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How the growth of Indian e-commerce will end by 2016

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19th Feb 2015
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M-commerce (mobile commerce) is rapidly overtaking e-commerce as the de facto mode for online transactions. With over 50 per cent of total online orders coming from mobiles, there is little doubt that by the end of 2015 transactions from mobile devices will far eclipse those from desktops. Myntra, the leading fashion retailer in India, has already announced its plans to become a mobile-only marketplace by the end of the year. Snapdeal declared that 65 per cent of their orders come from mobile and by the end of the year, they expect this to grow to about 90 per cent. With such mindboggling percentages, e-commerce merchants are left with no choice but to embrace mobile.


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Why is this happening?

While e-commerce is still growing in urban markets, the exponential growth is coming from Tier 2 and Tier 3 cities. In fact, Myntra gets about 60 per cent of its traffic from these. The factors driving consumers towards the mobile rather than the desktop in these regions are:

  1. Infrastructure: India is a mobile-first country. It does not have the infrastructure to serve a billion laptops, but it is well on its way to serving data on one billion mobile phones. Mobile is the only connected device for many consumers in Tier 2 and Tier 3 cities, as well as rural regions.
  2. Affordability: With Android taking over India, even the low-income bracket is able to afford a smartphone, which is then used as an internet device. According to IAMAI, 65 per cent of internet users are e-commerce customers.
  3. Access: Big brands are not present in Tier 2 and 3 cities. So the only way aspiring youngsters can buy their favorite brands of jeans and T-shirts is online.
  4. Payment mechanism: Cash-on-delivery has opened up a whole new market for e-commerce. Credit cards are uncommon in India, but with cash-on-delivery, the rural population is also able to purchase online.

For these reasons, there is little surprise that India is one of the largest mobile commerce markets in the world (second only to China). Smaller merchants are following in the footsteps of giants such as Snapdeal, Flipkart and Myntra and adopting mobile in a big way.

MobileCommerce

What does adopting mobile mean?

Adopting mobile means to be able to serve mobile shoppers well. Mobile shoppers are very demanding and impatient. As many as 57 per cent users won’t recommend and 40 per cent will turn to a competitor if they have a bad shopping experience on mobile. They will not wait more than four seconds for a page to load, and the conversion rate goes down by seven per cent for every second delay in page load time. What these statistics mean is that mobile shoppers are very hard to please – and the efforts made to please them constitute “adopting mobile”. Here are a few ways in which merchants can adopt mobile.

  1. Fast page loads: Web visitors are increasingly sensitive to page load times. They tend to care more about speed than all the bells and whistles we want to add to our web pages. A bad experience with speed can have a persistent effect on customer behaviour.
  2. Touch-friendly interface: The main driver behind the rise of mobile shopping has been the customer - not online stores. Customers expect everything to be mobile-ready, and it reflects badly on brands if they haven't already taken this step. It can be enough of a motive to push customers elsewhere.
  3. Dedicated mobile sites and apps: Online retailers can provide a better experience to customers and thus trigger higher conversion rates. A well-built mobile app targeted at the right audience can achieve outstanding levels of engagement.
  4. Native capabilities: Mobile gives merchants the unique ability to integrate seamlessly with some of the smartphone's inbuilt features like Click-to-Call, Camera for Barcode scan, GPS for localised search and more. Taking advantage of these mobile only features can lead to some really cool functionality designed to enhance the user experience
  5. Mobile marketing: Mobile opens up new possibilities for engagement that were once closed to merchants. Analyzing customer activity on the app, retailers can send targeted push notifications, in-app notifications and email with product recommendations. A well targeted mobile marketing campaign can lead to unprecedented amount of user engagement that was thought impossible before.

Conclusion

Online merchants are well aware of the “go mobile or go home” e-commerce landscape, particularly in India. However, they struggle to understand what adopting mobile means. It means a lot more than a responsive site. It means doing everything it takes to acquire, engage and retain mobile customers. Or they might as well kiss these customers goodbye.

 Guest Author:

Satya Krishna Ganni, Founder and CEO - MartMobi

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