Varun Jain, The Economic Times
New Delhi, 21 May 2015
Myntra.com, India’s largest online fashion retailer, has seen a 10% drop in sales since it shut its website and turned a mobile app-only etailer last week. The company, owned by Flipkart, had factored in such a decline and hoped to return to the level of sales prior to the move in the coming weeks, according to a source. Its closest rivals, Snapdeal and Amazon, however, said they had no plans to wind up their websites and focus only on mobile phone users.
"Our data shows that there are still many customers who use PCs to shop online. We do not want to force our customers to use one specific medium to shop on Snapdeal," a Snapdeal spokesperson said.
This is the case even as 75% of Snapdeal’s orders are placed on mobile phones. Akshay Sahi, customer experience head at Amazon India, too, said, "We believe that as a consumer-obsessed company, we have to enable our customers to shop anytime, anywhere, and anyway they want."
Another major online marketplace, eBay, which generates over 45% of its total traffic through mobile devices, is not willing to bet exclusively on mobile app either. "At eBay, we believe in an inclusive strategy rather than an app-only strategy," said Shivani Suri, head of marketing at eBay India. "With the growth of smartphone penetration and given that the first interface for most of the users is mobile, we consider it as key medium. However, it doesn’t mean that we are not going to cater to the rest of the screen." In India, as in the rest of the world, it has been observed that a multiscreen user is most engaged, said Suri.
Myntra, which reportedly generates more than 90% of its traffic and 70% of its orders from its mobile app, closed down its website last Friday and moved to a mobile-only platform. Its parent, Flipkart, plans to follow suit within a year. The move is driven by rapid penetration of smartphones in the nooks and corner of the country. Another rationale is that focusing entirely on the mobile app will help the e-commerce player give customers a better shopping experience.
According to a recently released report by Goldman Sachs, the e-commerce market will account for 2.5% of India’s GDP by 2030, growing 15 times and reaching $300 billion (about Rs 19,200 crore) from $20 billion (about Rs 1,280 crore) at present. The report also stated that India will have the second-largest digital population in the world with one billion users by 2030, powered by online mobile penetration.
India has enough spectrum and telecom infrastructure to provide 3G data coverage to 25-30% of the population, it said. "Further, 3G-enabled smart phones are available for $40 with more than 900 phones launches last year," it said.
Another report by the Internet and Mobile Association of India and market research firm IMRB International said that the number of mobile internet users in India is expected to reach 213 million by next month, up from 173 million in December 2014.
Although a number of recent reports predict a massive surge in smartphone usage in India, which suggests Myntra has made the right decision, several experts told ET that they are not convinced of the soundness of the e-tailer’s move. Some industry watchers said that slow internet speed on mobile devices and expensive data plans could play spoilsport. "One could argue that while it is okay to reduce or even stop the investments on PC-web, it could be foolish or even dangerous to discount it as a past that has completely ceased to exist," said e-commerce expert and independent consultant Ratul Ghosh.
Many shoppers who are comfortable with PC may not be keen to shift to app, he said. "What will happen, in my opinion, is that affiliate websites will have a party once they are the only route to the inventory on the PC-web. And we all know that’s 5-10% more expensive a sale."
Devangshu Dutta, CEO of retail consultancy firm Third Eyesight, said app shopping will possibly prevent comparative shopping, making the experience more "sticky", and could allow the site to further customise the experience based on location and phone-based data.
However, he said, a smaller number of web browsers are generating a disproportionate share of the sales, which suggests that they are bigger spenders than mobile users, so that is definitely a negative trade-off if a site goes to an app-only experience.
Amazon’s Sahi said nearly half of the company’s traffic comes through mobile phones. "All of Amazon’s development and innovation is app first, and it will continue to be our flagship experience," he said.
ET had earlier reported that fashion retail portal Jabong is also not in a hurry to opt for app-only mode. "We strongly believe customers should have the choice to buy either on smartphone or computer," Jabong co-founder Praveen Sinha had said.
(Published in The Economic Times.)