India’s over 100 million smartphone users are beginning to shop online at such a pace that the country’s biggest e-tailing companies are expecting the mobile traffic to surpass their desktop user base soon.
By: Kunal Doley
Currently, several e-tailers are registering close to a third or nearly half of their sales via mobile devices, while a few others have already crossed the halfway mark. Increasing affordability of smartphones, special mobile sites and apps, improved data coverage and reduced costs, plus the overall mobile ecosystem in general, have created favourable conditions for m-commerce to grow impressively in the country.
In a recent statement, online marketplace Snapdeal announced that over 50% of its sales were now coming via mobile devices. The company said it has seen an exponential 25x growth in its mobile-based transactions compared to a year ago, when mobile devices accounted for just 5% of its total orders. Mobile transactions are expected to touch 75% by end of this fiscal, says Ankit Khanna, senior V-P, production management, Snapdeal.
Similarly, at Flipkart, just over a year ago, the daily traffic from the mobile platform was in single digits. Today, that number stands at over 50%.
“Clearly, e-commerce is moving rapidly towards m-commerce. More and more online shopping sites are adopting the mobile-first route today. At Flipkart, the growth rate is twice that of desktops. In fact, the pace at which this medium is catching up with desktops is faster than what we have seen in the US or China, where the concept of mobile commerce has been around for longer,” says Mausam Bhatt, director, mobile marketing, Flipkart.
Fashion e-retailer Myntra is almost there with close to 35% of its business being driven by m-commerce. With the launch of its mobile app, the company is expecting that figure to grow to 50% by end of this fiscal, says Prasad Kompalli, chief revenue officer, Myntra.
Some mobile-only startups like Paytm, too, are also showing an increase in the trend. As per Deepak Abbot, AVP, Paytm, mobile transactions have been growing almost three-fold every year. “The past year has been particularly great for m-commerce when not only smartphones captured the market but a lot of push on m-commerce was made by several players, including Paytm, which launched its mobile marketplace earlier this year,” he explains. Paytm already sees 55% of its orders coming through the mobile platform.
There are a number of factors that have led to this growth. “Mobile penetration is growing at close to 200% year-on-year. With increasing affordability of smartphones and improved data coverage, mobile is becoming the primary internet access instrument. Well-made mobile apps with personalisation and easy payment options like cash-on-delivery are removing barriers to transacting via mobile devices,” says Bhatt of Flipkart.
Technopak’s E-tailing Outlook 2014 attributes the drivers for this trend to a low broadband penetration, among others. “As compared to broadband users, mobile Internet users have registered faster growth, which is expected to continue given the increase in the penetration of high-speed Internet, primarily driven by the rollout of 3G and 4G wireless technology at affordable rates,” explains Pragya Singh, associate vice-president, retail, Technopak.
“With mobile being the only medium to access Internet for many in tier 2 and 3 cities, it has empowered people to actively engage with e-commerce platforms,” says Kompalli of Myntra.
In the spectrum of progressions, mobile wallets have emerged as a boon for Indian consumers. Mobile wallets offer time-saving service of making payments through a mobile. It simply requires for an individual to fill their mobile account and make transactions at will.
“In a country like India, where a majority of the population still doesn’t have access to banks but do have mobiles, mobile wallets are going to be of great advantage,” says Pramod Saxena, founder chairman and managing director of Oxigen India, a service distribution and payment collection solution provider.
In tune with the trend, e-tailers have been pushing their mobile apps aggressively through promotional offers. “While some leading players are offering discounts on shopping from mobile apps, others are providing free deliveries and mobile-only deals to encourage such shopping. This investment will only grow,” says Singh of Technopak.
“We run app-only initiatives regularly such as our once a week, app-only flash sale,” says Bhatt of Flipkart, besides daily lucky draws. Kompalli of Myntra adds: “Our offers on mobile are relatively higher than for desktop users.”
However, experts feel there are still some grey areas as far as m-commerce in the country is concerned. “Data, security and the lack of an alternative to a credit card for small value transactions are some challenges that might slow down the speed of growth. If and when payments via a mobile operator become a reality, we will be poised for the big boom,” says Ambika Sharma, founder and managing director, Pulp Strategy Communications, a mobile activation and promotion company that works with brands such as Google, Yebhi, Yahoo, Philips and Michellin, among others.