Goodbye e-commerce, hello m-commerce? 50% of Snapdeal's sales come via mobile; Flipkart tries to catch up

With online shopping expected to go mainstream in the next few years, India’s e-commerce business jumped by a whopping 88 percent in 2013 to reach $16 billion , according to ASSOCHAM. Interestingly, mobile devices are seen as key growth drivers and are emerging as the biggest platform for sales for online retailers not just globally but also in India. India’s leading online marketplace Snapdeal.com is one happy company which recently witnessed a huge revenue share coming in via mobile platform.

Snapdeal has announced that 50 percent of its sales now come via mobile devices. The company said it has seen an exponential 25x growth in mobile based transactions compared to a year ago, when mobile devices accounted for just 5 percent of its total orders.
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In a statement, the company said that 45 percent of the transactions seen on mobile now come through the native applications while the remaining 55 percent come through the mobile site. Also, the average ticket size of orders place through the mobile apps is higher than those placed through the mobile site. Snapdeal also revealed that 20 percent of all app users open it every day.

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Android, with over 80 percent of the total mobile transactions, emerged as the more popular operating platform for Snapdeal sales, followed by iOS with 20 percent. The increased penetration of smartphones and tablets remains the key factor driving this growth.

Snapdeal is expected to cross the milestone of $1 billion in revenues this year, 12 months ahead of schedule. In 2012, CEO Kunal Bahl had predicted sales to touch the $1 billion mark in 2015, but if the company achieves this magical number this year itself it would become the most capital efficient company.

Founded by Kunal Bahl and Rohit Bansal in 2010, Snapdeal.com offers over 500 product categories from more than 30,000 sellers across the country. It claims to have over 20 million members and shipping to 4,000+ towns and cities in India. Snapdeal is backed by investors such as eBay, Intel Capital, Bessemer Venture Partners, Nexus Venture Partners and IndoUS Venture Partners.

On the other hand, the country’s largest e-commerce firm and also the biggest rival of Snapdeal, Flipkart is also leaving no stone unturned to harness the power of mobile with an aim to achieve half of its total sales from mobile by the end of this year. Currently, mobile-based transactions account for only 20 percent of Flipkart’s total sales.

Focussing heavily on the mobile platform, the online retailer is trying to get its customers shop through mobiles and to make that happen the company is even providing Rs.150 discount for users who shop through Flipkart Mobile App and free shipping. Flipkart has hit $1 billion in sales, a year ahead of schedule.

Myntra’s mobile sales were responsible for 80 percent of its growth in the first quarter of this year and the shopping site expects mobile to contribute 40 percent of its total sales by this year end. While, e-retailing firm HomeShop18 pegs mobile commerce to contribute more than 25 percent of the total traffic in e-commerce (online shopping) by 2015.
Mobile commerce: India already high on mobile usage

Last year, an SAP survey indicated an impressive traction of mobile commerce in the country saying that 80 percent of the population makes parallel usage of the mobile phones other than just calls and text messages.

The surging popularity of mobile commerce in the country also highlights the increase in the internet penetration with 63 percent of consumers accessing the internet on their mobile at least once a day. 65 percent of the users feel mobile is a convenient mode of transaction leading to a greater consumer adoption in this segment.

“India scores high in using mobile for banking transactions when compared to other countries in the world,” the survey stated.

More than half of the consumers in India indulge in maximum mobile purchases for entertainment service like cinema, theatre shows, DVDs, sport games (53 percent) followed by music downloads (48 percent). The other key purchases via mobile are clothes/footwear/other attires (47 percent) and books or e-books (40 percent).

Consumers in India are driven to buy goods using their mobile phone by exclusive offers (33 percent) and coupons (26 percent), the survey highlighted.

With so many expectations riding on mobile shopping to take over desktop shopping, companies are investing heavily on their mobile strategy in order to stay ahead of the game.