Points of View: Is going 'app only' a safe bet?

By Sohini Sen , afaqs!, Mumbai | In Digital | June 09, 2015
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Ever since Myntra went app-only, speculation has been rife that others may follow suit. We try to figure out if the rewards outweigh the risks.

On May 15, 2015, one of India's biggest e-commerce players, Myntra, closed down its website and went app-only. Shoppers who logged on to the website were politely asked to download the app on their phone, or were redirected to the app on play-store by default.

While mobile penetration in India has been the talk of the town, it cannot be refuted most of us still use our computers to shop. The choices available while surfing the net become limited when using just an app. Moreover, Indian m-commerce has still not grown that fast and people are still unsure of transacting over the phone. This could be due to bandwidth issues or the fear of fraud.

Is going 'app only' a safe bet?

In such a scenario, does it make sense for a company to bid goodbye to its online platform? How can the risks be minimised in such a case? And will a well-established company suffer more than a new entrant in case it goes the app only way? We spoke to a panel of experts to find out.

Prasad Kompalli,
Head, eCommerce Platform, Myntra

The idea of going 'app only' stemmed from the need to serve our fashion-savvy customers in the best possible way. As fashion is a personal experience, we believe that only mobile can truly deliver this experience as it captures the user's lifestyle and context in a manner that the desktop cannot.

However, this transition would not have been possible a couple of years back. With the number of smartphone users expected to grow to 250 million by the year-end and mobile operators constantly increasing data bandwidth and reducing usage costs, there lies a huge untapped opportunity. Mobile is increasingly driving the e-com revolution across the country. We have witnessed significant increase in online purchases from Tier-2 and Tier-3 cities.

The question of whether it is suitable for a business depends on the respective business model and the way it intends to reach out to their customers. Customers ultimately look for the value proposition. One of the factors that come to the fore when deciding on the purchase is the ease at which one can carry out a transaction. M-commerce has made inroads into sectors that were once thought of as impracticable. The greatest example is the fashion category. And today we stand a testimony to its successful implementation.

Within a short span of time, we will witness a surge in the adoption of mobile platform as more and more companies realise the benefits of having a deeper engagement with consumers, not just in the fashion space but across other segments as well.

Rathin Lahiri
CMO, Meru Cabs

Rathin Lahiri

Firstly, Indians are omni-channel. Even the heaviest of our app users use desktop computers at times. We want many options to choose from.

Broadly, there are two categories of products. Some categories are pre-decided and some are impulse buys. So, while for a phone you will do your research, you may just buy a book while browsing a site. And if I am not wrong, the impulse buying category is in double digits for most e-commerce players. But you cannot do impulse buying on an app, because you have to consciously download it, open and search for products on it.

Indians are also deal seekers. They will compare prices of products, the quality and recommendation or reviews and delivery times for each from different sites. Comparison shopping is not possible on an app. The Meru app gives us over 65 per cent of our business, but the web still contributes a little over 10 per cent. We push our consumers to the app all the time but still give consumers the option to book on the web if they choose.

Strategically, one may want to move the highly engaged users to an app. But that will happen gradually.

Harshad Hardikar,
COO, Indigo Consulting

Harshad Hardikar

The market, according to me, has not matured enough to go app only.

We must realise that many Tier II and Tier III clients have their first net experience on mobile. There are more mobile phones than computers. So, broadly speaking, the direction is right. But a lot of people want exposure and variety. And that can only be given on a wider screen.

Myntra specialises in apparel. Therefore, there is all the more reason to build a desktop experience. For apparel, things like screen size and resolution and maybe the bandwidth are things one must keep in mind. Categories like apparel look better on a wider screen. People may gradually move towards apps and transact through it. But not right now.

India is still not a mature market for e-commerce. The country has so many e-commerce players that if everyone started being available only on apps, there would be no differentiation for the consumer. That said, an 'app only' strategy makes sense for established and big players. The newer ones will have to make their mark first before going down that road.

Praveen Sinha
Co-founder and managing director, Jabong

Praveen Sinha

More and more people are using online shopping not just out of convenience but also as a matter of necessity in their fast paced lives. We want to reach out to our customers in all possible ways and be able to give equal importance to both the mediums - mobile app as well as website.

Internet access is still not very affordable and accessible in India and inconvenient to use via mobile devices for many potential customers. Downloading an app and using such services would take some time and doing away with the website means losing out on this audience. The proportion of turnover being generated from tier II and tier III markets in India is growing and it is important to reach out to all.

While some e-commerce companies or brands are app only, Jabong does not plan to follow suit. We are able to amass equal traction from both media and want to reach out to our customers in both ways. Though many players commenced with an 'app only' function in India, it was purely due to the fact that they were already established brands in other markets and could play it for their own advantage.

K Vaitheeswaran
E-commerce consultant and founder, Indiaplaza

K Vaitheeswaran

The highest smartphone penetration in the world is in South Korea, where two-thirds of people use smartphones. And 100 per cent of them have shopped through their phones at least once. Yet, less than one-third of all online shopping is done on phone. Therefore, in no way can a country like India be ready to go mobile only.

Though m-commerce is a great talking point, it is going to hurt the business if a brand decides to go mobile only. Because it might be true that 90 per cent of a brand's traffic comes from mobile, but less than 70 per cent of its transactions will happen through mobile. So you see, buying and browsing are two different things.

One reason for going app only is that the brands are looking to curb browsing and window-shopping, which cannot happen so easily on an app. That said, an 'app only' model makes sense for a brand like BookMyShow or for flight ticket bookings. There is no product that has to be checked or touched. It is a ticket and is easier when you have it on your phone itself. But for apparel and electronics, I don't see how it will work.

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