The smartphone is the new sun and everything else orbits around it,
wrote mobile analyst Benedict Evans in 2015. The growth of e-commerce worldwide is a testimony to this. With 235 million people accessing the Internet only via mobile, online commerce in India is fast becoming ‘app-commerce’. Mobile websites are gaining significance too, but apps are more critical as they offer personalisation and help e-commerce players understand consumers better; communicate with them more frequently; and target them with relevant products based on their browsing history.
Building the app world
The days when app developers had to educate entrepreneurs about the benefits of native apps are long gone. Saurabh Gupta, Co-founder and CEO, Urban Piper, says,
Even small and medium-sized enterprises (SMEs) want their own native apps now, so that they have better control over the experience and can save on royalties paid to aggregators.
In a mobile-first country like India, only players who figure out m-commerce can ultimately succeed. But poor infrastructure and low-end smartphones pose a challenge. Not all users have the bandwidth to update to the latest version of different apps regularly, leading to 20-30 versions of an app floating in the market on different smartphones.
Of course, the app ecosystem is still new. According to Manoj Gupta, Founder of Craftsvilla, 65 per cent of users uninstall the app after purchasing an item. Craftsvilla gets 25 per cent of its GMV from its app, with a conversion rate of 50-60 per cent.
More than just selling and buying
Going the extra mile in e-commerce, the biggies of e-commerce have also entered payments. Snapdeal acquired Freecharge in 2015 to offer a more seamless shopping experience to end users. Flipkart and Amazon are working on payment solutions too.
Wishy Arora, VP - Products of mobile deals marketplace Little, believes that the last mile of mobile commerce depends on mobile wallets, and the scene is likely to explode in the next 12 months. He says:
E-commerce players are realising that payment is a strategic lever to ignore at their own peril, hence, they need a wallet to gain competitive advantage.
According to him, Paytm is in pole position to be a winner (having got a payment-bank license from the RBI last year.)
Unconventional players are now joining the e-commerce race through payment systems. Facebook’s recent tie up with payment gateway CitrusPay for net banking transactions is seen as a step forward for the social network’s entry into e-commerce. There are similar instances in China, where about half of total online commerce in 2015 came via the mobile platform.
Mobile commerce has exploded in China with WeChat, a messaging platform that has grown to incorporate gaming, payments, and Internet services. But the Chinese model of interactive shopping may not work in India. Hari Palapetty, Product Manager (mobile apps) at BigBasket, is not in favour of this model. “WeChat started with a different vertical; they had a massive user base. They created a community for conversations, and realised this is what their users want,” he says. He believes that simple, user-friendly apps are the best choice for e-commerce.
Shopping often becomes a collaborative experience with discussions over chat apps. Flipkart attempted to bring chatting and shopping together with ‘Flipkart Ping’ in August 2015, but has failed to make waves. This is probably because of the complexity involved in sustaining and scaling, besides technical issues. ShopInSync, founded by ex-Yahoo veterans is also in this space.
As m-commerce allows high-level targeting of customers without having to change the backend operations much, demand from end-consumers and businesses have also increased. Many players like Snapdeal are now experimenting with features like geo-tracking in real time.
Saurabh of Urban Piper says: “App developers are now expected to develop light apps, with low loading times, where images are loaded in the background, and users have a smooth user experience. Our (SME) customers ask for the ability to segment users by location to send targeted promotions and offers.”
It is key that the app not eat too much space. Urban Ladder, in fact, came up with three different apps - the core one with less than 5MB. ShopClues, which is trying to get lighter apps, is also ensuring regular updates on its existing versions. But content, after all, is the king. Shankar Nath, senior vice president at Paytm, says that it is of paramount importance to keep app size low and still deliver great content. Paytm has seen their mobile orders rise to more than 80 per cent from less than 50 per cent in two years.
Vernacular is the way
The rising number of orders from Tier II and Tier III cities have prompted e-commerce players to adapt to multilingual content. Snapdeal launched its multilingual interface in December 2015. But Chief Product Officer Anand Chandrasekharan says that going vernacular is a long-term commitment. He adds:
Currently, most of our users have heard of Snapdeal [even without the Hindi and Telugu versions]. Once the Internet reaches the people who communicate only in their native tongue, there is a sequence of adoption – they will first adapt to [online] communication and then online shopping.
