Mobile App Only Approach by eCommerce Giants — Successful Pivot or Regretful Decision?
Brands like Flipkart, Jabong, Myntra, et al have been pumped with a lot of money from investors in India and all over the globe. Indian eCommerce is the fastest in the world. These brands now possess not only a bag full of money, but talent who are the best in the world and who are determined and poised, not only to follow successful eCommerce models and strategies from the west, but to set world leading standards themselves. One such bold move, brands like Jabong, Myntra, have taken is that to go completely mobile only. Flipkart will follow suit soon, as well. Will this strategy deliver? We do not know. However, we can speculate if this strategy makes sense from both the consumer and the brands’ point of view. On paper, the concept looks bold backed by ominous statistics of the mobile sales, wireless internet through mobile devices in India. However, let us see some valid points which might help us determine the sanctity of this strategy and its pitfalls.
Might Lose A Lot Of Customers
The number of brands and sellers entering the eCommerce platform is a reason to cheer for us consumers. We end up with a lot of choices in various aspects while adjudicating which, what, where, and how to buy. The one, vital option which gives a consumer by shopping on the web is the factor of comparison, of prices, shipping terms, etc. When we end up buying a product worth thousands of rupees, we expect to spend a lot of time scrutinising its reviews and ratings, and looking for the best price, like a meerkat looking out at the horizon. Consumers wish to have such choices at their disposal while exchanging their hard-earned money for products and services. If the platforms go Mobile-only, it becomes a bane for the consumer to switch between browsers and comparison applications to determine the best deals. This strategy, asking consumers to jump from app to app will eventually bore them out of giving business. They will all end up buying on a platform which is available on all devices, not just restricted to one.
A case in point is Myntra. Search engines crawl websites only and not mobile applications, to give us the best possible results. Since Myntra has gone mobile-only, they don’t get listed in the results, which in turn stymies consumers with no option to compare products across different platforms.
Myntra’s Post Mobile-only Traction
Below is a graph depicting a fall in sales of up to 10% across all brands on Myntra since they have gone app-only.
While Myntra would have expected a dip in orders considering a change in user shopping patterns, they remain optimistic about growth in the number of orders/sales. In all probability, to counter the lack of response from consumers, Myntra may run a brief, heavy discount sale anytime soon. This will drive more people to access the application and possibly end up making a purchase. Myntra has tried offering discounts through apps during specific hours on specific days of the week, achieving no spike in shopper interest compared to previous sales. Here are the numbers Myntra have based their mobile-only strategy.
A mega sale might generate a lot of revenue, but profits? Companies such as Myntra, who have chosen to go app only would have to forget about making profits for a while till the shopping contingent gets the hang of app-led shopping experience. It is clear, even to a common man that India is a price-sensitive country when it comes to purchasing. Today, people buy on Amazon because they are running a massive sale. tomorrow it is Flipkart, and next Snapdeal. All of these platforms will see more orders during sales, why?! Because people buy stuff where it costs less.
User Experience Should Be №1 Priority
These platforms are not creating new shoppers through sales, it is just that, we are all hopping from one site to another to see who gives us the best deal (consumers can do so only on websites, and not on mobile apps). To sustain and captivate shoppers, these platforms have to offer discounts year around, which is nigh on impossible. So, all this running around will stop, eventually, as the discount-led selling strategy will stop. Then, the only thing consumers look for is choice and convenience to shop. Most of urban India sits in front of computers at work close to 6 to 8 hours a day. That is a staggering number of captive audience to leverage. Why would you switch on to your mobile phone to buy a dress worth a lot of money, while looking at the product picture by squinting your eyes at your 5 inch screen, when there is a 20 inch monitor sitting right in front you which can offer you a rich shopping experience? This logic somehow seems to elude Myntra and the likes. Below are some comments expressed by netizens on a news forum.
Privacy Policies On Mobile Apps
We have looked through mobile applications of Flipkart, Jabong, and Snapdeal on an Android device. When we read through the privacy policies, we get to see the clear picture, where personal and non-personal information may be used to provide a customised user experience. Such policies might not offer the best of deals to consumers once their shopping habits are determined, and especially when there is no way to compare prices. A pressing situation is that we were unable to find the privacy policy on the Jabong app, it might exist, at least its not easy to find it. Here are the screenshots of these applications. Below are Jabong, Flipkart, and Myntra’s privacy policy snapshots. We couldn’t find the privacy policy on Jabong, or if it exists, they have made it incredibly hard to locate it.
