Mobile E-commerce: How Smartphones Influence The Way We Shop

Its tough to imagine how a smartphone has increased our dependency for
our day to day activities. Ordering food & groceries, clothing etc
that needed one to take out time to go outdoor, select and buy, can be
done from anywhere now.

One of the areas, where mobile has made a massive difference is in
shopping on the mobile. It’s as easy as opening up an app downloaded
on the phone, looking for what you want to buy, read the reviews,
check the credibility of the sellers, and get the product delivered to
your doorsteps. All this with the ease of your fingertips. If the
product is not to your liking, you can get a refund within 3 to 4
days. Online brands in India like Amazon, Flipkart, Snapdeal, Myntra,
Jabong and now Paytm use the internet as the potent tool to further
their business. There are other segments too where shopping has been
made easier through mobile apps like ordering ready meal on Swiggy and
Foodpanda. Big Basket and Nukkad have created a space for themselves
in easing out shopping for groceries. These products can be delivered
to your doorstep anytime you choose to slot the delivery. There are
other apps like Pepperfry and Urban Ladder, through which one can buy
furniture. Furthermore, it is impossible to think of moving around in
the world without the convenience of taxi services of Uber and Ola &
their added services like Ola Cafe (now closed).

According to research, app usage has a dramatic effect on the
purchases that are made from that app. The convenience of payment and
the modes of payment adds to the ease factor of using the app. With a
valid mobile number, One Time Password can be used to verify any
purchases thus eliminating security concerns. Having access to emails
and social media information on discount and special offers has also
eased purchasing over the mobile phone.

It can be argued that while there is no face to face interaction to
discuss product credibility, shopping through app has made the public
more aware of their surroundings and competition in every segment
ensures that one cannot be cheated with inflated prices and bad
quality of the product. This also means that the target audience of
these apps still remain the literate part of the population especially
the younger generation, who remain more dynamic in using new
technology and using it to their convenience as compared to their
skeptical older counterparts.

US alone has doubled the advertising for mobile apps. New graduates
and companies are working on new apps that can facilitate the lives of
the people. With automation and robotics, machines will be entering
our life in each segment with mobile staying as a focus tool to remote
control our surroundings.

Future of e-commerce optimistically remains mobile and investing time
in learning the nuance seems to be the order of the day.

Demon of Demonetisation & Digital Evolution

Demon of Demonetisation has struck many in the past one week, especially those who played dubious games with the system. In order to set these people right, billions of commoners have also been affected. Here is a snapshot of the impact

Impact on Loans & Deposits

Interest rates on deposits have started to fall as the total deposits in banking system reached 100 lakh crores as of 17th Nov 2016. This is also a good news for those, who want to take loans as the interest rates on loan will see a downward trend very soon.

Impact on E-commerce

Cash on delivery (COD) is an option given by websites like Flipkart, Amazon, Snapdeal, ShopClues and Paytm etc while placing an order for a product. Close to 60% of all e-commerce orders are paid through cash on delivery, according to stats. Due to shortage of cash, deliveries that are being made to customers are being turned down and even cancelled. COD helps in easing the cash flow as it ensures a steady income for logistics companies, who charge for their services.

To counter this, the e-commerce companies are incentivizing customers to make pre paid orders. Other alternative that these companies are encouraging customers to use is payment gateways to pay for their orders like Ekart for Flipkart and ATS for Amazon India. This is apart from conventional payment options like using debit card, credit card and net banking

Impact on Branded Salons & Wellness Providers

Some branded salons are incentivizing customers for premium services by paying half for it. They are also accepting notes of Rs 500 and Rs 1,000. Jawed Habib’s and Head Turners are accepting cash deposit of Rs 25000 for membership while giving services worth Rs 50000 to ensure a steady demand for their services. Meanwhile there has been 20% increase in demand for services like hair smoothening, straightening and highlighting, as reported. Some salons hare also accepting notes of Rs 500 and Rs 1,000 if customer is buying their products.

Impact on Multiplexes & Small Screen Theaters

Demonetisation also made entertainment inaccessible for a few days. Multiplexes sell 40-60% of their tickets online or by card. To incentivize customers to book online or on mobile app, PVR has waived off the convenience fee for total of 4 weeks. 35% discount has been given on Food & Beverage combos & 20% off on first transaction on mobile app.

Meanwhile small screen owners in tier III & tier IV cities are facing brunt of cash crunch as they are not associated with any online payment gateway partner. They faced less than 10% of the occupancy in the first two days of demonetisation announcement. Very soon they will have to acquire the infrastructure to accept cards or sell tickets online for smooth running of their business.

