mCommerce: Why India’s Future is in the Palm of Its Hand

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In the first article of this mini-series mCommerce: Transforming Business As Usual For India’s BoP, we set out to explore the, “ideal conditions necessary for mCommerce to transform how an entire country does business” while demonstrating “these conditions now exist in India.” India has a young tech-savvy generation of mobile-first internet users constrained by small local offline markets with limited competition and inconsistent quality.  Meanwhile, India’s BoP small businesses and service providers lack the market access and technical expertise necessary to compete and are being left behind.  mCommerce businesses are uniquely positioned and equipped to bridge this gap.  This second article mCommerce: Why India’s Future is in the Palm of Its Hand picks up from here, jumping directly into the specifics to demonstrate how mCommerce platforms are being created and used to fill the void between the demand of India’s young tech-savvy consumers and the supply of India’s BoP small businesses and service providers.

Backlot Bollywood sets at Film City, Mumbai, India

Filling the Void

mCommerce platforms provide businesses the support and expertise necessary to leverage their unique attributes (size, flexibility, location) to create differentiated, high-quality services. shutterstock_1106785702By enabling this level of customization at the micro level, at the macro level, they provide consumers with levels of choice that normal businesses cannot. Knowing the importance of customer experience, mobile web pages and Apps are intentionally designed to be simple, intuitive, and easy to use. To compliment ease of use, they are designed to utilize customer feedback to weed out bad services.  This allows mCommerce ventures to provide customers with direct access to a large market of quality services and an easy way to seek, find and choose from a those services. While this sounds good in theory, it’s even better in practice.

Addictive services and repeat customers

The more convenient an experience, the more likely consumers will incorporate the services into their everyday lives.  Understanding this, mCommerce ventures are focusing to create simple, intuitive user interfaces and streamlined experiences. A great example of this is seen in one online recharge space within one of India’s largest mCommerce players, PayTm. PayTm offers an entire marketplace of recharge and payment options to 12M registered users who complete over 7M orders per month.

PayTM Mobile Demo

In this article on painless online charging, one analyst commented on the importance of design to their success when he explained, “What separates Paytm from the crowd” of other online charging and payment options “is its utterly simple user interface and its commitment to design that inspires a sense of confidence.”  Beyond a slick interface and a clean design, the Paytm system is designed for remarkably intuitive and simple user experience.  When a customer starts entering their mobile number, PayTm’s system automatically recognizes the consumer’s carrier and is able to automatically populate information during the rest of the interaction (the image above showcases the simplicity around 3 easy steps for mobile payments).  With this attention to detail, it is not surprising to learn they are publicly pursuing lofty goal of becoming the first mCommerce or eCommerce venture to process 1 million orders in a day by 2016.

Beyond making the experience more enjoyable, an intentionally designed user experience is especially important within the context of repeat businesses and customer shopping patterns.  In the food delivery space for example, Rohit Chadda, co-founder of FoodPanda points out that customers, “ordering from the app are more likely to be repeat customers and are also much more likely to place a bigger order” than their eCommerce customers.

Disrupting markets with new levels of convenience

In addition to an optimized experience, mComm platforms are providing the operational support and logistics necessary to create innovative services with new levels of convenience and quality.  The US startup YourMechanic provides a great illustration of an mCommerce player disrupting a current market to provide consumers and service providers with new benefits.  Known as the ‘Uber’ of car maintenance, YourMechanic is an auto repair marketplace that enables licensed mechanics to fix user’s cars at their home or office.  Today mechanics only receive about $20 an hour and are only paid while they are on the clock; meanwhile the majority of consumer payment goes straight to shop owners.

55462528592ab1e6c2adde377495cfdb-original-1YourMechanic cuts out shop owners, redistributing margins in the forms of savings to customers and added income for mechanics. By creating a market and taking care of the logistics, YourMechanic takes care of the calendar and appointment on their App, before securing the necessary parts for repair from distributors which are drop-shipped.  The result:

  • Customers enjoy a new level of convenience, a guarantee of quality and savings between 30-50%
  • Mechanics earn $75 an hour, three times as much, and a new way of augmenting their income
  • YourMechanic earns 10-15% off the drop-shipped parts and 10% of the mechanics fee.

Why is this type of model significant for India’s BoP? In this example, an mComm is innovating to disrupt the current low-wage cycle in place through the development of a new marketplace, service and platform which enables individual service providers to earn a significantly better income. They accomplish this by replacing the:

  • Need for a physical brick-and-mortar shop (and rent)
  • Marketing costs associated with bringing in customers
  • Cost of admin support to handle a calendar and logistics
  • Capital necessary to have parts on hand (and the space for storage)

In a country where 93% of jobs are informal and 84% of businesses are part of the unorganized sector—unincorporated enterprises employing less than 10 individuals engaged in services or manufacturing—these types of disruptions have the potential to impact millions.

