Monday 30 November 2015

Start-ups refocus on mobile web as app-only strategy loses fizz

Apps, as e-commerce companies told anyone who cared to listen, were the future. Many put their money where their mouths were, altogether withdrawing from the mobile web.
Now, as apps lose their novelty, and as smartphone users uninstall apps to clear up memory (uninstall rates are as high as 90% in some cases), these companies are revisiting their mobile web strategies.
The winner? Google, which retains its dominance of online ad spending.
Earlier this month, Flipkart restarted its mobile website. Myntra also plans to relaunch its mobile website, said two people familiar with the matter. Myntra’s move has been prompted by the drop in sales after it went app-only on 15 May, the two added, speaking on condition of anonymity.
Flipkart said in November that it would introduce web-based apps that will potentially make it easier and more convenient for people to shop on mobile phone browsers. A few days later, rival Snapdeal (promoted by Jasper Infotech Pvt. Ltd) said it too would launch a mobile web app to offer faster and app-like experience to web users.
Start-ups across the board, especially those that had moved unevenly towards the app, are scrambling to improve their mobile web offerings.
As per Deepak Gaur, managing director at venture capital firm SAIF Partners, “Earlier this year, companies had reduced resources and efforts towards mobile web, and the app-only strategy was taking centre-stage. But increasingly, we are seeing re-prioritization of mobile web and companies (in SAIF’s portfolio and others) are giving equal attention to mobile web again.”
Nobody is saying apps aren’t important. But it has become crucial for start-ups to have functional and well-designed mobile websites or web apps.
Few predicted this shift, which wasn’t even on the radar of many start-ups a few months ago. “The mobile web never died, and for those who moved to app-only…it was a faulty decision in the first place. For service providers like us, it is never an either/or choice,” said Anand Chandrasekaran, chief product officer,
According to Chandrasekaran, mobile web is a big contributor not just for Snapdeal but for the industry. “It is a bigger commitment to download an app,” he said.
Snapdeal gets about 70-75% of its traffic from the mobile web.
According to Chandrasekaran, various browser makers are realizing the benefits of offering integrated services—improving the quality of mobile websites.
“Slowly you are seeing a lot of innovation happen on the web; for instance, there are app-like features now available on the web,” he added.
Online grocery firm PepperTap, run by Nuvo Logistics Pvt. Ltd, which is currently available only on app and desktop, will be launching its mobile website soon, said Navneet Singh, chief executive and co-founder of the company. He did not disclose a specific timeline but said it’s important for PepperTap to have presence across all platforms.
India is expected to have close to 400 million mobile Internet users by June 2016, according to a report released in November by the Internet and Mobile Association of India and market research firm IMRB International.
A majority of these users will access the Internet only through their smartphones.
With the growing popularity of mobile apps, which many say offer a superior customer experience than conventional websi-tes, start-ups shifted their pro-duct and business strategies towards the app at the expense of desktop and mobile websites.
During the funding boom of 2014-15, many investors regarded the number of app downloads as one of the indicators of a start-up’s performance.
Entrepreneurs and marketing heads rushed to maximize app downloads.
Soon, however, it was evident that they didn’t necessarily result in high growth.
Consequently, the focus moved to usage and customer engagement. In this scenario, many start-ups and their investors have accepted that their expectations of an app-only world haven’t materialized.
There are several reasons for this. Many first-time Internet users, especially in smaller cities and towns, prefer using their mobile web browsers to shop and surf the Internet rather than download a multitude of apps on their low-cost smartphones that have limited storage.
Customers also tend to get rid of most of the apps they download because of the inconvenience of frequent app updates and the limited storage space on phones, studies have shown.
Now, many start-ups are moving to building mobile web apps, which can potentially offer the convenience and superior experience of so-called native apps, but without their limitations.
A few business-to-business (B2B) start-ups are also increasing their focus on the web.
Tracxn, which provides funding and other data on start-ups to investors, shut its mobile app four months ago and launched a mobile web app.
“As long as you can offer an app-like experience, mobile web is better for customers and companies,” said Abhishek Goyal, co-founder of Tracxn. “Customers don’t have to keep downloading updates and they save on space. For companies, it’s cheaper to build a mobile app compared to a native app.”
The shift back to mobile web will also affect advertising and marketing spending.
Many analysts predicted that Google, the largest beneficiary of digital ad spending, will be hit badly if shoppers moved towards apps and abandoned websites, desktop or mobile.
Google generates a majority of its revenues through search. With the rise of apps, its search business was getting hit. Though Google owns Android, which powers a majority of the smartphones in India, analysts predicted the company would lose to rivals such as Facebook Inc. and ad-tech companies in an app-only world.
As mobile web makes a comeback, Google is better positioned to retain its dominance of digital ad spending.
“Affordable smartphones have led to a huge surge in adoption of the Internet in India, but if you look at user behaviour on mobile phones, you will realize people are also watching videos, searching and using the rest of the web. For businesses to win on mobile, they need to take a strategic view on how mobile fits into the consumers’ lives—how it interplays with other devices they may own and how they move seamlessly between the web and apps. While there is a big focus by online companies to push app downloads, they are also learning to build a more holistic mobile strategy, one that ensures they are present—with relevant content—wherever the users are,” said Nitin Bawankule, industry director, Google India.
In October,Google announced plans to make mobile web browsing much faster and convenient. The initiative, Accelerated Mobile Pages Project, is expected to go live early 2016, according to a 25 November report by tech news portal TechCrunch.
“Mobile web continues to be a way for consumers to engage with content. When it comes to monetization, it will continue on both,” said Dippak Khurana, chief executive officer at mobile ad-tech firm Vserv Digital Services Pvt. Ltd.
Still, there are people who believe that apps will eventually call the shots.
“In the mobile Internet world, it is an app war. And in an app war, you can’t win by betting on a mobile website,” said Vijay Shekhar Sharma, chief executive at One97 Communications Ltd that runs Paytm.
Hyperlocal services provider Grofers India Pvt. Ltd too plans to focus exclusively on its app.
“Eventually, the market will go app-only and apps that have a frequent-use case will always find space in customers’ phones,” said Albinder Dhindsa, co-founder at Grofers.
The company currently sees users on its platform shopping about eight times a month.

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