Table of Content

Sl.no. Topic Page. No.1 Introduction 31.1 The App Revolution – An Opportunity for Ecommerce 41.2 Flipkart and Myntra 72 Literature review 82.1 App Ecosystem 82.2 Decision variable Considered 93 Problem Statement 93.1 Decision Statement 103.2 Research Objective 103.3 Research Question 103.4 Hypothesis 104 Research Methodology 114.1 Questionnaire 114.2 Sampling 114.3 Data Analysis Plan 115 Data Analysis 125.1 Demography 125.2 Checking Assumption 135.2.1 Linearity 135.2.2 Normality and Auto-correlation 145.3 Model Fit 155.3.2 Final model 165.4 Segments on the basis various parameter 185.4.1 Gender 185.4.2 Education 185.4.3 Usage 195.4.4 Age 206 Managerial Implication 217 References 218 Appendix 22

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1. Introduction

About three quarters of Indian population have access to a mobile phone. Mobiles are the most ubiquitous modern technology in some countries population does not have bank accounts, electricity or even clean water but have access to mobile phone. Mobile phone has been used to provide education, health related information and access to various government initiatives. Wide presence of mobile technology in developing countries have led to various technology and business innovation such as Multi-sim card phone, mobile payment and low value recharges. Even use of mobile phones can increase the success rate in overcoming the development challenges such as digital literacy and social problems compared to other means of adaption platforms.

With the rapid development and adaption of mobile phones has also led to rapid development in processing power and technology adaption in mobile which in turn led to faster development in software programs called mobiles apps. These app mostly run on smart phones and use data access of these mobile devices to deliver information or perform specific functions such as gaming, social networking, ecommerce, navigation and other utilities to name a few.

That the rapid growth of apps can have a transformative impact on livelihoods and businesses is supported by empirical evidence that is being carefully collected across the world. By making phones more powerful, apps, aided by high-speed networks and innovation can have important productivity enhancing impacts throughout the economy. It has been repeatedly shown that access to telecommunications improves productivity by, inter alia, reducing information asymmetries and containing transactions costs. Because mobiles substitute for fixed lines in developing economies, the growth impact of mobile phones is higher than that for developed economies.

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1.1 The App Revolution – An Opportunity for Ecommerce

As smartphone are more in comparison to laptops and PCSs in developing countries like india so the focus on mobile app by ecommerce site like Flipkart and myntra seem logical. A purchase using any medium through brick and mortar stores or online store is a complex process it is not restricted to researching and buying everything so buying behavior of consumer need to be taken into considerations.

As from the graph it can be seen that mobile user in india has taken over the laptop or PC user in 2014 and also the internet penetration is also increasing.

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Source: Morgan Stanley Research

Source: International Telecommunications Union

Myntra and flipkart app-only strategy seems logical as it allow them to manage a single sales channel, protect consumer data and provide a personalized shopping experience. However, there are several factors to be considered in Indian context such as consumer behavior, growing internet adoption, connection speed, device usage, price sensitivity, availability of product information and recommendations, consumer ratings, growing income of middle class.

1.1.1 INCREASED MOBILE TRAFFIC

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The mobile traffic has increased 10 fold in the last eighteen months and according to a study conducted by Ericson 58% of the people who do not use e-commerce services on smartphones said that they would be starting it within a year.

Source: Telecom Companies Annual Reports Avendus Analysis

Number internet user through smartphone has increased to 140 Million by 2014 and according to flipkart and myntra about 90% of traffic and 70% of purchase are from mobile app.

1.1.2 PERSONALIZATION

By mobile app these ecommerce sites are able to provide a more personalized experience for example geo tagging the user and providing the user with product list which tailor made for them according to their location, taste and interest.

1.1.3 RESEARCH OR PURCHASE?

The consumer mostly prefer to buy product online medium only after a close inspection of product which is sometimes difficult on the low resolution screen of the smart hence smart are used to research and desktop or laptop and used to inspect the product before buying

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Source: Nielson Informate Mobile Insights

1.1.4 PUSH MESSAGE STRATEGY

These are handy and most of the people carry their mobile with them on daily basis so these devices could be used by the ecommerce websites like flipkart, snapdeal to send the app installer the advertisement directly to their devices through notification or push message for marketing purposes

1.1.5 INDIA – A PRICE SENSITIVE MARKET

India is highly price sensitive market and online buying is still in growing state and most of the people still do not prefer to buy online and use online shopping occasionally.

From the survey shown by ‘Information on the Survey ExperienceU.com,

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Further Advantages of mobile include

A rich and more compelling user experience. Mobile apps can use smart phone capabilities such as gps, camera and graphics and

other apps to provide a more indulging experience. Mobile can run offline i.e with no internet so that user get better performance at all

times Apps are easily integrate with m commerce platform and mobile wallets Further app provide Front of mind penetration:- as it provides an always visible icon at

the screen which reminds people to use them.

