So another ecommerce player is going the app-only way. Flipkart has now decided that it will go the Myntra way, and become app-only by September this year. I had written earlier about Myntra's move in a blog post and why it makes sense for this company to be app-only. You can read the same here. Well, although Myntra reported a 10% dip in its revenue after the D-date, I am still convinced that this strategy will work for the company. One of the sole reasons for this is that Myntra is essentially a vertical ecommerce player. If someone has to buy a dress or an accessory, Myntra has got tremendous collection at good prices to lure the customer in. And frankly, there are no other players who are as good as Myntra when it comes to fashion and accessory shopping.
There have been many reasons cited by many experts when Myntra had first announced about the change in strategy, like low penetration of internet, slow internet speed in the country, trust issues during mobile payments etc. These have been revived again with the announcement from Flipkart. Though I am not refuting any of the above points, but I believe these issues are not going to be there forever and things will evolve. They always do. What I am concerned are 2 aspects which one should consider when thinking about an app-only strategy, especially a horizontal player.
1. There is a big difference between vertical and horizontal ecommerce players and a one-size-fits-all strategy may not work at all. Especially in a market like India. These marketplaces, namely Flipkart, Amazon, Snapdeal and PayTm, house nearly everything you have ever thought of buying. There was a time around 1-2 years back when a new wave was sweeping Indian ecommerce industry with manufacturers going for exclusive tie-ups with ecommerce companies. Flipkart had pioneered it with its announcements with Motorola and Xiaomi. Soon other players rushed doing the same, with Micromax and OnePlus choosing one ecommerce player over the other. However, this trend has slowly lost steam and companies like Xiaomi and OnePlus have put their wares in a competing warehouse as well now. One sole reason for this is to reach as many customers as possible. The fallout of this is that even the little bit of exclusivity which was available to these players is slowly fading away. Every product is available at every other site. A potential customer will buy a product from a site he is most comfortable with at that point of time. He is certainly not going to waste his time and data on downloading an app, when at the same time he can use that data in viewing another ecommerce player site and, possibly, completing the whole transaction. He is not concerned too much on the discounts (which are reducing these days anyway), but more concerned about the choices he can get at the time he wants them. Not having a mobile site and a desktop site seriously hampers a player's ability to capture that customer. It can work in a vertical player's business, like Myntra's, but an app-only strategy stands on a very weak footing for a horizontal player.
2. Despite some of the problems and challenges listed above (like internet penetration etc), the biggest challenge for Indian players can come from the ubiquitous Google. Google has already announced its intentions of bringing a 'buy' button in its search results. This same feature is already available for flight bookings in India (read my previous post on this here). Imagine searching for a product on Google, and the search results show the product along with prices and buy button from 3 players (competitors) and your site is not listed, just because you don't have a site anymore and only have an app. Let's think that even though Flipkart doesn't have a site, Google still gives the search results including listing from Flipkart along with Snapdeal and others. Still, if a customer clicks on the Flipkart link, it will prompt for either opening the app or downloading the same. That too, if the customer is on a tablet or phone while browsing. If, by chance, he is on a laptop (and there is considerable possibility for this), even the app-download option won't be there. And all the talks about 'seamless buying experience' and 'comfortable user experience' stand for nothing more than mere words. The "problem" of Google won't be gone, whatever happens in the ecommerce space. The best way for the players to tackle this is to turn this apparent problem to an asset. And that is possible when you keep open all the avenues (app, mobile site, desktop site, smartwatch option).
As I said earlier, an app-only strategy still makes sense but not for all the players. A Myntra, UrbanLadder, PepperTap, BlueStone can afford to think about the above strategy and potentially be available only as an app, but horizontal players can hardly afford this luxury anymore. It may lead to customer stickiness for a small section of buyers, a big section may totally avoid the troubles of downloading an app and instead do a Google search instead.
Please comment your thoughts below. Tweet to me at @NishantSinha88.
No comments:
Post a Comment