Spicy means a romance with explicit sex in it. The word exists because "erotica" sounds like a separate genre and "smut" cannot be printed in an app store listing, while "spicy" sells the same book to the same reader without upsetting anyone's content policy.
The pepper scale
Readers rate heat in peppers or flames, usually one to five. As a rough consensus: one is a closed door, two has a scene or two written softly, three is explicit and part of the plot, four is frequent and detailed, five is the point of the book. No standard exists, and a publisher marketing to a wide audience will rate its own books lower than a reader would.
Why it matters in apps
Serial-fiction apps lean on the word hard. The library is advertised as spicy, the covers suggest heat, and the terms of service often forbid explicit content outright, which means the scenes stop short of what the marketing implied. That gap is the most common complaint about this whole category of app, and it is worth checking a service's own rules before paying.
The apps in this niche fall into two groups, and the words they use will not tell them apart. One group is built for explicit writing and says so on its own website. The other sells spice as an atmosphere and keeps the actual page clean.
Spicy, steamy, mature
"Steamy" is the same idea, slightly older. "Mature" is a store rating word rather than a reader word: on Google Play it describes a content rating, so an app calling itself mature may only be telling you what its questionnaire scored.
See also smut and the glossary index.