1.2 Case study of Flipkart and Myntra

In 2014 myntra became part of Flipkart and endorsed the app-only strategy of Flipkart. As a result at the start of 2015 they started to develop their app only strategy and in may myntra goes app only. The following timeline shows the shit to app only strategy.

Flipkart and myntra thought that they will be able to fully capitalize on the app only medium and mutually benefit the consumer and themselves through.

Providing superior customer experience. lower Latency icon on the home screen Faster scrolling Push customers notifications and so on

But the consumer did not liked the idea of app only medium which resulted into loss of sales and U-turn in the strategy by flipkart and myntra no matter how much they incentivized shopping on the app.

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There are many reason for this to happen:-

Indian consumer own cheap devices which do not effectively support apps Forcing them to buy from a single medium Preference of consumer to shop through conventional web browsers Losing out on the consumer segment how still does not own Mobile devices but have

desktops or Laptops Further selling or retail business is based on the engagement of the customer and

willingness of customer to buy the product So decreasing the no. of ways to indulge was not a positive move.

In India, mobile internet network is unreliable which hampers the mobile only experience.

2.0 Literature Review

2.1 The App Ecosystem

The app Ecosystem is part of the internet ecosystem which consists of network infrastructure, devices, content and users. Apps are a subset of content and can add to the attractiveness of the broadband network by providing services that are of considerable practical use. Since it is part of a highly networked and interdependent ecosystem, the app economy cannot be viewed in isolation. Its functioning depends on the existence of a robust network infrastructure, appropriate devices and a supportive OS landscape. Its general purpose nature makes it ubiquitous across several verticals of which healthcare, education, business and governance, among others, generate considerable interest due to their ability to address pervasive supply side bottlenecks.

Figure captures the different dimensions of an app ecosystem. The app Ecosystem consists of three principal activities which are app development, distribution and demand represented by the nodes of the pyramid. The three main factors that influence the core activities of the app

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economy are network infrastructure, devices represented as different layers of the pyramid. Each of these dimensions is discussed below.

2.2 Decision parameters Considered

So basically we are going to concentrate on the demand side of the pyramid and try to investigate the various factor responsible for the acceptance of the mobile app and their importance to develop an app only model for ecommerce.

For consumer acceptance of mobile- only medium, we used the proxy of mobile internet, m-commerce and e-commerce to narrow down the factors which can be responsible for the effective acceptance of mobile only ecommerce platform. So we narrowed down the parameter to these

1. Ease of use 2. Security3. Personalization4. Discounts/offers5. Cost of use6. Ease of social interaction

3.0 Problem statement

Many online retailers are preferring to move to an app only platform. But they are hesitant to do away with their website model and completely move to an app only platform because the

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factors affecting consumer acceptance towards app only model and subsequent use are unclear.

3.1 Decision statementWhat factors can be used to improve user acceptance and subsequent use of mobile only app models?

3.2 Research objectivesList the factors that affect user acceptance of mobile only apps and the correlation of these factors with user acceptance of this model.

3.3 Research questions

What factors affect the user acceptance and subsequent use of mobile app only commerce model?

How important is each factor in affecting the user acceptance?

3.4 Hypothesis

H1: Ease of use is positively related to user acceptance of mobile app only commerce modelAs ease of use will have major impact on the usability of app and re-use of app as consumer consider that the app reduce their work or helps them to shop easily hence it should be positively correlated to acceptance of mobile only medium.

H2: Perceived security positively affects user acceptance of mobile app only commerce modelAs consumer perceive that the mobile app is more secure and reliable the consumer will seamlessly move to new channel will accept the model.

H3: Personalized catalogues and marketing positively affects user acceptance of mobile app only commerce modelAs consumer would be provide a customized experience matching his/her interest and needs consumer will be more willing to use app over other medium to minimize the hassle of shopping and acceptance should increase.

H4: Discounts/offers will shift consumers towards app only modelAs consumer would be provide a customized discounts and offers matching his/her interest and needs consumer will be more willing to use app over other medium to minimize the hassle of shopping and acceptance should increase.

H5: Cost of using app only model negatively influences user acceptancePerceived cost include the initial and ongoing costs of using mobile app affects the attitude of potential adopters and indian consumer are price sensitive so this negatively impact the acceptance.

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H6: Ease of social interaction through apps improves user acceptance of mobile app only commerce modelAs shopping is more than researching and buying of product it also involve acceptance and admiration of other parties so improving the social interaction of consumer should positively impact the acceptance of mobile app based platform.

