Business Standard

With mobiles providing anytime, any place shopping, and with smartphone use set to increase greatly, customers are switching to m-commerce

Nikita, who works in a publishing house, wanted to buy a laptop. After extensive research and making comparisons between the various models available, she finally found one that suited her budget and requirements. She checked out prominent e-commerce sites for the best deals and had almost bought the device, when her friend Ashish persuaded her to download the mobile application of one of the e-retailers that was offering a deal on the product. She saved at least Rs 2,000 on the purchase because she opted to buy via the mobile phone app. She joined a host of customers who are switching their loyalties from e-commerce to m-commerce.

Unlike Nikita, who was new to mobile phone purchases, there are many who have already explored this area. For instance, Shekhar, an architecture student, recently bought a high-end watch using a mobile phone app. That’s because he was getting the best discounts through the app. It was his first online transaction and he hasn’t looked back since. All his weekend trips to malls and movie theatres are now in cabs booked through mobile apps that have been offering deep discounts. Many taxi aggregators such as Uber, Ola, Meru and TaxiForSure have been offering discounts of between 20 and 100 per cent, depending on the day of the week and if you’re using the service for the first time.

Nikita and Shekhar are among the 120 million Indian mobile Internet users who have experienced the freedom of shopping through mobile apps – to shop at any given time, at any place, without the hassle of switching on another device and connecting it to the Internet. From cab services to furniture, books to grocery, automobiles to hotel bookings, shopping is now more instant than preparing a cup of noodles.

Seeking a better experience
Of course, mobile data access can be erratic and slow at times, resulting in an unsatisfactory shopping experience. And then, how does one figure out the design of a dress or a shoe on the small screen of a mobile phone? Those are concerns that will have to be addressed by Internet service providers and telecom companies in the near future. As for checking out the designs, phone screens are getting bigger anyway. Also, a majority of online shoppers identify designs in brick and mortar stores first and then buy them online at lower prices.

The fact that the mobile phone is the first Internet-linked screen for tens of thousands in this country makes the rush for online buying so unique in India. It’s the mobile phone that will help online retailers sell in small towns. That’s because small towns are low on computer and broadband connectivity but high on their fancy for smartphones, which mostly cost less than PCs (personal computers).

No wonder Myntra, which gets 90 per cent of its traffic from mobile devices, is thinking of moving to an app-only platform. Others such as Flipkart and Snapdeal are already going all out on mobile apps. Even online travel sites such as MakeMyTrip are offering discounts on bookings when a user chooses an app-transaction. The latest reports suggest many smaller start-ups in grocery, restaurant and the online dating space are planning an app-only strategy.

TAP, SWIPE AND SHOP
E-commerce majors are already witnessing a majority of their sales coming from mobile devices
The number of mobile Internet users is expected to swell up to 480 million by 2017
At the moment, the number of mobile Internet users in India is estimated at about 120 million, compared with the 100 million who use the Internet on computers
Websites of Flipkart and Myntra are not accessible though mobile-phone browsers
Mobile, or app-only, services enable greater customer service than a browser site, say companies
Ola, MakeMyTrip, Myntra, Limeroad offering schemes for users on app downloads
Amazon, Snapdeal have held exclusive sales on apps to attract consumers
Apps enable higher customer loyalty; help companies mine users better
A company has greater access to data on the phone through the app

There are reasons for businesses to do that. Companies with apps can capture customers’ loyalty ahead of competitors and “reside in their mobile phones”, according to experts. This would help them understand customer preferences better and before others do, which could then translate into higher transactions.

“Most leading B2C (business to customer) portals in India already get over 50 per cent of their traffic from mobile devices. So, they now want to increase their interaction with customers and apps are the best way to do so,” Dinesh Gulati, director at online B2B (business to business) marketplace IndiaMART, recently told Business Standard. “Apps allow us to engage with customers, more as they are logged in on their devices throughout the day,” he added. Mobile applications not only help companies in assessing user experience better, but also make the technology back-end management lighter and easier.

Going mobile
A recent MasterCard shopping survey said that online purchases through mobile phones in India have grown more than 100 per cent in the last two years. So, there’s no doubt that the next battle for the e-commerce companies will be fought on handsets.

The numbers tell their own story: mobile Internet users in India are estimated at 120 million, compared with 100 million who use the Internet on computers. This is in spite of Internet on computers having been around for two decades in the country, while mobile phone data is relatively new. This is further backed by the number of mobile phone users as against landline subscribers: the total subscriber base in the country stands at 964 million, of which 937 million are wireless users.

It isn’t a surprise then that predictions for 2015 from Deloitte’s Technology and Media & Telecommunications India showed an increase in the value of m-commerce-based transactions in India. The figure went from Rs 7,800 crore in 2013-14 to Rs 36,000 crore in 2014-15.

“The ‘mobile first’ nature of the Indian Internet user base would further the usage of mobiles as the preferred channel for commerce in the country,” Deloitte said in its report. “Favourable regulatory policies related to access to FDI (foreign direct investment), ease of MNP (mobile number portability), free roaming and decreasing rates have led to a tremendous increase in the mobile subscriber base in the country. With PC penetration languishing in single digits, mobiles become the obvious choice for attaining a wider reach… Deloitte predicts a new breed of service, which touches the daily lives of the consumer, will play a pivotal role in the growth of e/m-commerce in next two years.”

India currently has the third highest population of smartphone users after China and the US. According to research and analysis firm Emarketer, India is all set to overtake the US to become the world’s second largest smartphone market, with over 200 million users by 2016.

Highlighting the importance of m-commerce in the country, 98 per cent of the respondents in a recent survey by mobile e-commerce platform StoreHippo said creating a mobile website or app for a company’s online store was a must for the “success of any business today”. About 120 companies participated in the survey.

It is for that kind of success that e-commerce players are putting all their might into technology acquisition. This will be critical for staying ahead in business and inching towards profitability. Snapdeal’s recent acquisition of FreeCharge – at an estimated $450 million – is just an example of how much technology matters to win the e-commerce game on mobile devices.