Differences in Subscription Conversion Rates by Country

Everyone says the US is #1, but who's next?

It's been a while, so I thought I'd write a quick informational post.

During the product growth process, we often witness different phenomena across countries. Rather than defining and managing these as specific national traits, we usually just make judgments based on the phenomena as they happen. This is to avoid making poor decisions based on hasty prejudices or preconceptions. Even though we don't strictly define and manage them, as our lessons gradually accumulate, a subtle 'sense' definitely starts to build up. Countries that react exceptionally sensitively to discounts, countries where the free trial conversion rate is notably low but the subsequent payment conversion rate and subscription retention are high, countries with an unusually high number of refunds, and so on—since these are inductive results that have been repeatedly accumulated, I now believe that these 'senses' are somewhat statistically significant. So, I decided it was worth trying to define them in writing. Of course, I must preface this by saying that these are things that happened specifically with our product, so they can vary depending on the product and situation.

Top Tier Countries for Subscription Conversion Rates

When you combine all subscription-related conversion rates, some countries really stand out. Taking everything into account—free trial conversion rates, auto-renewal conversion rates after a free trial, instant payment conversion rates without a free trial, and subscription retention after the first payment—the countries we can commonly call the Top Tier were as follows.

A. US, Switzerland, Australia
B. UK, Ireland, Canada
C. South Korea, Japan, Germany, Austria
D. Nordic countries

Of course, since this is based on conversion rates, the rankings might look different if we looked at revenue volume (influenced by total population, active mobile population, specific platform proportion (iOS, Android), specific market activation rates, etc.). Overall, there are many countries with high income levels. The good news is that many of them are English-speaking countries, meaning we don't have to worry too much about localizing subscription-related product specs.

Countries With Low Free Trial Sign-ups But High Payment Conversions

Generally, both the free trial conversion rate and the payment conversion rate are either both high or both low. However, there are countries where one metric is disproportionately high; specifically, countries where the free trial conversion rate is low, but the payment conversion rate is excellent. Japan, Mexico, and India are prime examples. This means the proportion of total users who actually start a free trial is very small (and because they are such carefully self-selected trial users, the payment conversion rate is high). You could think of this as an income level issue, or interpret it as a tendency to deliberate carefully before consuming. For instance, if a country leans toward the former interpretation, pitching a 'discount' will significantly boost revenue, but if it's the latter, pushing a 'discount' won't do much. We can try appropriate additional growth experiments tailored to the characteristics of each country.

Countries With High Free Trial Sign-ups But Low Payment Conversions

This case is relatively intuitive. They jump in because it says 'free,' but since they don't want to spend money, it rarely leads to that first payment. Southeast Asian countries like Indonesia and the Philippines fall into this category, as do Central Asian countries like Ukraine and Kazakhstan. What's unique is that Russia is the only European country singled out in this case. Also, the oil-rich Arab countries have a surprisingly low payment conversion rate relative to their income levels, though not quite to the extent of the countries above. Since these countries easily overcome the free trial hurdle, it's best to adopt a strategy that boosts their satisfaction during the trial period. Alternatively, since they could be interpreted as being 'price' sensitive, instantly offering a discount upon auto-renewal cancellation could be a great approach.