Bringing order and quality to the chaos of urban commuting

Another example of an mCommerce player enabling service providers to create convenient and quality services can be seen in the transportation space. Indian commuters seeking transportation struggle to find rides when they need them, often facing inconsistency when drivers refuse fares, run the meters, or are rude in general.  To address this market opportunity, mCommerce players are stepping in to enable service providers so they can offer convenient and quality services.  A few recent entrants into this space offering Uber-like services in India are AutoRaja, Taxi For Sure, and mGaadi.

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The Bangalore auto rickshaw mGaadi provides consumers a quick and easy way to find a quality rickshaw at a standard price.  Through their mobile android App, consumers are able to (pre) order rides, pay for services and rate their individual driver and experience.  Rating the user experience is significant, through tying the quality of a ride to an individual experience and driver, mGaadi is functionally able to crowd-source quality control.  This allows good drivers the opportunity to earn more fairs and a better living while those with poor ratings are removed. In addition to ensuring a higher standard of quality, the mGaadi platform provides the technical expertise and operational support necessary to coordinate mGaadi’s drivers. Thanks to a high standard of quality, increased traffic and a small premium, mGaadi drivers are able to earn a higher income.  While YourMechanic and mGaadi are enabling individual service providers, mCommerce ventures are also developing platforms with the built-in support necessary to help small businesses succeed.

Equipping the little guy to compete

In India there are over 1.5 crore (15 million) Kiranas and small stores being left behind because they lack the operational expertise necessary to compete with larger and more sophisticated businesses (see what global heavyweights entering India are up to in Walmart Planning E-Commerce Marketplace to Enter India, Challenges eBay, Amazon by TechCrunch). Jiffstore provides a mobile App that allows buyers to order household provisions from Kirana stores with home delivery.

Jiff

Through a simple mobile interface, consumers are able to browse thousands of items on their mobile before placing an order and having items delivered.  While small shops lack the technological and operational expertise necessary to support this type of service, Jiffstore provides kiranas an easy way to manage their inventory, interact with their customers and to automate their business.  Through their services, Jiffstore is providing the market with a new type of service and giving kiranas a new way to leverage size and location to engage their customers and to increase their income.

Going beyond services to create new ecosystems

While Jiffstore is making a new type of service possible, foodmCommerce ventures are taking this to the next level in other sectors and creating new ecosystems of complimentary services. In the food sector for instance, Zomato is a portal for restaurant listings and reviews.  While successful in 11 countries and aiming for 22 in the next two years, Zomato has kept their services limited, meaning once customers have read the menu and seen the reviews, they still have to call in, order and pickup the food themselves. Enter the food ordering and delivery space with ‘food distribution’ companies like Foodpanda, JustDial, JustEat and TastyKhana.  In 2012, India’s delivery market was Rs 1,000 crore and expected to grow up to 6,000 crore by 2017; 10-12% of which is online ordering.  This is significant when players like JustEat report their number of users are doubling year over year.

Putting the Future of Commerce in the Hands of the Consumer

mCommerce in India has a unique opportunity to transform how a significant portion of India’s BoP does business. The makeup of India’s young tech-savvy population, the growth of mobile-first internet penetration, and the carry-it-anywhere, everywhere convenience of increasingly affordable mobile phones have created market demand for simple and convenient mCommerce services. mCommerce players understand this and are leveraging their expertise to put a new generation of high quality opportunities into the hands of the consumer. Technology alone however will not bridge the gap between the growing demands of consumers and the supply of BoP service providers which is lagging  behind.  By delivering platforms, resources, and access to technological expertise, mCommerce ventures are disrupting established business verticals and putting the opportunity to compete into the hands of India’s BoP. In doing so, they are creating dynamic new services and marketplaces with the potential to transform the livelihoods of millions.

Additional Livelihood Research

This is the final article of a ten part series focused on India’s Livelihood.  For a sector overview and introduction to the entire series visit No Handouts Required: A Hand Up to a Better Livelihood where the challenges associated with India’s need to train 500M and to create an additional 350M jobs by 2022 are explored.  For insight into the companies and trends within the space, visit 75 Companies Transforming India’s Livelihoods.

Visit the Mobile Commerce Sector Page for additional news and new research

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