NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, May 28, 2015

E-commerce companies in India are ignoring the PC and going straight to mobile in the country’s young, but rapidly growing online marketplace. Putting the bulk of their resources into apps means they can offer innovative marketing programs that leverage a smartphone’s ability to show a user’s location, social circles, likes and dislikes. The idea is to create highly tailored campaigns. Some of the upstarts, like Flipkart, are producing innovation at a rate that U.S. retailing behemoths, which must spend billions to serve customers across multiple channels, can only dream about.

Flipkart Internet Pvt. Ltd. is India’s largest online shopping marketplace operator, and it’s going mobile only. “We are now available only on mobile app,” says the landing page for flipkart.com. The page offers a link to download the app. PC or laptop users can still use Flipkart’s desktop site for now, but Myntra, a fashion retailer that Flipkart acquired, has gone 100 percent mobile and is now accessible exclusively on smartphones.

Why the rush to mobile? Beyond the smartphone’s unique capabilities, it’s a numbers game. There are about 250 million Internet users in India today, estimated by consultancy BCG to rise to 330 million in 2016. One in six of India’s close to a billion wireless subscribers has a smartphone today, whereas BCG estimates PC penetration at only at 5 percent in the country, which has about 1.2 billion people. Various industry estimates expect India’s smartphone ownership to rise from about 150 million today to over 500 million by 2020.