App pricing with GDP in mind

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App pricing with GDP in mind

Published on Dec 21, 2019 by Christoph Wiesner

This week I got a review for my app Visual Timer from an Indian user who suggested adding a cheaper product, that would enable more purchases for their market.

That got me thinking about my pricing and I had a look at how it was configured in the first place.

In-app product pricing configuration in Google Play Console

In-app product pricing configuration in Google Play Console

In the Google Play Console, you just specify an amount (e.g. $1) and it takes the current exchange rate and converts the amount in the target currency. That was it for the global payment setup I thought — until that review.

This pricing does not take the differences in GPD (per capita) for the countries into account. This means that an Indian user is most likely not able or willing to purchase a product of $1.

I was quite surprised that I didn’t pay attention to that earlier. So I thought I’d share this learning here.

Calculate pricing

In order to configure adjusted prices, I’d need to calculate them for every country where the app is available.
I’ve used the GDP of my country and relate it to the GDP of the countries in order to adjust pricing.

For that, I’ve created a spreadsheet with all countries and their GDP per capita (there are two different models: nominal/PPP) and their currencies to calculate GDP adjusted prices. You can get it here.

Spreadsheet for calculating GDP adjusted pricing

Spreadsheet for calculating GDP adjusted pricing

Minimal price

While the calculations would suggest using a very low price for countries like Jordan Google is having a minimum price limit (I guess even individually defined for currencies). Still, these limits are not very transparent and for some countries to high compared to my calculations.

What remains?

I adjusted now my product pricings and I’m eager to see if those changes will drive purchases in countries where I lowered prices up to 10x. I will share the findings if there is some impact.

Thanks for reading and let me know if you have a different opinion or I got something wrong.