Hyderabad: May 1 this year will not be known for the May Day. Rather it would set off a new trend in the Indian shopping, with fashion retailer Myntra becoming the first ecommerce firm to shun desktop and mobile websites and move its business to a mobile application or app. Within a year, Flipkart — which owns Myntra — will also go app-based.
While the jury is out on the need for shutting down the website for shifting to app, it is evident that both e-commerce companies are aiming at capturing young buyers who tend to be make up the majority among e-shoppers. Currently, most ecommerce companies are present on all platforms such as desktop, mobile site and app. However, Myntra and Flipkart have created a new category in sales platforms, with the app-only approach.
A tweet from Flipkart’s founder says all. “If one does an unemotional financial and strategic analysis, mobile-only is obvious,” tweeted Sachin Bansal in a Twitter-based conversation on the benefits of becoming app-based ecommerce firm. He was commenting on a tweet by a person, who agreed with Flipkart’s strategy, saying that companies generally “focus on things that give max return on investment.”
By going the app-based, Myntra and Flipkart are building their business for the future, as statistics suggest that the future of Internet lies in mobile. According to experts, the increasing mobile internet traffic has led to Myntra and Flipkart move towards the app-only model. According to Myntra, around 70 per cent of its sales come from the customers using its app.
The app-only strategy, according to Flipkart bosses, is aimed at preparing the company for the future, when mobile Internet would dominate the good old desktops. There are several app-only shopping aggregators in the US such as Fancy and Houzz. According to a report by Morgan Stanley, Indian online shopper penetration will increase from nine per cent in 2013 to 36 per cent in 2020. And most of it will come from mobile users.
This coupled with increasing swift towards affordable smartphones by Indian consumers would make the mobile-first approach more sensible. In 2013 January-March quarter, the smartphones made up only 10 per cent of the overall phone sales in India. However, just two years after, the smartphones constitute nearly 30 per cent of mobile sales. Smartphone usage is, however, not just an urban phenomenon. Millions of people from the rural areas are accessing the internet via mobile, making the mobile-first an imperative for any company.
An example to show how deeply smartphones have penetrated into the rural areas, where sometimes even connectivity would become an issue: Nearly 2,000 farmers in Andhra Pradesh have sent their grievances to the government through Blackberry and iPhone handsets. According to a survey, rural Internet users accounted for 31 per cent of total Internet users in 2014, up from eight percent in 2009.
Apart from the changing device preferences, the purchasing power also plays a crucial role in the only-app strategy. Despite falling prices of smartphones, these devices are bought only by people, with certain purchasing power and it will allow e-tailers to focus their strategy towards such people. The app-based platform also allows e-tailers to know its customer preferences and pitch products that stand more chance of being bought.
So finally it’s all about money, honey.
