Mobile phone usage penetration worldwide is approaching up to 70%. Initially voice communication has gone mobile in a massive way. The first generation(1G) of wireless telecommunication technology supports only voice calls. The second generation(2G) of wireless telecommunication technology supports SMS services in addition to voice calls. The third generation (3G) of mobile telecommunication technology supports mobile internet access, video calls and mobile TV. Fourth Generation (4G LTE) is already meeting the requirements of next generation mobile requirements. It enables operators to offer high-performance, mass-market mobile broadband services, through a combination of high bit-rates and system throughput during upload and download of data. The development in the mobile service providers is so rapid that it meets the requirements and demands of the current high end smartphones.
Smartphones started emerging since 1999. It was the Japanese firm NTT DoCoMo released the first smartphones, which provided data transmission speeds up to 9.6 kbit/s. In 2007, Apple Inc. introduced the iPhone, one of the first smartphones to use a multi-touch interface. The iPhone was notable for its use of a large touchscreen for direct finger input as its main means of interaction, instead of a stylus, keyboard, or keypad typical for smartphones at the time. 2008 saw the release of the first phone to use Android. Android is an open-source platform owned by Google. In early 2014, smartphones started to use Quad HD (2K) 2560×1440 on 5.5″ screens with up to 534 ppi (pixel per inch) on devices. Quad HD is used in advanced televisions and computer monitors, but with 110 ppi or less on such larger displays. As of 2014, Wi-Fi networks were much used for smartphones. Wi-Fi becomes more prevalent and easier to connect to smartphones. Smartphones are increasingly integrated with everyday usages. For instance, credit cards and mobile payments are integrated into smartphones where users can send cash payments through smartphone applications. Apple Pay has picked up 34 new banks for supporting their mobile payment platform, where merchants are rapidly adopting it. Now a days, with all of the great technology available, high end smartphones are manufactured with high end configurations like Octa-Core Processor with 1.5 GHz or more speed, 5.5 Inch or more display with 4G and Wi-Fi features (and many other features) when compared to 15 years old early Japanese smartphones. The Smartphone market is now bigger than the PC market. Global smartphone sales are set to grow by 18% by the end of 2015.
The usage of smartphones have started to increase on daily basis world wide. Nearly 73% of the population of the United Arab Emirates (UAE) will use a smartphone in the next few years, as per eMarketer estimates shown in the below picture. This puts the UAE in the No.1 position for smartphone user penetration among countries in the Middle East and Africa (MEA).
Now, the idea of App-Only (Mobile Application) business has made the major ecommerce enterprise giants to shut down their portals. Few others enterprises have future plans to close their portals and use only mobile App (Application) . They have decided to continue their business only through mobile App using a smartphone for their sales and other transactions. However this decision is a surprise to many of the existing and new customers of the enterprises. In fact this is a surprise to non-users of these enterprises portals. As per the Mary Meeker’s 2015 report on Internet Trends, the overall e-commerce portals are getting close to 70 per cent of their traffic from mobile App. May be these sort of reports might have triggered the idea of App-Only business to these ecommerce enterprise giants.
These ecommerce enterprises claim that close to 95% of their internet traffic and over 70% of sales comes through mobile devices. They also claim that their products purchases have gone up by 40% using mobile App after shut down of the portals. This information could be true to some extent as they have given special discounts on purchases made through the App. This decision could save money to the enterprise in terms of maintenance of the portals. However this decision seems to have more disadvantages than advantages to the enterprise giant, as it may lead to loss of customers and eventually it may lead to revenue loss over the long run. Let us see how this decision is going to lead to the customers loss and eventually revenue loss over the long run.
The portals and their equivalent mobile apps offers and serves different benefits to different customers. From customers perspective, the desktop version of the website(portal) is hundred times more convenient to use. Customers can compare products, prices with other competitor vendors at extremely quickly by opening them in new tabs of the internet browser. Now using a mobile app, we can imagine how difficult it is to compare prices of same products from 2 different vendors on App; it will definitely be a tedious job. So customers will start to purchase products from alternative vendors.
Many regular and loyal customers of the these giant enterprises are disappointed with the closer of the portals. Most of customers always prefer to see the product on a bigger screen before buying it, as it is more convenient to use and less eye straining. The zoom functionality is very good on desktop websites(portals) compared with App. Even though, many customers might have placed their orders via the App, they still would have checked out the portals prior to placing the order. On smartphone there is also much of colour difference of the product from device to device (Samsung Vs. iPhone) based on the brand of the smartphone. Even the clothes textures are not so clear in mobile. Mobile is never a right device to buy the dresses since the display size of mobile will always be a limitation. The guess is that these companies do not want customers to compare the products and prices but blindly purchase the products through the App. So, direct purchases on the App will create tons of returned purchased goods. So, this decision is a short-term gain and a long-term loss of customers to the enterprise. An Economic Times report also said that these ecommerce giants saw a 10% decrease in sales after May 2015’s App-only business.
Mobile App’s bandwidth is limited in terms of opening multiple tabs. Products’ return/exchange/cancel is more easy on desktop website(portal) compared to App. An app is certainly a great addition to an online shopping experience but should no way completely replace a successful online practice.
According to Similarweb (Web Analysis tool), these ecommerce giant is currently enjoying 21.8 Million users in which 23.48% are visitors. Among these visitors 90.98% traffic is through organic search. And in that traffic, the Bounce rate is 41.87%. Below chart clearly shows a high impact on the traffic since they opted for “App only mode” i.e. they have lost 45.5% of the traffic (from both Desktop and Mobile channels) since Jan 2015 (40.1 Million). If they are losing traffic, it is for sure they are indirectly loosing Conversions. May be the impact is not instant but gradually it may show its signs.
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