Phone shopping, here and now

These days, promoters and senior executives at India’s leading e-commerce firms have a common rallying cry — they’re all about putting ‘mobile first’ in their businesses. That hardly comes as a surprise. In what promises to be the world’s second-largest market for mobile phones this year after China, it’s becoming clear that a significant share of online transactions are shifting to mobile devices, like never before. 

—Kunal Bahl, co-founder, Snapdeal" src="/public/uploads/editor/2015-06-15/1434353579.jpg" alt="" width="320" height="230" />Ask Kunal Bahl, co-founder of Snapdeal, an online marketplace that’s on target to achieve $1 billion in gross merchandise value (GMV) or price of goods sold through its website this year. “Just one year ago, mobile phones brought in 5% of our orders. Now it’s close to 40%,” he says, adding that he expects this figure to cross 50% in a few months. Snapdeal saw its visitor traffic over mobile increase by 60% during the past three months alone. A lot of that came from first-time visitors from their mobile phones. “It’s a pretty good sign,” says Bahl. 

There is enough reason to believe that this is the beginning of a new phase in e-commerce, where the ubiquity of mobile handsets will increasingly determine how people buy and sell online. A report released by IAMAI and IMRB in 2013 estimates that the number of mobile internet users in India will have crossed 150 million by the end of March 2014, with a quarter-on-quarter growth rate of nearly 20%. While urban India will continue to dominate and reach 153 million users by June 2014, growth in the rural segment is expected to be faster at 50% to touch 32 million mobile Internet users by June 2014. 

Easy does it

Behind the numbers is the fact that an entirely new breed of users is emerging who will access the internet for the first time through their feature phones or smartphones. And designing for the mobile isn’t simply about creating a good-looking, loaded app. “It’s not about having more features. It’s about having better performance. Phone data connectivity in India is very choppy, and we want to reduce clicks for the user. That requires a lot of customisation,” says Bahl. A year ago, Snapdeal set up a separate team with a mandate to grow mobile-based revenues beyond those coming from desktop PCs. The 10-member team had people in technical, product management and marketing roles. “Over the next three years, we expect 75-80% of our orders from mobile phones,” says Bahl. He credits social media with promoting internet usage in mobile devices. “Social media has been a very strong conduit for channeling users into mobile commerce,” he says. 

Flipkart, too, has high ambitions, with over 50% of its orders expected to come from mobile devices in a year’s time, up from the current 20% of total orders now. One in every five new customers for Flipkart comes through the mobile channel today, according to data shared by the company. “Over two years from now, mobile is going to be the main channel. We are pretty much aligning our business strategy around this,” says Saranagati Chatterjee, VP — products and mobile strategy at Flipkart. Many of its mobile channel customers are from smaller towns and Chatterjee expects a bulk of business to come from non-metros in the coming years through the mobile route. 

Adapting to mobile is less of an issue with services-based portals, with some leading the transition. Online travel agency Makemytrip has its app developed across all mobile platforms — Android, Blackberry, iOS and Windows — besides an HTML version for feature-phones. Rajesh Magow, co-founder and India CEO, says 20% of Makemytrip’s site traffic is contributed by its mobile apps. Also, nearly 10% of all standalone hotels, including nearly one-third of hotels in its ‘Last Minute’ deals, are being booked via mobile devices now.  

Info Edge, which owns leading properties such as Naukri, apart from real estate portal 99acres and matrimonial site Jeevansaathi, has between 20% to 30% of its traffic across its verticals coming from mobile phones now, according to CEO and MD, Hitesh Oberoi. It’s the highest in Shiksha, its online education services marketplace. The mobile contribution for these could easily go up to 50% in a year-and-a-half, he estimates. Though smaller towns lead in terms of visitor traffic to its portals on mobile, Oberoi points out that these don’t necessarily translate into revenues. “Purchasing power for these visitors will follow with a lag, usually a year or so,” he adds.  

Appy with the change

Developing apps is key to building a good mobile experience. “Apps help improve user experience dramatically,” says Oberoi. Info Edge has developed Android- and iOS-based mobile apps for 99acres and with an Android-based app already out for Naukri, it is developing an iOS-based app that will be out soon. Oberoi says app users are also seen as more serious and engaged with greater potential to make a purchase. Flipkart launched its mobile phone app for Android users in September last year, followed by the iOS app in December. It’s preparing to come out with its Windows mobile-based app soon. “With apps, the speed is much better and push notifications can only be done through apps,” says Chatterjee. Creating multi-platform apps, though, takes time, and while leading e-commerce firms have dedicated teams for this, many are yet to come out with mobile apps. One reason, Oberoi points out, is the limited availability of mobile app developers. “There are more web developers available today,” he says.

Amazon India, which launched its mobile apps for iOS and Android devices in October last year, has a barcode scanning feature to search for items on its site. “Amazon.in is growing the fastest amongst all our sites in terms of mobile traffic and sales,” says a spokesperson. 

Online fashion retailer Myntra has so far had a browser-based site for mobile phones and tablets, which contributes 25% of business. This number is expected to go up to 40% by the end of this year, says Prasad Kompalli, chief strategy officer at Myntra, after its smartphone apps come out next month. It will offer a unique experience that is easier to use and simple, he adds. “We are looking at minimising choices and navigation for mobile users, and allowing for discovery as they go instead of dumping too many elements at once. It’s a process of reduction.” 

Money matters

Another key challenge in mobile transactions is payments. Storage of card data is one way out to make the process easier. While Flipkart has its Payzippy service, others offer similar options. E-commerce companies, however, are happier with cash on delivery (COD) for a reason. “We encourage COD because product return rates are low and dropouts at the shopping cart level are also lower compared with online payments,” says Kompalli. 

—Prasad Kompalli, chief strategy officer, Myntra" src="/public/uploads/editor/2015-06-15/1434353846.jpg" alt="" width="320" height="230" />However, Vijay Shekhar Sharma, founder of Noida-based One97 Communications, argues that the issue with online payments is more linked to the trust that consumers have in the order fulfillment process at the merchant’s end, and not so much with making payment over the internet. His online payment services brand, Paytm, is focused almost entirely on mobile devices. Apart from enabling utility payments and mobile and DTH recharges, Paytm’s mobile app has evolved into a marketplace for various merchants. Users of its mobile app can browse from a catalogue of over 100,000 products offered by its 250-odd merchant partners such as Zovi, Yebhi and Fern and Petals. “We are positioning Paytm as a destination,” says Sharma. The Paytm mobile app has delivered around 40% of the company’s 6.5 million transactions last month, according to Sharma.

Kompalli points out another benefit that mobile devices offer. “Mobile adds a new dimension of data through location and social networks as apps give access to the phone address book. This helps personalise even more than we do on desktops,” he says. The game, clearly, is about to change.