5 Reasons Why Going App-Only Could Be Disastrous For Flipkart

10/07/2015 8:38 AM IST | Updated 15/07/2016 8:25 AM IST
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Flipkart's application is displayed on an Apple Inc. iPhone 5c in an arranged photograph in Hong Kong, China, on Wednesday, May 21, 2014. Flipkart, India's largest online retailer, will buy competitor, according to people with knowledge of the talks, to gain a business with higher margins and strengthen its position in the local market against Inc. Photographer: Brent Lewin/Bloomberg via Getty Images

Putting an end to debates about the future of its desktop site, Flipkart has decided to go app-only by this September. This is by far the most ambitious call made by the company, even bigger than introducing and making Cash on Delivery (COD) work in India way back in 2010. COD revolutionised online shopping in the country and put Flipkart at the driver's seat in the e-commerce boom.

The decision to go app-only seems to have stemmed from a number of factors - Myntra running fairly well on its app platform, the speculation that m-commerce will take over e-commerce, more customer information resulting in personalised services, ease in pushing notifications to the customers, saving costs for running a desktop website.

However, a number of variables suggest that keeping the desktop site live is absolutely necessary for Flipkart to stay in the competition in the long run.

1. The desktop site is easier to browse

Shopping on the desktop site enables one to scan in one view a number of product images, descriptions, ratings and reviews. In addition, opening different products in multiple tabs gives one a wide arena of choices. The ease of search incentivises a customer to venture further and look for new products and maybe buy a few. A mobile app view can only accommodate either one or two items at a particular time. With such a space crunch, it requires a lot more effort to search and compare multiple products.

"Losing almost one-third of customers is a big gamble. It seems unwise when the days of app-only shopping are early and the competition is tough."

2. Phones don't have endless space

Going app-only assumes that customers will install the Flipkart app and use it frequently. But for a general consumer, shopping is not a daily activity. Social networking and messaging apps constitute a major chunk of a smart phone's memory. Considering the fact that low-end smartphones have less memory, customers are fairly likely to simply do their shopping from the mobile site of an Amazon or Snapdeal instead of downloading an app. Kunal Shah, CEO of FreeCharge, sees low memory and less need as one of the reasons for the high uninstall rates for the mobile apps of e-commerce companies.

3. Mobile internet infrastructure isn't good enough

Mobile internet infrastructure is simply not fast enough to enjoy browsing. 2G/3G internet packs are relatively costly compared to their broadband counterparts. Again, the first preference of a customer using internet packs would be for social networking and messaging. Unless the mobile is supported by wi-fi from a broadband connection, it would be foolish to expect a customer to spend a good chunk of his data pack for browsing through the mobile apps of shopping sites.

4. The competition is active on multiple platforms

Most market competitors will continue to keep their desktop and mobile websites live. This will enable the entire traffic of about 30% customers who shop on desktop sites to switch their loyalty away from Flipkart. Losing almost one-third of customers is a big gamble. It seems unwise when the days of app-only shopping are early and the competition is tough.

5. Flipkart's brand equity is on shaky ground

It hasn't been smooth sailing for Flipkart over the past few months. Starting from the big billion day sale fiasco to CEO Sachin Bansal's much-criticised initial support for Airtel zero to bashing on social media due to a number of price errors, the perception of Flipkart as the undoubted leader of the Indian e-commerce market has definitely suffered a beating. Going app-only will only attract more detractors for Flipkart.

All in all, the decision seems ill-timed. Whether it is a new beginning or the beginning of the end for Flipkart, we'll have to wait and watch.

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