- Access to Personal information including name, age, address, contact number, email id, nationality etc.
- Access to Financial information i.e. all the bank and card details.Claiming that this information is used in interest of the customer for responding to queries, to provide them with the information and surveys and to facilitate the overall experience; the brands actually are producing their repository of database and are using the information for their business growth.
Apart from these, other policies include eligibility criteria to use the mobile app, like Myntra restricts its mobile app services from children below 18. But with the today’s scenario, children of even 13 years of age have smart phones and they shop using the app without any intervention.
Discounting is personalized and Hidden to world
One of the advantages of modern day software being available to sellers is that they can track and analyse sales figures from all marketplaces to help them strategize effectively. If these platforms go Mobile-only, then analytics ceases to exist for the sellers. Sellers won’t be able to determine if the App decides to offer extra discounts to its customers due to various reasons, and that might be the case sellers end up moving a lot on one marketplace and end up selling less on others. This is a classic move to retain sellers on the list and to draw more consumers to their Applications. A recent Goldman Sachs report suggests that eCommerce giants in India need more than Rupees 1 Lac crore for the next five years to counter revenue loss, forget breaking-even. As a result, there are lot of such loop holes platforms may or may not end up exploiting, to stay ahead. As in any business, encashing loopholes is not absent in the eCommerce sphere.
Flipkart’s Strategy To Go Mobile-Only Might Be to Get Bought By A Bigger Fish
The recent reports from many financial tabloids and other eminent sources declare that none of the eCommerce players are making any profits. There is a slight increase in revenue, no doubt, but to recover and justify the billions spent to run these platforms, and the revenue lost due to offering huge discounts on almost any product is highly questionable. The investors would always ask one simple question, “How soon can we get our money back and profits, if there are any?”. Since the profit margins look bleak, may be by choosing to go mobile-only, Flipkart would create a viable mobile-only shopping platform with a wide network of sellers and massive customer numbers, inviting mega companies such as Reliance Jio, Amazon, Facebook (as well), for a buy out. Such a prospect does not seem inconceivable, it may happen.
Build A Product To Make It Available For Acquisition
Jabong has been poking sticks at bigger brand names to lure and entice them for it to be bought. With the acquisition of Myntra by Flipkart, there is such a demand for a fashion eCommerce platform such as Jabong to compete, sustain and/or be purchased. In order for big brands to invest big money to buy such platforms, they scrutinise its numbers to determine the viability factor. To attract big monies, such platforms need to possess a USP, of some sort, which differentiates them from competition. May be, Jabong’s move might be to create such a niche product strategy by opting to go mobile-only, they become one of the big players who are available on close to 300 million mobile devices in the country. This is massive customer potential numbers we are referring to. The effort to create or turn Jabong into a mobile-only fashion eCommerce destination might as well turn out be a business masterstroke, making it more than a viable purchase for anyone who wants to go toe-to-toe with Flipkart, who have Myntra (has gone mobile-only, already) in its quiver. All we are saying is that, Jabong still has the customer experience in mind while devising to go mobile-only, but, the main driver to do so may not be the ‘customer’, but a shrewd business agenda to get acquired.
This move when Mobile is going on Web? WhatsApp, etc
Communicating applications such as Facebook’s Whatsapp, LINE, WeChat, and Telegram have vanquished the likes of Yahoo messengers and Google Hangouts. Since most of us use these ubiquitous messaging applications for both personal and professional reasons, it makes sense for these apps to get an extension on the web. Uber, Ola, Meru, you name it, and they are there, on the web, making it easier for the consumer to buy their products and services. While companies such as these have realised that, even applications which are in use for most of the day, should reside on laptops and PCs, we wonder what logic has driven Flipkart, Myntra, Jabong, and the ones who follow suit to cater through a single medium. Their loss will turn out to be a bargain of the century for established and upcoming platforms who are and will be available on all devices.
Innovation Should Be Consumer Centric
Innovations in all aspects are welcome. However, what should drive them, is by putting the consumer, or the end user at the centre of it all. In a general perspective, “going where the customer is”, is an adage, this helps create flexibility for customers to buy anywhere, anytime, and on any platform or device. It is also true that bold steps and decisions seem sceptical and are frowned upon until success through them is achieved. However, there is hope that benefiting the customer is what motivates companies and brands to set new standards, not only in India, across the globe as well.
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