India’s Snapdeal Now Gets Over Half Its Sales Through Mobile As M-Commerce Goes Mainstream

By  Pankaj Mishra (@pankajontech)

India’s largest e-commerce marketplace, Snapdeal, now gets over half of its sales from mobile-based transactions, up from just 5% from the same platform nearly a year ago.

 

In a statement, Snapdeal said that 45% of the transactions seen on mobile now come through the native applications while the remaining 55% come through the mobile site. Also,  the average ticket size of orders place through the mobile apps is higher than those placed through the mobile site.

India’s nearly 100 million smartphone users are beginning to shop online at a pace that the country’s biggest e-commerce companies such as Flipkart and others are expecting the mobile traffic to surpass their desktop user base this year.

“Given the increasingly higher consumption of data on mobile phones, we think that the next wave of digital commerce customers will come from this medium,”  Ankit Khanna, VP, product management of Snapdeal.com said in a statement.

This milestone for Snapdeal underscores the growth of mobile commerce in India. Earlier this year, Flipkart co-founder Binny Bansal had told me in an interview that the company’s mobile users now contribute almost 40 percent of the traffic, up from just 15 percent last year.

Indeed, several mobile-only startups too are also beginning to gain from this trend. Paytm, a mobile shopping app, is chasing an audacious goal — to process 1 million orders in a day by 2016 before any of the bigger, established e-commerce rivals reach that milestone.

As we have been writing, India’s fast growing population of first time Internet users are increasingly buying on mobile. Even if we consider a 20% quarterly growth rate, the mobile Internet users in India will reach 185 million from around 155 million currently.

 

Also, most of these mobile shoppers are coming from India’s smaller towns. From around 25 million mobile Internet users in rural India as of October 2013, it’s set to become 32 million by June 2014. Currently, around 130 million of the 213 million overall Internet users are using mobile to access the web in India. By 2016, when India’s Internet user base reaches 400 million, Accel expects around 90% of them to access the web on mobile.

“Fashion and home related products are most popular amongst customers buying over mobile owing to the impulsive buying patterns for these products,” Snapdeal said in a statement announcing that it’s now officially a mobile commerce company.

This year alone, around 225 million smartphones will be sold in India, and many of them will be accessing the Internet for the first time ever. While the Indian Internet user base is around 200 million currently, only about 10 million of them are transacting online. And this is where the mobile-first Internet users offer a lucrative opportunity, not just for the existing e-commerce biggies, but also for mobile commerce startups such as Paytm.