2010 was the year of Indian e-commerce. Will 2012 be the year of Indian m-commerce?
An edited version of this blog-post appeared in Business Standard.
E-commerce in India has grown steadily in the last decade. But the year 2010 marked a turning point for the industry when companies across the size spectrum found firm ground. There was a healthy addition of startups in the e-commerce space – group buying sites and deal destinations created a special segment. The VCs returned to the party with multi-million dollar investments – Tiger Global invested in Flipkart, Battery Ventures and Greylock Partners committed funds to Taggle, Canaan pumped funds in Naaptol, Sequoia backed Fashion and You, and there were more. Existing e-commerce players consolidated their positions with acquisitions and expansion plans. And a veteran company made big-bang debut on the bourses – Makemytrip saw a 90% increase in its valuation when it was listed on NASDAQ at $900 million.
The other interesting trend of 2010 was the creation of a spring board for the m-commerce takeoff. Mobile penetration reached 680 million subscribers across the country. The mobile handset market was flooded with companies like Micromax, Maxx, Karbonn, Lava offering high-feature phones at low prices. Features like qwerty keyboard, data connectivity, mobile browsers and app stores became suddenly common. Smartphones became a significant and witihin-reach category. Even Blackberry wasn’t afraid of upsetting their once exclusively black-suit audience when they came up with the BlackBerry-for-all ad campaign – ‘We are the BlackBerry boys’. iPhones and iPhone apps found a special niche for themselves. And Android phones and the potential of Android apps added to the buzz. 3G services are being rolled out in India and next year will see consumer uptake.
Many of the e-commerce companies have already started to tie their web strategy along with a phone/mobile strategy. Several portals offer a manpower-supported ‘Buy on phone’ option. While some others have invested in building a mobile interface to reach more customers – Cleartrip followed up their simple web interface with an even simpler mobile interface, and found enough traction and love to justify further investment of resources. And then there are companies like HomeShop18 and Star CJ whose primary driver has been phone sales. Naaptol and Indiatimes have figured out a model to convert traditional media response into phone sales.
Will all of the above come together and provide the nitro needed for an m-commerce takeoff in 2012?
The positive sentiment from a fast growing m-commerce space and a more robust e-commerce environment will attract even traditional businesses to focus their energies on selling through web and phone in the following years.
While e-commerce is here to stay, m-commerce is waiting to erupt as the next big thing. After all, in a country that adds more mobile subcribers in a month (15 million/month) compared to internet users in an entire year (14 million/year), businesses can’t afford to ignore the mobile space.
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