Friday 24 April 2015

M-commerce in India: The next level

The e-commerce wave gripped Indian market so swiftly that in no time there was a shift from brick to click. From our morning's breakfast to that favourite evening dress; e-commerce made everything just a click away. 

With some strong players and hoards of startups banking on online commerce, where does the future lie? The scorching summer appears to be heating up the m-commerce landscape in India with several reports forecasting bright prospects. 

As per the report by the Internet & Mobile Association of India (IAMAI) and IMRB International 2015, the mobile internet users in India is expected to reach 213 million by June this year on the back of growing smartphone penetration. It said that there were 173 million mobile internet users in India in December, 2014.

While number mobile Internet users in rural India are likely to grow to 53 million by June 2015, urban India will continue to account for the larger percentage with 160 million users.

This popularity of mobile phones in India is driving the country’s biggest e-commerce company to shut down its web portal within a year.
Flipkart recently announced that it will be transitioning over to its mobile app completely because of consumers' adoption and preference. The e-tailer clearly sees mobile as the dominant platform in the future as they are also shutting down all their e-commerce operations for Myntra as early as May 1. 

"A year ago, 6 per cent of our traffic was coming from mobiles. In less than 18 months, that traffic is 10-fold. As the rate of transactions mirrored that of traffic increase on the app, Flipkart's move to app-only platform makes sense," Michael Adnani, vice-president, retail and head of brand alliances, Flipkart said. 

The emerging shift is largely driven by falling handset prices and rise in smartphone penetration. A report by Morgan Stanley reveals that internet users will rise to 330 million in 2016 financial year, driven by falling handset costs, higher smartphone penetration, faster bandwidth and higher internet content or online services.

This shows the significance of what a mobile phone is doing for the consumers. Couple of years ago, being an owner of a smartphone was a style statement but today they have become far more affordable. The report said over the last two years, smartphone prices in India have come down from $200 to meagre $50. 

Now club this with the affordable rates of Internet pack that telecom service providers offer to woo customers. A 3G, 2GB pack which used to cost Rs 750 or 38 paisa ARMB in January 2013, today costs Rs 450 or 23-paisa ARMB for a 2GB pack 

The report further said, "Data growth will be driven by operator strategy of lower average revenue per mega byte (ARMB) for higher MB pack and operators having a strong data ecosystem, including strengthening spectrum portfolio."
This clearly shows how m-commerce, slowly yet powerfully, driving the e-tailers towards itself. However, they must not forget that for some consumers, a laptop or desktop offers a fuller and extended web experience which even the largest tablet or phone cannot match. This experience becomes an integral part of a transactional decision. This is an experience only a larger screen with a decent keyboard and touch/pointing device can deliver. 

Indian e-tailers are yet to stand the test of time for the mobile-only format, but the question remains; how many apps would a shopper want to have on their phone?

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