Introduction
Recently, I was trying to create Site Collection App Catalogue on SharePoint Online through PowerShell, below are the commands that I used:
- Connect-SPOService -Url https://Domain-admin.sharepoint.com/ -credential [email protected]
- $site = Get-SPOSite https://Domain.sharepoint.com/sites/IMS
- Add-SPOSiteCollectionAppCatalog -Site $site

I am the SharePoint Tenant Admin, but then I also came across the article, where it was written that the user was trying to create an App for Site Collection must be a Site Collection Administrator for the Tenant Site Collection App Catalogue.
I made myself the Site Collection Administrator and I was able to create App Catalogue for Site Collection.

The User Rights necessary for creating an App Catalogue for Site are as follow:
- User must be a SharePoint Tenant Admin.
- User must be a Site Collection Administrator for Tenant Site Collection App Catalogue.

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