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Indian e-commerce companies have taken a lead in getting their moolah from shopping on mobile phones, leaving behind China by a big margin.
Snapdeal, Flipkart, Jabong and Myntra, the leading ones in the sector here, are ahead of Chinese giant Alibaba in terms of sales transacted on mobiles. Most of the Indian companies are generating 50-60 per cent of their gross merchandise value (GMV) from mobiles, with plans to take this to 80-90 per cent over the coming months. In contrast, Alibaba gets less than 30 per cent of its GMV from transactions through mobile devices. Of the $296 billion GMV for Alibaba, about $71-billion comes from mobile sales. Alibaba accounts for 80 per cent of China's online sales, as of September 2014.
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In India, Snapdeal, which has crossed a $2-billion GMV, got 65 per cent of its business from mobiles in 2014. Its officials have said this would soon be 80 per cent. Flipkart is generating over 50 per cent from mobiles and estimates show this could swell to 90 per cent in a year or so.
Similarly, Jabong co-founder and chief executive Praveen Sinha told Business Standard recently that by the end of 2015 or early 2016, the bulk of Indians would shop on mobiles, specially via applications. "Technology is moving that way and estimates show that mobile devices would attract the biggest pie of business for most of the companies," he said.
One key reason for the stronger growth in mobile sales in India is owing to the rollout of third-generation (3G) services, coupled with handsome growth in smartphone sales. Now, 4G (fourth-generation) is being rolled out as well. With the growth and speed of broadband much slower in India than in China, e-commerce sales on mobile phones have picked up much faster in this country. China has one of the highest broadband speeds in the world and has a majority of its sales from computers and laptops.
In fact, Indian companies have seen 45-50 per cent of total GMV coming from non-metropolitan cities and tier-II & tier-III towns. "The Indian market is still evolving but mobile sales statistics have surpassed everyone's expectations, given that Indians like to shop the traditional way," said an analyst.
According to a report by Google, e-commerce was valued at about $3 billion in 2014 and could swell to $15 billion in two years.
The same report said in 2012, only 24 per cent of total shopping was from mobiles and it had doubled in the year gone by.
As for Alibaba, it is investing $575 million in Indian mobile wallet company Paytm. It appears Alibaba founder Jack Ma, too, has sensed the mobile revolution of Indian e-commerce in time.
