mCommerce: The New Marketing Trend and The New Customer Acquisition Strategy of the Big Boys of eCommerce Industry

Flipkart is giving the Google-run Great Online Shopping Festival a miss this year because the biggest Indian online retailer is promoting its own mobile app. Snapdeal is participating, but pushing its mobile app as well.

Indian e-commerce companies are changing their customer-acquisition strategy and are enticing people with offers to install their apps on mobile phones. They expect the move to create more loyal customers than those who land on the portal through online searches.

For search giant Google, this growing trend underlines the need to expand mobile offerings to retain its healthy rate of growth in a market where more people are expected to access the Internet on the mobile than on desktop.

"The ecommerce industry is now mcommerce in India; the way you reach out to customers is very different even from a year ago when other digital channels were more prominent," said Mausam Bhatt, senior director for mobile commerce & digital marketing at Flipkart. Flipkart and the local operations of US ecommerce giant Amazon get more than half their India traffic through mobile phones. And, these companies are increasingly spending on mobile-related promotions.

Bhatt declined to provide details on Flipkart's marketing expenditure. Traditionally, its spending has mostly been on search engine and display advertising, but he said there has been a large shift in spending to expand the number of customers having its mobile app installed on their phones.

"An app install is an endorsement that someone wants to shop with you," said Kishore Thota, head of digital marketing at Amazon India. While Thota still counts search and display advertising as an important part of Amazon's marketing strategy, he says from a long term point of view, "We definitely see more investment going into app presence."

This shift means Google may have to work harder for the advertising dollar. For Google, which posted more than Rs 3,000 crore in India revenue for FY14, ecommerce has contributed to the 47 per cent growth in revenue over the previous year. For many years, search engine marketing, or advertising on search queries, has been the mainstay of online businesses. The other major form of advertising online was display advertising. Google is the leader in both.

As more and more consumers move to mobile, both forms of traditional advertising have been slowing. The first by the proliferation of apps and the second by the smaller screen sizes that make it tough for display advertising. "You have to really earn the real estate on mobile," said Thota.

One-time purchases, like buying insurance or car will still be influenced by a Google search while regular actions like recharging a mobile, ordering a cab or ordering food, will see app install and more loyalty, said Naman Sarawagi, founder and chief executive of comparison shopping site FindYogi.

Google, though, has a few things going for it. "There is a shift in revenue from SEM (search engine marketing) as we know it, but with products like Google Maps and Google Now, Google still has significant stake in the future of interaction, thereby safeguarding its search and discovery based revenue," said Sarawagi.

Google's mobile revenue is already supporting its growth globally. In the US, market research firm eMarketer estimates that search revenue from desktop computers will decline to $10 billion this year from $10.8 billion in 2013. But mobile search revenue is expected to grow to $5.1 billion from $3.1 billion. According to the estimate, Google's total advertising revenue will increase 14 per cent to $43.5 billion in 2014.

"The shift to mobile is one we welcome and in Asia the change is happening faster than anywhere else in the world," said Praveen Sharma, director-performance at Google-APAC. Sharma said Google has driven hundreds of millions of app downloads through these formats.

The trend isn't limited to India or Asia. According to eMarketer, desktop search in the US will decline significantly this year, as mobile search ad spending grows.

In India, mobile advertising has steadily grown in proportion of the total digital market, to 14 per cent in the fiscal year through March 2014 from 7 per cent in fiscal 2012, according to the Internet and Mobile Association of India's latest report.

In the same period, contribution of search to total advertising revenue has gone down to 30 per cent from 34 per cent. Display advertising has also gone down in proportion as social media and video advertising have grown. The total digital market, to 14 per cent in the fiscal year through March 2014 from 7 per cent in fiscal 2012, according to the Internet and Mobile Association of India's latest report.

In the same period, contribution of search to total advertising revenue has gone down to 30 per cent from 34 per cent. Display advertising has also gone down in proportion as social media and video advertising have grown. The total digital advertising market is expected to reach Rs 3,575 crore in fiscal 2015 from Rs 2,750 crore last year.

To serve its growing mobile clientele, the search giant has also launched advertising solutions for the mobile world. This year, Google launched app promotions advertising formats across its products including search, display network and YouTube. 

Source:

http://www.exchange4media.com/58353_trendspotting-the-rise-of-e-commerce-sales-on-mobile.html

http://www.exchange4media.com/58466_gosf-partners-expecting-massive-rise-in-sales-and-visits.html

http://economictimes.indiatimes.com/industry/services/retail/online-retailers-like-flipkart-snapdeal-turn-marketing-focus-to-mobiles/articleshow/45465136.cms?curpg=2

http://www.financialexpress.com/article/industry/companies/gosf-day-1-e-tailers-discount-shoppers-penchant-for-rebates/17834/