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App-Only Strategy : Digging into the facts and figures

Going app only has been a new trend among the e-commerce retail business. Many of the entrepreneurs are strongly willing to adopt this strategy with a small fear – will it work for me?
It seems like even few VC are slightly inclined towards this strategy. Of course, by now most of the VC has stopped funding startups which don’t have mobile roadmap.

Myntra – the pioneer of this trend – went app only on May 15th. Myntra claims that close to 95% of their Internet traffic and over 70% of sales come through mobile devices. They also claim that more than nine million users have downloaded the app so far. With the introduction of new features, Myntra is targeting the next five million app downloads in three to four months.
 
Currently, only 15% of the mobile phone users in India are smartphone users, but that number is set to increase. With 232 million internet users, India is also the third-largest internet market, with nearly 65% of the country’s internet traffic coming from mobile phones. However, According to a recent study, 90% of smartphone users in India use apps, which is close to 158 million as of today.

Given the market penetrating of smartphone and internet, it would be a good move for few of the e-commerce retail to go mobile only. Here is another possible reason why Myntra went mobile only.

Most fashion e-commerce businesses in India lose 50% on each sale they make (public data). This includes dead stock, returns, costs of delivery, etc. The money also goes for reasons of building audiences and loyalty. Going app only will starving people of access to large, popular internet brands. Hence every order would be more definitive and have a better chance of getting closed without returns. Thus becoming ‘app only’ is good to save losses.

Apps provide more data on user, and hence, allow e-commerce giants to personalize user experiences based on interests and requirements gathered from user’s buying and browsing history. Companies have learnt that mining data about user behavior and experience will bring in more value to the business. This has made even small players to consider the app only strategy. However, does this work for every one? – Small and giant combined

Even Flipkart’s has considered this strategy from last few months. Currently Flipkart’s mobile app accounts for 70-75% of the total traffic. It is observed to be increasing as company started giving offers only on app. However, according to company insiders, “Major sellers who retail white goods, electronics and large appliances are not convinced about the move. Flipkart might pick up the project (to go app-only) soon.”

Having thrown light on why app-only strategy can help. Here is a flipside of it.

Going App-only way may be good decision for the Leaders, as they already have more than millions installs & mobile manufacturers are offering devices with these app pre-loaded, but it will be really tough for startups.Users will not download app until unless it’s not well known.

Takeaway: Keep things simple; get ready with desktop & mobile websites. Attract users & keep watch user behavior then take the decision.

Author: Sachin G Kulkarni, Technical Lead

Author of this blog is web developer specialized in creating internet based business solutions. He has been in this field for nearly 5 years and have involved in building unique elegant business solution. He is a blogger, entrepreneur, developer and overall thinker. He holds a master degree in computer science which has helped him understand in-depth technology. He stay in startup hub ‐ Bangalore ‐ this has helped him to meet many wonderful entrepreneur, designers and like minded people.

Linkedin : http://in.linkedin.com/in/sachingk

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