Myntra’s U-Turn: e-commerce back to the basics

Apps might be the best way for a personalised shopping experience, but in a buying behaviour driven market an app-only strategy could leave players with a narrower sales-funnel, say experts.

Written by Ranaditya Baruah | Updated: May 13, 2016 9:54 am
According to a report by IAMAI, mobile internet users in India are expected to reach 371 million by June. Despite the fast rising traffic not much is translating into sales. The report says only 13% of urban users opt for online shopping. (Illustration: C R Sasikumar) According to a report by IAMAI, mobile internet users in India are expected to reach 371 million by June. Despite the fast rising traffic not much is translating into sales. The report says only 13% of urban users opt for online shopping. (Illustration: C R Sasikumar)

In May last year, e-tailing firm Myntra had announced that it was winding up its website and moving all its operations to its mobile app. Twelve months down the line, the Flipkart-owned company has decided to end its app-only experiment and relaunch its desktop website operations from June 1. The move has potential ramifications for the country’s nascent e-commerce sector, especially since this experiment was being closely monitored by peers as a validation of whether the app-only strategy heralds the future for a sector where a majority of consumer transactions were happening over the mobile phone.

Thanks to high traffic on mobile, app-only model was considered the future, something that Myntra had cited as a reason for the switch in May last year. Myntra had justified the move by saying that over 70 per cent of their traffic is driven by smartphones and mobile users and that having an app-only model would help them in providing personalised shopping experiences to its users. Despite continued high-mobile traffic, what made the e-tailing major to rollback its decision in less than a year?

“The customer journeys in recent years have been evolving to take advantage of new technologies. While mobile apps are at the nucleus of overall customer experience, significant traffic to leading e-commerce websites is still driven by desktop browsers. In a market driven by consumers’ buying behaviour, app-only strategy is likely to impact e-commerce organisations by having a narrower sales-funnel to start with. It is generally not an ‘either or’ decision,” said Ashvin Vellody, partner, e- commerce & startups, KPMG.

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The re-launch of a full-fledged site, Myntra admitted in its statement issued last week, is aimed to provide convenience to “a segment of customers, especially women customers, who have a marked preference for browsing and shopping on multiple platforms such as mobile, tablet and desktop”. Myntra also claimed that opening its desktop website will increase sales by 15-20 per cent this fiscal and bring back the customers it had lost by switching to the app-only strategy.

A formal query send to parent firm Flipkart seeking details about Myntra’s change in strategy did not elicit a response.

According to a report by Internet and Mobile Association of India, the number of mobile Internet users in India is expected to reach 371 million by June this year. Mobile Internet user base in the country has increased from 238 million in June last year to 306 million at the end of December 2015. Despite the fast rising traffic not much is translating into sales. The report found that only 13 per cent of users in urban India are opting for online shopping. In rural India, just 1 per cent are shopping online.

“Having to download an app for shopping is not acceptable to many transactional users. Transactional and/or first time users contribute to a large portion of e-commerce market in India. While it is relatively easy to have a mobile app, it requires deliberate and comprehensive strategy and an execution model to build and sustain a mobile app-only ecosystem. No company can deliver extraordinary customer experience without having a mobile app in today’s world. However, ‘forcing’ users to stick to a channel might not work in favour of companies,” said Vellody.

Experts still feel that apps are the best way to deliver a personalised shopping experience to the user. With a tailored approach, firms are more likely to put a lock on customers and build a long-term user base. Moreover, maintaining an app is likely to be cheaper than a full-fledged website. “The biggest advantage of moving to app-only model is to be able to do targeted marketing without worrying about competition. The apps are great when it comes to sending personalised notifications and keeping customers engaged,” an analyst tracking the sector said.

However, users in India are used to comparing products across various outlets and then arriving at a buying decision. The small screen size of smartphones is another hurdle. The bigger screen size of laptops and desktops are seen as better alternative to compare products. Keeping multiple tabs open for comparison is another convenience that the mobile doesn’t allow. “Our data shows that there are still many customers who use desktops to shop online. We do not want to force our customers to use one specific medium to shop,” Anand Chandrasekaran, chief product officer at Snapdeal.

Instead of an app-only approach, a website that functions smoothly across all devices is something all e-commerce players must focus on. “Desktop browsers collect a lot of information about customers, having presence only on mobile apps limits browsers from collecting and sharing such data points,” said Vellody.

Google is another factor that the app-only model doesn’t take into account. A lot of shopping decisions are made via Google. People are so used to looking up products on the search engine that the success of any e-commerce firm depends a lot on how prominently they are reflected on a Google search. “A big disadvantage of having just an app is that you lose out on the huge traffic from Google,” said a person associated with a major e-commerce firm.

Unlike food ordering apps or e-hailing apps, e-commerce is not a service that people use on a daily basis. As a result, these are more prone to uninstalls. It makes more sense for an e-commerce firm to keep all channels open for a customer to make contact. “Today all our development and innovation is app first, and it will continue to be our flagship experience. However, as a customer-obsessed company we will enable our customers to shop anytime, anywhere and anyway they want including the app, mobile and a desktop site,” an Amazon India spokesperson said.

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