The data reveals the details of India’s ferocious e-commerce battle. Flipkart’s mobile e-commerce app engagement is greater than any of its competitors in India. Along with fashion e-tailer Myntra, acquired by Flipkart last year, the online retail giant leads the pack when it comes to Indian shopping apps and customer engagement.
The data also shows that India is at the heart of a debate that some e-commerce stores are having. The country’s consumers use shopping apps at a higher rate than the desktop and mobile Web. If its growth is fueled by mobile apps as well as Web traffic, should a company ever favor one platform over another? Does the data support such a choice?
Let’s look at the numbers.
India’s e-Commerce Landscape
India is currently the world’s hottest smartphone market. Smartphone shopping apps and mobile web transactions are where the real e-commerce growth opportunities exist, not just in India, but worldwide. As Silicon Valley VC Benedict Evans recently highlighted
“[T]his is not just about people in rich countries. Of 5bn adults on earth today, close to 4bn and growing have a mobile phone today, almost all of whom will convert to smartphones over the next few years.”
The country’s online shopping market is fiercely competitive. With billions of dollars at stake, local and foreign companies are battling for customers. That is why Amazon invested $2 billion in the company’s Indian e-commerce operation last year. One recent study estimates that by the end of 2015, India’s e-commerce sales will grow to $16 billion, 364% more than the $4.4 billion generated in 2010.
This data is a big deal because app use in India is growing quickly. A PWC study found that Indian app usage grew 131% in one year, from rate of 21% a year earlier in May 2014, to 54% in May 2015. The combination of the country’s enormous demand for smartphones, along with lower bandwidth costs for internet access in urban and rural areas is opening up e-commerce access for millions of new users.
Indian women account for the country’s increased e-commerce app usage, spending two hours each month on shopping apps, 16 minutes more than men. Smartphone users in India spend an average of nearly three hours a day on their devices.
By 2017, the country should have more consumers buying smartphones than in the U.S., second only to sales in China. Android is India’s dominant mobile OS with a 62% market share that keeps growing.
Flipkart Dominates Shopping Apps in India
Flipkart remains India’s biggest e-commerce company. Its Android shopping app engagement is head and shoulders above the competition. In the spring of 2014 the company acquired Myntra, a successful Indian fashion shopping app, to expand Flipkart’s reach to fashion-conscious consumers.
In May, Flipkart broke new ground in India’s mobile market when its Myntra unit stopped supporting desktop shopping to become an app-only e-commerce solution.
Then in August, it integrated Ping into its app to create a social shopping experience. Users can chat with friends, share photos, and even drag merchandise from Flipkart into the app to discuss with others. Expecting just 100,000 users to be interested in Ping, more than 2.5 million people downloaded the invitation-only feature in two weeks, with nearly 25% of them using it.
Flipkart’s experiment with Ping is interesting not simply due to the large number of downloads and usage, but also because the app resulted in more impulse buys. India’s e-commerce app market is clearly the place to be.
Flipkart’s is India’s E-Commerce Mobile App Leader
Together, Flipkart and its fashion-focused Myntra unit have a 60% market share of Daily Active Users (DAU) out of India’s top six Android e-commerce apps. The other sites include Snapdeal, all the Amazon Android apps available in India combined, Jabong, and ShopClues.
Snapdeal’s Android share declined from 24% in January to 19% in July. Amazon’s combined Android app share in India rose to 12% during the same period. Jabong and ShopClues had Android app market shares of less than 10% each during that time.
Flipkart Leads India’s Mobile Market Penetration
Measuring DAU is critical to understanding an app’s engagement. It’s an indication of an e-commerce company’s mobile market penetration. As the country’s demand grows for smartphones and Internet access, DAU data can show the extent of a company’s e-commerce app penetrating the mobile market on more devices.
The chart above shows that each day, almost 7.5% of India’s Android smartphone owners use either Flipkart or Myntra apps. None of Flipkart’s competitors even come close to this app traffic: Snapdeal has a DAU of 2.4%, Amazon 1.6%, Jabong 0.7%, and ShopClues just 0.4%.
India’s Desktop and Mobile Web
One of Flipkart’s biggest challenges remains competing for Amazon’s growing Indian Web traffic. While Flipkart remains India’s e-commerce desktop traffic leader, Amazon’s mobile web traffic surpassed Flipkart’s in April.
A big question for Flipkart is whether to focus on retaking that mobile web traffic segment from Amazon and preserving its desktop e-commerce lead. Does a cost-benefit analysis support Flipkart becoming an app-only platform? That remains an open question.
As India’s consumers become increasingly reliant on mobile devices, and less dependent upon desktop computers, Flipkart has taken the lead in showing the world how successful and satisfying mobile app shopping can be.