India’s biggest ecommerce company Flipkart, and its most valuable start-up, is going app-only. And where India goes, the rest of the world may follow.
Its fashion site Myntra made waves when it shut its web and mobile sites in May, forcing consumers to download an app. Then chief product officer Punit Soni told staff at a ‘town hall’ meeting last week the whole company would move to apps from September, according to Indian media.
‘India is gradually transitioning from a mobile first to a mobile only country. We have been following a mobile first approach and 70-75 per cent of our total traffic is already coming from our mobile app,’ Flipkart said in a statement reported by the FT.
In a country of more than 1.25 billion people, hundreds of millions of people are coming online for the first time. And they’re on smartphones rather than desktops. India’s online industry could expand from $11bn (£7.1bn) in 2013 to $137bn by 2020, according to Morgan Stanley. Another report, from PwC, estimated the ecommerce market will grow from $17bn in 2014 to more than $100bn in five year’s time.
Flipkart, which is reportedly raising funds at a valuation of $15bn and currently has 26 million registered users, is poised to capture much of that potential. Amazon, meanwhile, is currently spending $2bn in a bid to compete with the homegrown mega start-up, although there is no hint it will also go app-only.
Nonetheless, where Flipkart goes, others will follow. Messaging services like Whatsapp, which Facebook bought for $19bn last year, were only ever app-based. Mobile banking, much hailed in sub-Saharan Africa, is another example of an online service launching on phones.
But the pattern of consumers coming online on smartphones is being repeated across the developing world. And as more affluent consumers’ computers get put out to pasture the app-only trend could even be exported worldwide.