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Flipkart’s calculated risk with Myntra’s app-only avatar

The year 2014 was the year of ecommerce for India as e-tailers introduced flash sales, better products for consumers and consumers took the digital route more than expected to make purchases, in all seeing big bang funding for the sector.

The uptick in the smartphone penetration in India has lead to widespread discussion of ecommerce players adopting the app-only model for better engagement. Market pundits say that the app story will boil down to every consumer having only a limited number of apps on their phone and the fight will be between leading ecommerce platforms in India. Everyone wants to become the app of choice on smartphones before the rival launches a better one. In such a scenario, Flipkart is taking a calculated risk when Myntra goes into an app-only avatar.

Marketers are arguing whether it was a premature move or just in time before rivals can bank on the opportunity. Is it still going to take a couple of years to convince the industry for an app-only marketing approach? Will the app-only gamble pay-off or the industry needs to mature further?

Majority agree that Myntra has taken an ahead-of-the-curve move, as the industry moves towards ‘internet of everything’ in India. Myntra and Flipkart have cited numerous reasons including numbers to explain the reason behind the move. It should also be noted that Flipkart has been taking various steps including a large scale campaign to promote its app with consumers. The Myntra experience will also carve out do’s and dont’s for a situation where Flipkart may consider an app-only avatar.

Vivek Bhargava, Chief Executive Officer of iProspectCommunicate2 believes that it is not a gamble because Myntra can still use Flipkart as back-up as long as it remains available on web browser. Further, “the Myntra app will give a superior experience to the smartphone user largely because of its offering – fashion and lifestyle. With personalisation and inclusion of videos on the app platform, the approach works better for fashion than any other category.”

According to market research, close to 95 per cent of internet traffic comes through mobile device and more than 70 per cent to sales are converted by the mobile device. Also, the Myntra app enjoys more than 9 million users already and is targeting another five million downloads in next quarter on back of spike in the consumer engagement.

Therefore, the fashion and lifestyle portal does not stand the risk of losing out on consumers with an app-only approach as mobile guides the way ahead.

But there are those who are more skeptical of the move and think that Myntra is indeed playing a high-stake gamble. Rahul Narvekar, Co-Founder and Chief Executive Officer of NDTV Ethnic Retail Ltd’s Indianroots.com said, “There are still many who are logging through desktops. Despite the phenomenal growth in smartphone penetration, India is a very young country where infrastructural and bandwidth issues continue to a constraint. I do not see it becoming successful for the next couple of years.”

“This is a premature move as the Indian industry has not graduated to a level where each individual owns and smartphone and can download as many apps. They still need the browsing feature,” said industry veteran Pratap Bose.

The Indian marketing industry is moving towards mobile and it will soon become the only device but currently the mobile industry is leading with issues of bandwidth, poor internet connectivity and apprehension towards mobile payment option, Mr Bose added.

Mr Bhargava reiterated the sentiment and said the app-only approach may not work for Flipkart largely because of its generic offering and some of their products do not pan out well in the customisation aspect.

Ecommerce players are mulling over the app-only approach as it drives loyalty and revisits for the brand which is not possible for in web browser-based scenario. Nonetheless, Myntra has made a bold move to boost the mobile story in India and transform ecommerce in India but only time will tell if the gamble will pay off or not.