Who will take the mcommerce tide in India at its flood?

From payment facilitators like FreeCharge and Atom to online marketplaces like Flipkart and Snapdeal, ecommerce companies in India are seeing a rapid increase in mobile traction, and are figuring out ways to address this mobile-first market. But the user experience is still far from hassle-free, compounded by mobile-unfriendly payment gateways and language barriers.

FreeCharge is a case in point. It’s an online facility which allows users to recharge their prepaid mobile phones, direct-to-home satellite television connections, or data cards instantly, and rewards them with discount coupons. Until December last year, only five percent of users accessed the facility from their mobile phones. Today 70 percent of the transactions on FreeCharge happen on a mobile platform.

Alok Goel, the former chief operating officer at ticketing site redBus.in, who is now the CEO of FreeCharge, says that as soon as its mobile platform was streamlined, users shifted en masse. “This shows the hunger among consumers for good mobile products to conduct ecommerce transactions. Mobile transactions on the FreeCharge app have grown 30 times since January. Seventy percent of our transactions come from mobile platforms and we are growing more than 400 percent year-on-year,” he told Tech in Asia.

But when FreeCharge streamlined its mobile platform, it faced a Hobson’s choice: expose its users to banks which were out of sync with the mobile world or exclude some banks from its payment options. He said:

We had to leave out quite a few in the end, because many banks just don’t have mobile-friendly payment gateways in India.

Brick-and-mobile model

Despite such hitches, the shift to mobile is inexorable. Even a primarily brick-and-mortar company like Titan, which sells jewelry, watches, and eye wear, is getting its mobile act together. A responsive design for mobile phones and tablets has resulted in 15 percent of Titan transactions moving to those platforms, according to Alokedeep Singh, head of ecommerce business at Titan Industries. “This year there has been a leap from browsing to actually completing transactions. Mobile traction for even a touch-and-feel product like jewelry shows the formidable opportunity in this space,” he said during a recent panel discussion in Bangalore.

Homeshop18.com started a mobile commerce division two years ago “because we realized we need to be where our users are,” said Vikram Dasu, ecommerce head at the online marketplace. This had resulted in a ten-fold increase in mobile shoppers for Homeshop18.

The country’s biggest ecommerce sites are reporting similar trends. Snapdeal says more than half its sales now happen over its mobile platform. “With increasing consumption of data on mobile phones, we think that the next wave of digital commerce customers will come from this medium,” Snapdeal vice president (product management) Ankit Khanna said.

Last year, mobile data traffic doubled in India and Southeast Asia, according to mobile ad exchange Vserv.mobi. Nearly a third of the traffic on ecommerce sites came from mobile in 2013, and this could cross the two-thirds mark this year.

Flipkart co-founders Sachin and Binny Bansal expects the country’s largest online retailer to be largely an mcommerce company in a couple of years.

“India is at an inflection point right now. In a couple of years, 500 million people from all over the country will get online through their mobile phones. Shopping will have to be very different then. This funding is all about making it happen,” Sachin Bansal said when announcing US$1 billion of funding in August. “Twelve months ago, just five percent of our revenue came from mobile shoppers. Now, 50 percent of our shoppers are mobile users,” he added.

So it made good business sense for Flipkart to focus more on improving mobile payments for its customers. It recently invested in mobile payments startup ngpay (Next Generation Pay) and is phasing out their own payments product PayZippy.

See: Why Flipkart is shutting down its electronic wallet PayZippy

Language barriers in the hinterland

From mobile-first to mobile-only

250 million internet subscribers

More time spent on phones than TV