Retail goes from screens to palms

Indian consumers were still in a mode of becoming compliant to e-commerce when e-retailers moved a step further in m-commerce. Has it been a joyride?
Retail goes from screens to palms

Indian e-retail market has been booming with many a players strategising to engage their customers continuously. The Indian e-retail market which stands at Rs 3600 crore mark and expected to double by 2015, is a fiercely competitive market.

The Indian consumer which still lives with a mindset of quality consumption. In order to fulfil this  with maximised benefits, e-retailer are taking a step further leveraging the technology.

From computer screens they have now moved to mobile devices. The consumers who have been glued to their computer screens have made a faster shift than they did from brick and mortar to e-commerce.

Though started with failures, the mobile commerce space has been experiencing exponential growth in recent years, with smartphones and tablets offering the convenience of anytime anywhere shopping. The retailers are now leveraging mobile apps than mobile sites to offer a more navigational interface.

The services rolled out offer customers with content and services similar to what the e-commerce site would do including mobile payments, receive stock quotes and initiate buy/sell transactions in case of marketplace, or receive special promotions.

Mobile shopping and marketing tools such as daily deals and flash sales provide ecommerce sellers new methods of enticing customers. In the next three years mobile commerce will constitute more than 25 per cent of the total traffic in e-retailing. Big e-commerce players that have poured resources into mobile shopping, including eBay India, Snapdeal, Zovi, Croma, Dominos Pizza, Naaptol, Flipkart, HomeShop18 and YepMe, etc. In January 2013, 29 per cent of mobile users have now made a purchase with their phones. Globally, Walmart estimated that 40 per cent of all visits to their internet shopping site in December 2012 were from a mobile device.

Nikhil Rungta, Chief Business Officer, Yebhi.com, said, “India is experiencing a mobile phone boom with growing popularity of smart phones. Currently, there are close to 40 million smartphone users in India and we are only looking at this number rise rapidly. Therefore, mobile app has become more of a need then want. Online shopping sites are getting over 10 per cent traffic from mobile users.  People are not only browsing but also shop through their mobile phones. This trend is not only restricted to the top cities, as even non-metros are  witnessing a lot of ways of mobile for online shopping.”

Driving the Growth

There are 3 factors supporting the growth of m commerce in India including a wide mobile subscriber base; growing smartphone usage and third, a high number of people accessing internet from their mobile phones. The changing lifestyle and proximity to mobile phones also facilitates shopping on mobile. Mobile Commerce allows shoppers the ability to carry out safe transactions through their mobile phones, anywhere, anytime.

One such player is Bay India which has introduced a suite of apps to cater to the mobile shopper and aid his online shopping habits. The aim is to get customers to reach for their phone before they reach for their wallet to ensure they have checked online for the best selection and great deals.

Ashutosh Lawania, Co-founder, Myntra, said, “With mobile internet we expected to touch 165 million by 2015, and In the near future, about 15-20 per cent of all online transactions are expected to be via smart phones”.

Pointing to the quick growth of mobile use for shopping, 29 percent of retailers now see more than 20 percent of their traffic coming from mobile devices, In terms of revenue, 27 percent see more than 10 percent of their revenue coming from mobile.

Almost 1 in 3 retailers sees 10 percent or more revenue via mobile devices, Survey Report include 72 percent of retailers said they are currently selling through the mobile channel while 76 percent of retailers say mobile initiatives are key for reaching their strategic goals in 2013, up from 63 percent last year.

