Online shopping through smartphones to cross 40 million, study indicates

Following Myntra, Flipkart announced its possible move to an app-only mode. While industry experts don’t agree to an app-only strategy, the reason these ecommerce players have begun to concentrate on mobile commerce could be the exponential increase in smartphone and internet penetration in the Indian consumer market.

The latest report from ASSOCHAM, conducted with Grant Thornton, reveals some interesting numbers that point to more popularity of mobile commerce.

• Online purchases from mobile phones will increase from the current 30 million to 40 million by next year.

• Around 200 million users will join the internet user base in India and these would be led by smartphone users.

Other interesting facts about ecommerce in India are:

• Online travel still dominates ecommerce with a contribution of 71%.

• Etailing forms only 8.7% of organized retail and 0.3% of overall retail sales.

• By the end of this year, there will be 38 million users doing online transactions, compared to 11 million in 2011.

• Government initiatives will be crucial for the development of ecommerce sector:

• Digital initiative

• Modernise postal structure

Similarities between ecommerce scenario – India now & China then

• Growing internet penetration

• Acceptance of online marketplaces

• Lack of physical retail infrastructure

And we know the success China has had. So let’s choose to believe India is also on the same trajectory. Since smartphone users are on the rise, user dependability on mobile apps will increase too. Are Myntra and Flipkart going to have the last laugh? Are the equations right?