Back on mobile browser: Flipkart takes two steps back to take one step forward

Experts say that trying to tempt users on the app by constant sales is not only resource hungry but also counter intuitive

In April, Flipkart had announced it was going to take its mobile website off the internet. It asked users to download the app. The strategy was partly with the big sale in mind, experts said.

“The thinking was basic. Mobile penetration is increasing, more people transact on phones, so get them on the app. But customers are not that easy to figure out,” said an investment principal of a venture capitalist fund. The roll back meant, he said, that Flipkart had opened up all avenues to invite customers to spend on their platform.

“Customers like comparing marketplaces. We are a country that is still price sensitive and that is going to stay for a few years,” said Ashish Jhalani, founder, e-tailing India. He said Flipkart also learnt from Myntra, which made the “reversal” possible. Myntra was acquired by Flipkart last year. “When Myntra went app only, they lost customers. Flipkart’s analytics teams realised they can’t lose customers in their growth stage,” he added.

The company possibly made the transition too early. “The mobile website looks similar to the app, which is what will help in the gradual transition back to the app,” he said. Experts said that it is possible the company skipped a level of customer maturity.

The app-only strategy, competitors said, was urban centric, too. The mobile commerce market will grow to $19 billion, according to a Forrester report and most of this will come from tier-II towns. As of the 2011 census, there are 3,000 tier-II towns, but the way these shoppers behave is peculiar.

“Consumers in tier-II towns have low memory, low processing power in phones. It means they can’t have an app constantly asking them to update or sending them notifications. So, every time there is a sale, they install, shop and uninstall an app. There is no stickiness. They will never get a casual shopper, which means competitors can get in,” said Nitin Agarwal, senior director (marketing), Shopclues. “Getting tier-II customers is important. The metros are saturated, the growth that they are looking for will only come from the non-metros,” he added.

Shopclues calls itself the shopping destination of the tier-II and III cities. “The trend we noticed is that high-value transactions are still done on a desktop and low value on the phone. And these shoppers are price sensitive. You can’t take away the freedom of using the browser,” he said.

Experts also said trying to tempt users on the app by constant sales is not only resource hungry but also counter intuitive. Paytm saw similar trends in the space, admitting that most of the income will be generated from cities outside the urban space. The company recently split its wallet and its e-commerce and digital goods website to make the app lighter.

“The real estate on the phone’s memory is very expensive. Your app has to be super light to win. Releases are around the corner to make our app lighter,” said Saurabh Vashishtha, vice-president (business), Paytm. Paytm’s biggest revenue generator is utilities payment and for that the app is imperative to its function. “Paytm has always been a mobile-first company, browser and app are both equally important.”

Flipkart’s affiliation with Chrome to make this mobile website, which looks like an app, can also be seen as an influence of former Google employees. Coupled with the launch of 42 self pick-up stores and a strong offline strategy, Flipkart seems to be reining in the “out with the old and in with the new” mantra.