The consumers surveyed expressed a clear preference for mobile during the decision making process, with 60 per cent claiming to use mobile internet to make decisions in a store or while shopping online. Similarly, 40 per cent use mobile applications to make shopping decisions and 37 per cent use a mixture of the two. While 74 per cent of retailers to have a presence on the iPhone, 58 per cent of consumers prefer to shop and browse on other platforms, meaning that by developing for just the iPhone, retailers are ignoring a significant portion of their customer base.;

Challenges not over yet

Two big challenges faced by e-retailers are - the small form factor in case of mobiles (limited screen size) and lack of stable internet connectivity. Mobile-commerce in India has its own challenges. Smaller devices, patchy networks and low connectivity make it difficult for customers to enjoy a seamless and convenient shopping experience on the mobile. Also different device categories (tablets, mini tablets, smartphone) need different user interface and designs.  E-tailers should ensure that they are true to the needs of the customer on-the-go. HomeShop18 aims to provide the same or an even better experience to the customer on mobile as on the website.

Moreover, consumers are challenging the industry to adapt to the ways they live and shop today. Supported by emerging technologies, consumers will be more focused than ever on price and convenience.

Gains come along

On an average Indian spends 2.25 hours on mobile phone every day. Even while watching TV, 63% of people spend time on their mobile phones. So, to reach out the customers, it is important for retailers to be available on mobile sooner or later.

HomeShop18 is expecting 10% of its revenue in the next three to four years to come from mobile. Globally, eBay has been at the forefront of commerce on mobiles. eBay mobile finished the year 2012 with $13 billion in volume - more than double the prior year.  And it strongly believes in the exponential potential that mobile commerce will have in India. It is very likely that a majority of the next 100m internet users in India will have their first and pre-dominant experience of internet on their mobile devices, either smartphones or tablets.  One product every minute is purchased via a mobile device on eBay India.

Mobile shopping—This year, 15% of online retail sales will take place via mobile devices, according to eMarketer, up from 11% in 2012. By 2017, the percentage will rise to 25%. The conversion rate in the store for shoppers who use a retailer’s dedicated app is 21 percent higher than those who don’t—most likely because such apps can provide a more relevant and tailored shopping experience that helps people make an immediate buying decision.

E- Retailers Customer Acceptance Product sales most % of sale via M Commerce Year of launching  M-Commerce
HomeShop 18 25% Apparel 30% 2013
Yebhi.com 10% Apparel 25%  
Myntra 7-10% Apparel & Footwear 20%  
eBay India 92% Apparel 25% 2011

 

The movement

It’s been observed considerable growth in diverse traffic from mobile with high month on month increase in mobile internet traffic.  Sundeep Malhotra, Founder and CEO HomeShop18 TV, said, “We expect mobile traffic to hit 25% of our traffic in the coming months. We have seen purchases worth INR 30,000 or more and on average the transaction value is well worth of INR 1500. Number of app downloads is 1.25 lakh and growing”. In the next 3-4 years easily 10% of the business should be coming from mobile.

 Deepa Thomas, eCommerce Evangelist, eBay India, said, “Our recent eBay India Mobile Commerce Summer Shopping Survey indicated that 92% of all Mobile Commerce survey respondents were Male”. 39% of consumers were in the age group of 18-25 years & 31% of consumers were in the age group of 26-30 years, and 49% of Mobile Shoppers were from the Non-Metro cities of India. 57% of Consumers use 3G services, 32% use 2G services & only 11% use EDGE. 53% of consumers have downloaded the eBay app or surfed the eBay website via mobile phones / tablets.

Ashutosh Lawania, Co-founder, Myntra, said, “In the near future, about 15-20% of all online transactions is expected to be via smart phones which is a sizeable chunk and therefore cannot be ignored”. Currently, about 7-10% of all transaction on Myntra.com is via mobile device. We expect this number to grow to 20% by next year.



Why Consumers Shop Online

Price. They are comparison shopping and finding the best deals online.

Convenience. People want to be able to shop anytime.

Free shipping. More ecommerce vendors are offering free shipping, especially during holidays; Late technology adopters are putting aside their concerns about security and are buying online;

Daily specials. New online shopping models such as daily deals and flash sales are generating excitement and impulse purchases;

Mobile benefits. The capability to comparison shop, research products, and purchase from smartphones and tablets gives ecommerce vendors another advantage over brick-and-mortar sellers. Even in bad economic times, people will still shop when they are bored.
 

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