Are Flipkart and Myntra correct in following a mobile app-only strategy?

Recently, many high profile e-commerce companies in India have opted for a mobile-app only strategy which involves completely shutting down their websites. Flipkart, India’s equivalent of Amazon and the leading e-commerce player in country, has shut down its mobile web site and plans to shut down its PC web site in another year or so. Myntra, a leading fashion e-commerce product owned by Flipkart, has already shut down its mobile web (WAP) site and is soon shutting down its PC-web site. These being the leading players in India, other startups and major players are considering emulating them.

But is this the right strategy? Let’s try and analyze it. Myntra and Flipkart’s decision to go mobile-app only and shut down their mobile/PC web sites can arguably be explained by following suppositions:

Mobile app users are more engaged compared to web users: Mobile app users come back to the app and transact many more times a month compared to their desktop or mobile website counterparts.

My analysis: On absolute numbers basis, it surprises no one at all that the number of mobile users has clearly surpassed desktop users in India. To take an example, Facebook’s India’s daily active users in India (DAUs) are at 55 million, out of which 49 million DAUs come through mobile (though these are not mobile exclusive and have a good amount of overlap with desktop users), accounting for over 89% of Facebook’s daily traffic as of December 2014.

Looking at above numbers, one should clearly expect “engagement” on mobile to outperform desktop. A mobile phone is a more affordable device, is a personal medium, and it remains 24x7 with the user which results in an average user checking her mobile over 150 times a day — but these factors were there in case of feature-phones also, so what changed with the advent of today’s era Smartphones? The reason engagement is over-indexing on Smartphones is because of two reasons, 1st — presence of an app’s shortcut on home screen, and 2nd- “push notifications”.

The reason engagement is over-indexing on Smartphones is because of two reasons, 1st — presence of an app’s shortcut on home screen, and 2nd- “push notifications”

Once you’ve installed their app on your phone, Flipkart/Myntra can send a push notification to you anytime they wish to do so. Just like SMS messages of earlier era, push notifications are extremely powerful. Today, an app like Flipkart/Myntra usually send 2–3 push notifications to a user per day which is almost always read, if not acted upon. Compared to this, a desktop or mobile website user of Flipkart can’t be reached unless she has signed up previously on the website, that too only via an e-mailer which have terrible conversion efficiency, or via retargeting which doesn’t scale very well. In terms of marketing spends, getting the mobile app installed is just a one time marketing effort while in case of website, the e-commerce players have to make efforts every time to get these users just back to website.

The fault with this approach is that it assumes that push notifications as a consumer reach medium are going to be freely accessible forever. This, however, may not be true. With App developers realizing the power of push notifications, each app these days has started sending 2–4 notifications per day. Assuming an average of 20 apps for an average user, this constitutes roughly 50 notifications per day — in addition to the regular P2P chat messaging notifications from one’s friends and family. This sums up to about over 100 notifications per day, which is a lot to take for a normal user. With the emergence of smart wearables like Apple watch, where notifications are the core use-case of the product, I find it hard to believe that Apple(iOS) and Google(Android) wouldn’t realize the problem with current scenario of notification spam and overload. Eventually, this may lead to a crackdown on push notifications— just like TRAI in India took an unfavourable view towards SMS spam and put strict restrictions on telemarketing, killing off the VAS economy in India.

We all know how Zynga was such a great gaming company until Facebook took its support off and changed the rules of “Facebook notifications”. Replace “Facebook notifications” by “Push notifications” and the same play may happen twice. We’ve all seen too many companies getting burned by building their business on top of an external party only to realize the gatekeepers don’t owe anything to them, ref. Zynga and Viddy (burned by Facebook), FreeAppADay (burned by Apple), Meerkat and external Twitter clients (burned by Twitter) etc.

Having a mobile-app only presence helps move fast and focus resources: They need to move as fast as possible to beat the competition. Hence, they can’t risk wasting money, resources or wait for cross-platform compatibility lest it slows them down.

My analysis: This is a lazy argument. These companies with billion dollars in funding have no crunch of resources. Cleartrip, a leading Indian travel OTA, has outed them with an excellent post few days back when it redesigned its mobile website. “There is a trend of brands shutting down their mobile sites in favor of mobile apps — they claim it is due to the overwhelming effort required to maintain all products across multiple platforms. We think that’s a terribly weak argument coming from companies that have no dearth of resources at their disposal. We’re committed to keeping Cleartrip accessible so our customers can use the channels they prefer. The web is one of the fastest and easiest platforms to develop and maintain (as compared to other front end platforms), and testimony to that, this entire project took us just 2 months to complete.”

