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World-first: E-tailer shuts website, goes app-only

NEW DELHI — Indian online fashion group Myntra has been a pioneer in selling apparel and accessories to young, tech-savvy consumers over the Internet, as part of India’s e-commerce revolution. Now the online retailer, bought last year by Flipkart, is pushing into another frontier by closing down its website.

NEW DELHI — Indian online fashion group Myntra has been a pioneer in selling apparel and accessories to young, tech-savvy consumers over the Internet, as part of India’s e-commerce revolution. Now the online retailer, bought last year by Flipkart, is pushing into another frontier by closing down its website.

Yesterday, Myntra shuttered its website and went mobile app only — a world-first — meaning that shoppers will no longer be able to make purchases from a desktop or laptop computer, but only through smartphones.

Myntra said the decision reflects the changes of Internet usage in India, where smartphone ownership is increasing, while penetration of broadband Internet and traditional computers is low.

Myntra, which sells apparel from international brands such as Benetton as well as its own in-house brands, is confident other Indian e-commerce companies will follow suit.

“We are betting on the future,” said Mr Prasad Kompalli, Myntra’s head of e-commerce platforms. “We are fully committed to this eventuality, that will happen to the entire industry.”

The Internet and Mobile Association of India estimates that Indians spend US$16 billion (S$21.1 billion) buying goods and services over the Internet each year. UBS, the investment bank, said Indian online purchases of merchandise could be worth US$50 billion a year by 2020.

While there are no reliable statistics for the percentage of Indian transactions made via smartphones, surging use of the devices is seen as a crucial driver for the industry.

India has roughly 120 million smartphone users, which analysts at UBS expect to more than double over the next three years, aided by the proliferation of inexpensive handsets from the likes of Micromax and China’s Xiaomi.

By contrast, there are only 18 million broadband connections in India, accounting for a fraction of total Internet access.

But many e-commerce and retail industry analysts see Myntra’s decision as risky, at a time when India’s e-commerce industry — and consumers’ habits of online shopping — is nascent.

They warn that some of Myntra’s existing and potential customers unfamiliar with the use of apps instead opt for competitors such as Jabong, which is backed by Rocket Internet, the German start-up conglomerate, and Sweden’s AB Kinnevik. Jabong said it has no plans to replicate Myntra’s strategy.

“It is important to be flexible and give customers a choice,” said Mr Debashish Mukherjee, a retail industry analyst at AT Kearney. “There is not enough evidence to say that one platform versus another is a choice that needs to be made right now.”

Myntra, which shut down the smartphone version of its website six weeks ago, said 70 per cent of its total revenues come from mobiles. About nine million users have downloaded its app, and the company said it hopes to increase that by five million over the next three to four months.

However, Mr Mukherjee said some customers place orders on their mobiles after browsing on a traditional computer, as mobile Internet connections are relatively slow in India.

“As India is still a fledgling market, giving the consumers the option to discover your site through a search engine is still a noble objective,” he said.

Mr Diptam Sarkar, a Bangalore-based digital marketing expert, said shutting down the site would help Myntra free up resources previously spent on digital marketing for more traditional forms of advertising such as television commercials.

Mr Shaleen Kumar, an analyst who has studied Indian e-commerce for UBS, believes the app-only strategy is an experiment by Myntra’s parent Flipkart to test Indian consumers’ readiness to migrate away from browser-based shopping.

The lessons learnt could be useful to Flipkart, an online retailer that sells everything from books to appliances, as it fights local rival Snapdeal and United States-based Amazon for dominance in India’s fast-growing e-commerce market.

Flipkart has indicated that it may follow Myntra and go app-only within a year.

“It’s a Flipkart experiment on Myntra,” Mr Kumar said. “There is not much to lose. It’s the natural course of evolution, but the only thing is timing — whether you are timing it correctly, or whether it’s too early to be app-only.” THE FINANCIAL TIMES

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