Impact on Kiranawala/ Paanwala

Kiranawala and paanwalas are looking for digital solutions in times of cash crunch. These merchants have been frantically placing requests to get an installation made for new POS (Point of sale) terminals. According to Lokhvir Kapoor, CEO of pine labs, who manufactures these terminals, thousand requests have already been made for the installation of new terminus. According to Manish Patel, founder of mSwipe, there has been a rise in demand for mobile POS terminals, which can be attached to mobile phones and used to swipe cards.

Impact on Construction Workers Domestic Helpers

The Modi government claims that the Jan Dhan Yojana that they started out in 2014 covers 99% households. Banks have opened 25.45 crore accounts under the scheme that provides banking facility to all.

Domestic helpers and workers, who are usually at the lower wrung of the society, are mostly poorly paid and have to exert for physical labour often for long hours. Demonetisation brings bad news to these workers if they have been ignorant about their rights.

Impact on Real Estate & Stock Prices

Black money has been the prevailing norm in the real estate sector. Demonetisation could mean stalling of few projects leading also to cancellation of few projects. This could have an impact on demand for cement, building material & paints, thereby also affecting their stock prices.

Impact on Demand for Gold

Gold prices went down post the announcement of demonetization. The gold prices have fallen 1% and are likely to fall further 3% by next month. Gold imports are likely to drop 35% in the next few months. Buying will be slow till march as consumers will wait for the price of gold to go down further.

Impact on Truckers/ Farmers & Laborers

Traders are unable to make payments, due to which vegetable market are suffering. The supply chain was brought to a halt. A trader from Ghazipur mandi said that onion supply was stopped from the state. In Gujarat, cotton and groundnut mandis were closed. The demand has fallen due to lower purchasing power.

Meanwhile amidst all the confusion, Modi has requested its citizens to side by him till Dec 30th in his fight against black money and terrorism.

Impact on Tourism

International tourists, students, medical tourists, delegates and diplomats have been affected. Embassies are suggesting for a separate counter at banks to facilitate their needs for Indian currency also since locals are being preferred in banks to be helped first. Tourists are finding themselves to be stranded in far flung areas with banned notes. Medical tourists from Iran and Sudan cannot make payments from credit card due to sanctions. Meanwhile embassies have cancelled visits by delegates to India while this problem of cash crunch gets solved.

Ola! you got credit to pay later. Paytm me, Uber

Ola, a point to point taxi service has created an option for frequent users and corporate clients to repay through Ola Money e-wallet – payment option in the app even after 1 week. Meanwhile Ola’s contemporary Uber allows payment through paytm payment gateway.

Digital Solutions

Discontinuing Rs 500 & Rs 1000 note on Nov 8th 2016 by Prime Minister Narendra Modi has led many to look for digital solutions for payments. The beneficiaries include payment gateways like Paytm, MobiKwik, Payzapp, Freecharge that are being looked into as a desperate measure in desperate times.

Demonetisation Hacks

Here are a few hacks to counter the affect of demonetisation.

• Every individual has 2.5 lakh tax free income that can be put in banks. Homemakers are most to benefit.
• Gifts from Relatives can be tax free upto a certain limit
• Weddings/ Ceremonies: Cash received in ceremonies and weddings are tax exempt to a believable limit.
• Loans to staff/ Vendors: To save money in another’s bank account, they could be given a loan with a commission.

 

“In the short term consumers will be constricted by the unavailability of cash and that will trickle down through the consumer network and that will have some impact on their performance. Whether it is for months or for quarters is hard to say. A lot will depend on how the financial institutions and the government continue to respond through this constraint. But without any doubt, they will see impact on their results.”

Jack Ringquist, global leader for consumer products at Deloitte

Make in India & Sell Online?

Made in India – Madhubani art works, Banarsi & Kota sarees, Darjeeling tea sold on e-comm websites like Amazon, Snapdeal, Flipkart and ebay might become a reality.

The country has a huge gap between its artisans and their buyers. Lapses in distribution & marketing leaves this talent pool high and dry, benefitting only the middle men.

According to me, there should be a government led separate e-comm portal that manages ‘Made in India’ products. Else the same products could have varying degree of pricing in different portals, due to reasons like discount offers by particular website, time of being bought, differing rates of procurement from artists, etc.

India is a country, where shopkeepers will negotiate even for Rs 10 for a product and end up getting a better value than what an e-comm portal could fetch them. Tie ups with established websites would have to be strategically done – by eliminating middle men, making artisans net – savvy, else establishing a net servicing support system for such artisans around the country.

These items are currently available in state emporios.