Mobiles to account for 80 per cent of e-retail by 2020: Study

Chennai: Share of e-commerce purchases made through mobile phones has gone up to 70 per cent in 2017 with data charges becoming more affordable. The share of mobile purchases is expected to touch 80 per cent by 2020, finds a study.

The higher usage of mobile phones for purchases is likely to see the launch of mobile-only formats of e-commerce companies.

Indian e-tailing consumers are getting more and more habituated with ordering through mobile phones. The share of gross merchandise value earned through mobile apps and mobile websites accounted for nearly 70 per cent in 2017, found a study by RedSeer Consulting.

The share has been consistently growing over the past few years. From 55 per cent in 2015, it had come up to 65 per cent in 2016 and then to 70 per cent in 2017. The share is likely to touch 80 per cent by 2020, the study found.

“This was powered by increasing usage of smartphones in India and falling rates of data due to the effect of players like Jio,” says Ujjawal Chaudhry, engagement manager, e-tailing, RedSeer.

“We feel this trend would continue, as new set of consumers who would be arriving in the platform would largely be from Tier 2+ cities. These customers use mobile phones primarily to place orders,” Chaudhry said.

Sensing the huge potential of mobile phones in driving e-commerce sales, some of the players had switched to mobile-only format a few years back. In 2015, Myntra had pulled out its website and turned mobile-only.

According to sources, the company had taken this decision when it was getting about 80 per cent of its traffic and 60 per cent of sales through its mobile application.

Mukesh Bansal, co-founder of Myntra, had then said that growth on the mobile platform has been rapid because fashion shopping was quite impulsive. The firm also wanted to have more loyal customers who would download the app of the company on their mobile phones.

Industry watchers find that there are a few benefits of the mobile-only strategy. This helps the company easily push notifications, the loading time is lesser compared to website, consumption of data is lesser and mobile phones provide better shopping experience and convenience.

However, Myntra was much ahead of its time. In 2015, the share of mobile phone purchasers was much lesser. Myntra returned with its website in 2016 after finding that it was losing customers.

However, the industry finds that mobile-only e-commerce platforms would probably do much better now as customers have become more comfortable transacting through apps. Also, downloading of mobile apps has grown significantly in the recent past.