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How Can Startups Take Advantage of the Opportunities in M-Commerce Markets?

As more and more online shoppers are taking to pressing the ‘buy’ button on the shopping apps on their phones, m-commerce entrepreneurs have much to cheer about. Currently, mobile phones present enormous opportunities to entrepreneurs in the m-commerce markets. The obvious reason for the increase in m-commerce is the continual rise in smartphone adoption rates and increased internet penetration within the country. Indian consumers are not just comfortable with m-commerce as a medium for purchasing; rather they have started preferring it over PCs and laptops. This growth within the Indian market is creating a consumer base which is ready for a new generation of mobile-based goods and services thereby providing immense opportunities to the players within this market. The market is obviously booming for m-commerce startups. Let’s take a brief look at this industry.

Growth of India’s M-Commerce Market

In 2014, 100 million Smartphone units were shipped to the country. Smart phones have already started outpacing the growth of normal feature phones and they are expected to attain the 651 million mark by 2019, growing at a massive compounded annual growth rate of 45.45% over the next five years. Today, 42% of Indian homes have access to internet in some form or the other. Looking at this opportunity, established e-commerce giants such as Amazon, Ebay, Flipkart are now switching focus to m-commerce platforms. All of these e-commerce players have launched dedicated mobile apps to retail their products.

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What will be the future like for the m-commerce industry?

For entrepreneurs eager to capitalize on the m-commerce opportunity, the first step is to understand the entire m-commerce market along with its different sectors. The m-commerce space falls into three primary categories: Mobile Enhanced, Mobile Enabled and Mobile Empowering. Mobile Enhanced includes the majority of e-commerce companies that previously existed on web but are now benefiting greatly from the transition to mobile.

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Instances of such companies include Ebay, Amazon Flipkart etc. Nevertheless, this organized market segment is somewhat saturated owing to the presence of a large number of established companies. Therefore, the entry of a new brand in this market segment should be carefully planned.

The second segment in the m-commerce domain comprise mobile enabled services that are provided by companies that are fully app based and rely on mobile and tablet platforms alone. For instance, firms such as Whatsapp, Myfitness pal etc. deliver mobile enabled services. In comparison to mobile enables enhanced services, the mobile enabled service industry spells greater opportunities for startups. This market segment is still in a nascent stage thereby allowing new entrants the opportunity to emerge as market leaders. The third market segment, characterized by mobile payment companies such as Mobiquick, Paytm and Payzippy, also hold decent growth opportunities for entrepreneurs looking to get started in this space.

Overall, the m-commerce market holds tremendous growth potential. Companies that wish to foray into the m-commerce market have the choice to deal with multiple service segments such as mobile payments, retail enablement, App based services and on demand services. Looking at the growth rate achieved so far within the industry, established firms are willing to invest in the startups in m-commerce space. All that entrepreneurs need to do is to develop a strategically designed business model based on a unique idea that is enough to make a mark in this opportunistic area. Also, making an early entry into a relatively nascent market will be a crucial advantage.

This article is written by Lekha Gyanchandani, Sr Analyst with DART Consulting.

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