Why Flipkart is going app only?

There have been recent reports that Flipkart is following suit, after Myntra, to go app only from September 2015. This has not been confirmed by Flipkart to the media but was apparently announced in the monthly town hall by Punit Soni, Chief Product Officer at Flipkart.

This is interesting in many ways. Flipkart must have seen the response from making Myntra the guinea pig in this test of app only and probably convinced with the results. Their 70–75% traffic comes from mobile devices. Although there is no doubt of the mobile penetration in India, lot of people are still divided on mobile only strategy and there are multiple reasons for it.

Possible reasons for Flipkart to go mobile only (though not convincing enough) could be :

1. Its not profitable to have a presence on the web. If 75% traffic is driven from mobile then with the assumption that majority of sales are also coming from mobile could be true then its not profitable to support a desktop version of the site. Considering Flipkart is still not profitable, this might be a good idea to cut down on costs, or so the management thinks

2. Cut down on competition. When users are searching and buying from within the app, the chances of them searching for the same product on the internet or a competitor are none. Eventually the idea would be to make Flipkart app the default shopping app on every phone and the first place the user goes to search and shop.

3. Apps are more powerful than websites. There is so much you can do from within an app that is no way possible in a website. You can make it more engaging, personal, and customized to consumer needs and habits and making it addictive to consumers is lot easier. Once you have built these features in an app and the consumer gets hooked to it then your app does become the default shopping destination for consumers

4. Simply trying to be different? Well probably not the core reason for anyone to make this move but could be a favorable factor for such a move.

If Flipkart manages to get the above right then the move makes sense, but if not, then it can go horribly wrong for Flipkart. I personally think this is not a wise move for following reasons:

1. Indian consumers are not brand loyal. When you look at the core reasons why an ecommerce venture will fail in India or what problems ecommerce ventures usually face (including FabQue) is that Indian consumers are not brand loyal. They usually like to search for the product on the internet, find the best price and then purchase it. If the product is available on a site that is completely new with very little or no presence on the internet, they would still give it a chance. Even if they have made 100 purchases from Flipkart before, if the product is available cheaper some place else, chances are they’ll take the risk and buy it from the other site, so expecting users to always make your app the default shopping destination is a bit naive. Flipkart has managed to build a brand and trust with Indian consumers but there’s still a long way to go.

2. What’s driving traffic to Flipkart? I don’t have the statistics but if 75% traffic is coming from mobile, what percentage of it are direct hits? If the mobile traffic is still driven from searches then there is no basis to go app only. This would defeat the purpose. Also most of the traffic to Flipkart might be coming from price comparison sites and going mobile only might not help here either.

3. Search and Shop: I have deliberately used this term above as Indian consumers usually do this in tandem. They search and then they shop. Not sure mobile only fits into their Psyche or shopping habits, atleast yet.

4. Flipkart consumers are not impulsive buyers. It’s not that users visit Flipkart to discover new products. They already know what they are looking to buy. They search for it first on the internet and buy it from the site where its the cheapest.

5. It’s too soon. E-commerce is imploding in India and Flipkart is a major player but it’s still very soon to predict how and where this industry will go. There will be different sites doing different things, bringing innovation and new USP to disrupt the market. Amazon is a global leader in this space and it still doesn’t make sense for them to app only in any country.

Ideally Flipkart should have built the app and test the addictiveness of it with consumers and gathered some feedback before making this transition in a phased way. Time will tell if the move was revolutionary for all other ecommerce sites to follow suit or was a disaster for Flipkart

In the end, I think its the Indian Consumer who is at loss here.

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