Keeping an excellent website active is certainly not a herculean task especially when these companies already have pretty decent versions working. The argument for resource or cash crunch are frankly laughable in today’s heady times.

Search on mobile isn’t important: Search is increasingly irrelevant now in the app-only world
How Google sees Flipkart on mobile web

My analysis: I wrote a post about it in November 2013 arguing that apps are becoming better than a Google search in doing category specific-tasks and finding relevant information. However, Google search isn’t completely irrelevant on mobile. Google controls Android, and is now rewarding mobile web optimized sites in its searches. A good many number of users use it still as part of their discovery process. Voice recognition is improving and Google Now is integrating deeper into Android. With internet of things and smart devices like Apple watch emerging, Search continues to remain useful with Voice gaining more importance.

App-indexing and deep-linking make sure Search on mobile is already taken care of: Google’s app-indexing search ensures that even if the developer doesn’t have a mobile web site, Google search results would still show up results from Flipkart/Myntra as long as the user has their mobile app installed on her Android phone.

My analysis: This approach works only for the bigger developers as this assumes that almost 80–90% of users have your app installed on their Android phones at all times. India is primarily an Android market and hence this may not seem like a bad bet, but I personally don’t think Flipkart or Myntra would have more than 25–30mn monthly active Android devices installed. Out of a 80+mn Android users, this still leaves around 60% of users in market not being able to find any results from Flipkart/Myntra when they do a Google search on their phones.

This brings me to my final point:

The PC and web browser aren’t dead. Payment is still much easier and faster on desktop: Upsetting your own user community, many of whom are already loyal users, isn’t beneficial. A single company can’t change the user behaviour — certainly not Flipkart or Myntra.

No doubt, Mobile is eating the world and is the dominant medium of consumption. But the PC isn’t dead — every single user working in a corporate company owns a laptop, and spends 7–9 hours daily on it. I find it difficult to believe that a user would completely change her user behaviour and just because she wants to access Flipkart, she’ll in the middle of the day — stop using her laptop and open her mobile phone to access Flipkart.

From the recent Net-Neutrality and Airtel Zero episode, we’ve seen that Flipkart (and certainly not Myntra) isn’t treated as a utility service and consumers do consider them expendable. Unlike Messaging (WhatsApp/WeChat/SnapChat) or Social network services (Facebook/Twitter/Instagram) which are used for many hours per month per user, my hypothesis is that an average user doesn’t transact more than couple of times a month on an e-commerce app. If this is true, then Flipkart/Myntra may be imprudent to inconvenience their loyal users even more.

User privacy and the future of push notifications

WeChat (disclosure: I work with WeChat) has already taken a lead in managing P2P vs brand notifications on its platform. Messaging is the lifeline of all notifications and is the primary reason why users bother about them. After all — what do you care about more? A WhatsApp/WeChat/iMessage from your spouse or a discounted deal offer from an e-commerce site that’s anyways going to be repeated two days from now.

In case of WeChat, P2P user notifications are treated separately from Brand notifications. All P2P user communication notifications can be passively consumed and appear on main Android/iOS notification panel. However, all brand notifications can only be actively consumed i.e. a user has to consciously open the app and check brand notifications inside a separate section called “subscription accounts” if she chooses to. There are also restrictions on the number of push notifications that a brand’s official account can send per day. As a result, the overall experience of notifications on WeChat is extremely clean and spam free.

Brand notifications on WeChat: Note they’re inside a separate section called “Subscription Accounts”

I’ll go on a limb here and predict that Apple may in near future get inspired from WeChat and give even more enhanced power to users on controlling push notification spam. Yes there are some who’ll say that both Apple and Google already give powers to users to control push notifications but generally these settings are hidden inside and not easy to change. Even Facebook always had user settings for controlling and turning off Zynga’s notifications during Zynga’s hey days (pun intended) — but that excuse didn’t save Zynga later.

In conclusion, Flipkart and Myntra’s mobile-app only strategy may look like a bold move into the future but is based on a short term thinking. As argued above, I believe the decision to shut down their perfectly functional PC and mobile web sites is a gratuitous move and might come back later to bite them.

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