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Flipkart’s app-only approach: a game changer for ecommerce?

How many ecommerce apps do you have on your phone? Is Flipkart one of them? If you are a loyal consumer of Flipkart, then its app is soon going to feature on the list of top apps on your phone. In an internal interaction with Flipkart’s employees, the ecommerce major’s Chief Technology Officer Punit Soni informed that Flipkart will be going app-only from September. In a manner of speaking, Flipkart has tested waters in discontinuing the website avatar with its fashion offer Myntra, that became part of the group following an acquisition.

Changing paradigm
Will the ecommerce giant’s app-only route be a game changer for the business? What do digital marketing experts in India think of this move? India is already leading the way for mobile commerce. According to a recent market research by Dyn: “In India, 65 per cent consumers make at least 25 per cent of their purchases through phones or tablets, shortly behind China at 80 per cent.” It would appear Flipkart has embraced app-only after careful analysis of the mobile scenario in India. “India is poised to become world’s second largest smartphone market and first computer screen that most Indian’s will see is through the mobile screen. Also, analytics and customised experiences are more powerful on the hand-held devices than any other,” reiterated Pratap Bose, Chairman of The Social Street, a digital marketing agency.

Myntra went app-only on May 15, 2015. Though the figures of how the move fared have not been released yet, Flipkart’s decision reflects a confidence in the approach. Mr Bose explained, “Flipkart’s management utilised Myntra as a beta for the mobile first strategy. With only a small drop in sales, Myntra was able to continue selling through its mobile app. Keeping the success of Myntra in mind, Flipkart has also announced the same for itself.”

Upping the mobile traffic
Flipkart is also rising high on the mobile wave and increased smartphone penetration in India as about 70-75 per cent traffic for the platform comes from mobile. In an official statement, the company said, “India is gradually transitioning from a mobile first to a mobile only country. We are constantly experimenting with various aspects of our service to create the best shopping experience for our users on our app. Meanwhile, we continue to offer both desktop as well as mobile option for our customers.”

Ranjoy Dey, Head of Digital at Havas Media India said, “Flipkart will be looking to convert its 70-75 per cent mobile traffic to 100 per cent. It is a futuristic, ahead of the curve move that will help it manage costs effectively. Maintaining three different platforms – desktop website, mobile website and app involve investment in terms of updating and upgrading but if the brand can make a cut in even one of the platforms, it will bring down costs substantially.”

According to Sanjay Tripathy, Senior Executive Vice-President of Marketing, Product, Digital and Ecommerce at HDFC Life, a large number of marketers in India witness at least 50 per cent traction from mobile platforms. “The move is a testament to realisation that everyone is connected with mobile internet and mobile gives better penetration for the platform. Concentrating all efforts towards one platform will help Flipkart come under the category of an elite strategy profile. Flipkart will be able to save on the money it is spending to driving traffic to its website as the app will bring dedicated traffic to the platform. Through the app-only approach the platform can also create an ad network and generate a new revenue model for Flipkart,” Mr Tripathy added.

Locking in the consumer
In the new age marketing arena, marketers will be looking forward to mobile optimised platforms to leverage the benefits of mobile. Analytics services offered by Google, predictive analysis for the consumer, and profile from telecom service providers, among others are more accurate if the consumer accesses the mobile platform. Therefore, while creating a buzz around Flipkart adopting the app-only strategy marketers must look at the financial and the technological front.

Gaurav Pathak, Chief Operating Officer of Razorfish further added to list of reasons for Flipkart to take the app-only call and said, “Key reason for Flipkart to take the app-only approach is that these players want to stop price comparison across different platforms in a price sensitive market like India. As we all know, comparing prices on mobile apps becomes an almost impossible task and to save time and resources the customer will have to accept the price quoted by the particular mobile app.”

Consumers in India are always trying to secure the best possible deal and at the cheapest price and an array of variety gives him the liberty to do so. But with Flipkart going app-only, the e-tailers will be able to lock the consumers at the platform as this will make the toggle between different platforms difficult. “For us, 85 per cent of the business is happening on app. Retention and recall is definitely higher on app but not everyone maintains bookmarks or remembers the right URL. The app creates more loyalty and stickiness to the brand as against the website,” commented Upasana Taku, Co-Founder and Chief Executive Officer of MobiKwik.

“The number of desktop users is extremely small in India. Brands are placing more attention and engineers on their app platform than their website. The opportunity is so large in mobile that we can expect more players in the industry becoming app-only,” she added.

The good move
“Flipkart is unarguably the leader in the e-tailing space and this move will pressurise others to second guess their current web and mobile strategies. If the move works they will be one of very few players (leaders in their geography) across the globe that have gone mobile-app only and continued their leadership position in the market. I am sure Amazon, Snapdeal and others are closely watching Flipkart to ensure that if the strategy works, they are not left far behind,” added Mr Bose.

Unlike a skeptic mood in the follow-up to Myntra going app-only, marketers have a positive sentiment following the Flipkart announcement. The e-tailing industry is projected to grow to a USD 76 billion opportunity by 2021. Therefore, marketers believe that there are immense opportunities in the app-only space and more players are expected to join the space. However, its execution will require deep insight into the mobile marketing dynamics at play.