Friday 18 March 2016

App-only ecommerce – to dive in or not to dive?

Ecommerce companies are increasingly leaning towards smartphone applications. Most companies contend that majority of their business comes from their apps and not the website. Apart from Myntra (fashion), the others who are app-only include TinyOwl (food delivery), Faasos (food), Ola (cabs), and Grofers (grocery delivery).
Smartphone penetration and adaptation has a remarkably high rate in India, according to a study conducted by Wharton University of Pennsylvania.
Sreedhar Prasad, business consulting partner at KPMG says, “The pace of smartphone penetration and mobile Internet in India has led to an acceleration of the app model much faster than elsewhere.”
However, will app-only strategy translate to happily ever after for Indian ecommerce?

Benefits of apps

Browsing in an app offers the following benefits to users:
  • Personalization – An app can be suitably personalized based on the user’s shopping preferences and habits. Myntra has a separate landing page for each user. Likewise, Faasos, a food delivery app, shows each user a unique menu based on the availability of choices at their location.
  • Reduced competition – When surfing on a computer, a user can explore choices and rates available in multiple websites. This is limited while surfing on an app, thus offering relief to the companies.
  • Optimum use of resources – A company can concentrate all its resources on maintaining and updating the app, rather than splitting its money and manpower between website and app.
At the same time, the following disadvantages could come in the way:
  • Restricting users’ choices – When Myntra went app-only, its competitors were quick to criticise the move of taking away user freedom. Kunal Bahl, CEO ofSnapdeal says app-only is “the dumbest and most consumer-unfriendly idea ever.”
  • Low storage in smartphones – Most smartphones have a limited storage, and users tend to delete apps that they haven’t used in a while. “The usual challenge of getting noticed and heard in a crowded market is even more exacerbated in the app world,” says Prashant Gupta, CEO of abof.
  • Not expensive to maintain both – Ankur Bisen, senior vice president for retail at Technopak, says, “The incremental cost of operating a website is very low.” Sreedhar Prasad feels that both are required for a company’s success, “I believe that ‘click-and-buy’ will happen on the app while ‘browse-and-buy’ will be on desktop.”

App only or app and website – the verdict

Experts are divided on the ideal solution. However, the majority feels that going app-only may not work. Kartik Hosanagar, a Wharton professor of operations feels that it could be ‘risky’.
Rishikesha Krishnan, director of the Indian Institute of Management Indore says, “My own suspicion is that a hybrid approach is better.”
It would be prudent if ecommerce companies exercise caution before taking drastic measures. However, one should also consider the area of operations before deciding if a website is needed at all.

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