India’s M-Commerce Revolution

Man using mobile payments, holding circle global and icon customer network connection, Omni Channel
2nd July 2017

When walking around the busy streets of Bangalore it’s difficult not to notice the abundance of smartphones across all generations of the population. This popularity is perhaps due to the simplicity of one-touch access to thousands of tool including torches, calculators, and payment applications making mobiles the modern day “Swiss Army Knife” (Forbes, 2016).

Mobile popularity is causing an increase in total e-commerce growth with user penetration predicted to grow from 16.8% in 2017 to 30.4% in 2021 (Statista, 2017). India’s population seem to have skipped the demand for desktop and laptop western countries have, and have adapted to mobile incredibly quickly, with over 1 billion mobile subscribers in 2016 (Forbes, 2016).

The Booming M-Commerce Market

This uptake of mobile looks only set to rise in future years, especially with the extremely generous mobile data deals now being offered B2C. When buying a new mobile in the UK you are lucky if you get the carrier bag for free, let alone a year’s free data and calls! Micromax’s latest smartphone ‘Canvas 2’ costs Rs 11,999 (approximately £146.37) and customers receive a free Airtel 4G SIM loaded with free 4G data and calls for one year, limited to 1GB of data and 400 minutes per day (India Today, 2017). The daily data limit is double the average data allowance for a month in the UK (BBC, 2013).
Thanks to these growing data packages, government initiatives, and lacking household internet infrastructure, GSMA predicts that access to mobile internet in India will grow from 430 million in 2016 to 670 million by 2020 (GMSA, 2017). Growing internet access across India alongside rising disposable incomes is causing the m-commerce market to boom. Statista reports Indian m-commerce alone to grow from US$ 15.27 billion in 2016 to US$ 63.53 billion in 2020, a predicted growth of 400%, whilst ecommerce revenues are expected to reach just US$ 38.09 billion in 2020.
This current demand and expected growth is why the largest e-commerce players such as Myntra, Jabong, Snapdeal, Flipkart, and Amazon India are investing in a mobile-first approach, retailer’s sites must be mobile optimised for maximum user experience, reach and engagement, leading by example is marketplace giant Flipkart who hope to become the “mobile e-commerce company of the future” (Rai, 2014). The clear demand for m-commerce has caused some of India’s best businesses to be more developed in terms of mobile than that of some western businesses, something which is not often the case for an emerging economy.

India Leading the Way in Mobile Payments

In India it’s not just about online retailers however, mobile payments have taken the country by storm, thanks to the likes of Paytm and Zeta, you can pay for a 25p tuk tuk journey via a mobile app or for fresh mangoes from the local shack at the touch of a button. It’s predicted that the transactional value of mobile payments in India will achieve an annual growth rate of 138.7% from 2017 to 2021 (Statista, 2017). In 2015, Deloitte reported 47% of India’s population make an in-store mobile payment at least once a week as shown here:
Alongside the obvious advantages of security, speed and convenience, mobile payments can prove to beneficial in terms of cost for low earning migrant workers sending money back to India. Information from the GSMA suggests that international transfers complete through mobile payment methods are on average 50% cheaper than using international transfer operators (GSMA, 2016). The World Bank in 2015 reported the cost of transferring $200 internationally was 7.6% ($15.20), with mobile payments this could reduce to $7.60, giving the families of migrant workers more money to spend back home in India (GSMA, 2016).

Looking for your next e-commerce market?

For UK retailers looking to expand, India is a great option as the potential is huge for growth, but it’s important to take on the mobile-first approach, this can either be through using existing marketplace platforms or creating your own localised website. If you’re looking to test the market or want quick access to millions of already active customers, marketplaces are a great option especially since they have developed their user-friendly mobile optimised sites already, if you’d like to know more on selling in India you can speak to our team here.