Doubt regarding playstore app update

I would like to know if the app downloaded from playstore can only be updated with a new version from the playstore itself ?
Can’t I give the app a new version code and try to update from my phone ?

If you have downloaded a version from the playstore, but updated it and exported it as an APK, you can delete the one on your phone and repalce the the APK, however it will not be registered as a Playstore installed.

What im trying to do is to test the new version of my android app (keeping all the previous data). My brother installed the old version of the app from playstore. I gave him the latest version with a new version code, but unable to install.

Yes that is normal behaviour. To upgrade and retain data, you need to do so from the playstore.

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