Will Flipkart's app-only gamble pay off?
Is the app-only approach being favoured by a few e-retailers a risk being taken too soon? Or is it a masterstroke that will give them a first mover advantage as India gets ready for another telecom revolution with the coming of 4G?
E-retailers have been aggressively working in building their mobile capabilities, especially for m-commerce. In an earlier interview with exchange4media, Sachin Bansal had said that money would be spent on acquisitions and internal development as the company seeks to build its mobile strategy. “We see ourselves as the mobile e-commerce company of the future,” he had said. Flipkart is not alone in this way of thinking. The likes of Snapdeal, Amazon, etc. have all made investments in increasing their mobile presence.
Back, in March, Bansal, on Twitter, had stated, in response to a Twitter follower that, “I would argue that a non-mobile only strategy is the most risky thing right now.” He had further written, “Any early start-ups should focus ONLY on mobile.”
In following with this “mobile-only” strategy, both Flipkart and Myntra, a company that it acquired recently, have shut down their desktop and mobile websites. Both companies will now be accessible only through their apps.
Snapdeal was also rumoured to be considering the same. When asked about it, Sandeep Komaravelly, Sr. VP of Snapdeal denied these rumors. He, however, agreed that the mobile is going to become more and more important for e-tailers. “The smartphone penetration in the current is around 800-900 million currently and about 75 per cent business comes through mobile. There is enough room for us to grow and so there is a large opportunity,” he said.
It is still to see what others like Amazon, Shopclues, etc. plan to do but they all agree that mobile is their focus area. To understand this way of reasoning, take into account that Flipkart and Myntra receive around 75 per cent visits through the mobile, Jabong is as high as 80 per cent according to some reports. Of course, this includes both the mobile web as well as the app but the idea is to drive traffic only through the application.
However, Praveen Sinha, MD of Jabong, is adamant that the company does not think this the right opportunity to adopt this strategy and it would seem that not a lot of people are actually convinced about the wisdom of shutting down the desktop/mobile website. “I am not really sure how going “only app” will work for e-commerce,” said one media veteran. Another e-retailer also agreed that perhaps it was too early to take an app only strategy.
The pros of Flipkart or Myntra’s strategy are obvious. Apps will allow for better geo-targeting and collection of information. Also, an app allows a better user experience and for e-retailers a better user experience always guarantees higher chances of a transaction.
One thing that e-retailers who are thinking about this approach should ask themselves is why shut down the desktop and mobile sites. When you come to think of it, there is no reason for doing so. We are anyway seeing that almost all the e-retailers are trying to entice customers to buy from the app buying offering exclusive discounts and offers on the app. If a customer, and there are sure to be quite a few of them, still feels more comfortable buying from a desktop, the option should be left available to them.
Forcing customers to only access the website via a mobile, creates unnecessary restrictions on their buying behaviour. Another thing to consider is that though the number of smartphones has increased substantially in the country, how many of these actually have a screen size large enough to make for great shopping experience?
For example, Ashish Shah, Co-founder of furniture e-retailer Pepperfry says that the user experience for their category of products will be difficult to replicate on a small screen and it might even cause potential consumers to back off from making a purchase.
A November 2014 IDC study said phablets (screen size 5.5”-6.9”) accounted for just 6 per cent of the market with and IDC analyst saying that they had “hit a plateau”. On the other hand, the sweet spot for customers seemed to be phones with 4.5”-5.5” screen sizes, said the report.
Flipkart’s (and Myntra’s) app only strategy might come across as a big gamble but with 4G services expected to commence in the country this year, the proliferation of better and more media-friendly devices will definitely increase and Flipkart might end up having the last laugh over its rivals.
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