Paytm and Voonik are doing the same. “For users who are not comfortable in English, we have to keep the interface simple and visual,” says Sujayath Ali, Co-founder of Voonik, which gets 70 per cent of its users from outside metros. Manoj of Craftsvilla agrees. Besides customisation for users on their app, Craftsvilla is bringing in natural language processing (NLP). They are launching vernacular content by the end of this month in Hindi and all South Indian languages. They are introducing content strategies showcasing the story behind each product – mentioning where the raw materials come from, who is making it, and time taken to finish production among other things. About 70 per cent of their app orders are from outside metros.
Possibilities of virtual reality
The augmented reality and virtual reality (AR/VR) sectors are seeing a lot of interest from VCs and tech giants because of their numerous applications, one of which is in e-commerce. China’s Alibaba Group recently led a $793.5 million Series C round in Magic Leap, a stealth mode startup in the AR/VR space. Facebook’s also recently launched Occulus Rift to cash in on the social commerce wave.
Closer home, Quikr recently invested in A N Virtual World Tech Ltd, which runs a hyper-local search engine providing 360º street views under WoNoBo.com. Urban Ladder, which innovated in virtual reality earlier, is coming up with kitchen configuration technology. But Rajiv Srivatsa, Co-founder and COO, says that current smartphone devices are not efficient enough to leverage the possibilities of virtual reality.
Assume that you are wearing glasses and you walk into the [virtual] kitchen. Today’s devices won’t do a great job – the glasses are not very developed either; you might feel giddy.
According to Rajiv, VR as an industry will grow in the next two-three years and start identifying what kind of content, camera angles, and image resolution will work for users. “Facebook, Google, and Amazon are all investing in it. Customisation cannot always be done physically, you have to emulate and that is possible only through virtual reality,” he says.
Damned if you do, damned if you don’t
The numbers speak for themselves. ShopClues, which gets 70 per cent orders from their app and mobile website together claims to have seen 200 per cent growth in orders on app in the last one year. Snapdeal got more than 90 per cent of its orders from their desktop site till about a year and a half ago; now it is 25 per cent. Flipkart gets 75 per cent of orders from app.
But growth by numbers is not sustainable; more important is how they use the mobile platform. In 2015, Myntra and Voonik shut down mobile and desktop websites, and took an ‘app only’ approach offering better discounts and merchandise exclusively on their app. But limited real estate on low-end smartphone devices led many users to uninstall the app after a transaction to make room for messaging or other apps they used more frequently.
Nitin Agarwal, Assistant Vice President, Marketing, ShopClues, says: “Companies and brands will push for it as an app environment gives you more control than the desktop website. But some companies have come back to the mobile site as people find it hard to discover products on app.” Realising that they may have ventured too soon to the app-only party, many relaunched their desktop and mobile websites. Voonik now gets 62 per cent orders from the app, and 22 per cent from the mobile website. Myntra also reopened its mobile website recently.
But even with a website, apps function subjectively. For purchase of higher ticket rates, like a refrigerator, an average user would want to view the product on a computer screen. Arvind Singhal, chairman of Technopak management consultancy, says:
App-based solutions are valuable only for purchases or transactions made on the go.
He warns that when it comes to purchases not made on the go, people take decisions after research on the desktop website.
Mobile is the internet now
Benedict Evans believes that we should stop talking about ‘mobile’ Internet and ‘desktop’ Internet, “It’s like talking about ‘colour’ TV, as opposed to black and white TV. We have a mental model, left over from feature phones, that ‘mobile’ means limited devices that are only used [while] walking around.”
Modern smartphones are equipped with sensors that track ground-level data that laptops cannot. Benedict opines,
Really, it’s the PC that has the limited, cut-down version of the Internet.
As app-commerce gets bigger, mobile technology is getting better. Virtual reality, mobile wallets and geo-tracking are becoming ubiquitous, as are multilingual content and light weight apps. It is no longer a question of whether e-commerce will transform into m-commerce, but how soon.
Graphics by Gokul K and Aditya Ranade
- Online shopping
- e - commerce
- virtual reality
- online commerce
- Rajiv Srivatsa
- Saurabh Gupta
- Benedict Evans
- Mobile commerce
- Sujayath Ali
- e-commerce players
- magic leap
- desktop site
- Manoj Gupta
- hyper-local search engine
- smartphone devices
- Arvind Singhal
- Urban Piper
- payment solutions
- Shankar Nath
- low-end smartphone devices
- kitchen configuration technology
- Nitin Agarwal
- Anand Chandrasekharan
- Hari Palapetty
- Wishy Arora
- A N Virtual World Tech Ltd