer tool platforms, who provide complimentary services to developers.
As per Ho, other prominent players providing in-app commerce solutions right now are India based Vserv.mobi and Tanla Solutions. Currently, Lotaris is focused on Android, with support for iOS and HTML 5 coming sometime next year. “The Android market is more fragmented and is spread beyond the Playstore to other third-party distribution channels. There is more opportunity for us. So we are concentrating on that market right now,” says Ho.
The company, currently has a physical presence in Switzerland, USA, Japan and Singapore. It hopes to expand into more countries in Asia and Europe after the Series B funding, which it hopes to raise sometime next year. For the records, Lotaris received a Series A funding worth 9.5 million Swiss Francs (approximately US$ 10.4 million) in 2011 from Singapore based Vickers Venture; Swiss based, Eurofin Capital; and SVC Ltd, a subsidiary of Credit Suisse Bank.