4.0 Research Methodology

4.1 Questionnaire Various question where developed using the literature review under various decision variables through adopting the question for m-commerce and ecommerce to Mobile app only medium and the question were to be rated on a scale of 7 from disagreeing to fully agreeing to the statement. (The questionnaire is include in the Appendix)

4.2 Sampling Random sampling was used to collect data from seventy respondent through online line survey form. Demographic data such as age, gender, education and frequency of usage was also used to gather the data for specific segments to see focus on the parameter affecting that particular segment. Apart from the data for decision variables, statement for acceptance of mobile only model has also been developed and data for that has been calculated from the same population.

4.3 Data Analysis Plan Data gathered for various statement on agreeability scale would be used to formulate composite score for each decision variables which would be used as an input data for regression equation to see the relative impact of decision variable on the acceptance of mobile only model.

Acceptance of App only platform is the dependent variable (DV), which is determined by Six identified factors which are Ease of use, Security, Personalization, Discounts/offers, Cost of use, Ease of social interaction

Acceptance = ẞ1*EASE + ẞ2*SEC + ẞ3* PER + ẞ4*OFFER + ẞ5*COST + ẞ6*SOCIAL + Constant

For data analysis we are going to use 10% as our significance as no. of data collected is 65 people which is less to use 95% accuracy.

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5.0 Data Analysis

5.1 Demography

As can be seen from the data we gathered data from various segement and considered various parameter to segment the data.Mobile usage data is not significant to use regression for the segment on that basis.

5.2 Checking Assumption

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5.2.1 Linearity

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As from the graphs it can be seen that most of the variable are having a linear relationship with the acceptance.

5.2.2 Normality and Auto-correlation

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5.3 Model Fit

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As from the histogram and probability plot it can be seen that the residual data is normally distributed

And from the scatter plot it can be seen that there is visible correlation between residuals

As form the table it can be seen that adjusted r square value is 0.536 so the model explains the about 53.6 % variance.

Further Significance value for f statistic is approaching zero so it show that at least one of the independent variable in significant for the model.

Coefficient table shows that Ease, Cost and social impact are significant variable with ease having the maximum impact followed by social interaction and then cost which negatively correlated with the acceptance.

5.3.1 Outliers

5.3.2 Final Model

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Plotting Cook’s distance with standardize residuals we can see that their few outliers which need to be removed to see the impact over model.

After removing first outlier we didn’t went ahead for removing other seeming outlier as it was removing higher age people as outlier.

As form the table it can be seen that adjusted r square value is 0.577 so the model explains the about 57.7 % variance.

Further Significance value for f statistic is approaching zero so it show that at least one of the independent variable in significant for the model.

Coefficient table shows that Ease, Cost, offers and social impact are significant variable with ease having the maximum impact followed by social interaction and then cost which negatively correlated with the acceptance.

While personalization is on border line and has negative correlation showing that consumer perceive that the mobile apps are not personalized for their interest and taste.

Security is highly in significant for the model.

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5.4 Segments on the basis various parameter

5.4.1 Gender

As form the table it can be seen that adjusted r square value is 0.579 for male and 0.727 for female so the model fits female segment better.

Coefficient table shows that social impact is most important variable for male segment and Ease being the most important variable for female segment.

5.4.2 Education

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As form the table it can be seen that adjusted r square value is 0.720 for graduate and 0.473 for female so the model fits graduates segment better.

Coefficient table shows that offers is most important variable for Graduate segment and personalization being the most important variable for Post graduate segment.

5.4.3 Usage

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As form the table it can be seen that adjusted r square value is 0.602 for daily user and 0.976 for occasional users so the model fits occasional user segment better.

Coefficient table shows that offers and social interaction is most important variable for daily user and EASE of use, cost and perceived security being the most important variable for occasional users segment.

5.4.4 Age

For age we regrouped the people into two group less than 25 yrs and more than 25 yrs as data was restricting the formulation of more groups.

As form the table it can be seen that adjusted r square value is 0.555 for Less than 25 yrs segment and 0.646 for more than 25yrs users so the model fits them equally.

Coefficient table shows that offers, social interaction and ease is most important variable for less than 25 yrs age users and EASE of use, personalization being the most important variable for more than 25 yrs age users segment and it is perceived by this segment that personalization is not good enough in the apps to improve the acceptance of mobile only platform and lack of it is negatively impacting the mobile only strategy.

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6.0 Managerial Implication

As Ease, Cost of usage, offers and social integration are important variable for acceptance of mobile only platform so a model focusing on these factor should be formulated

Personalization is perceived negatively correlated and is on the border line so consumer perceive personalization lacking in mobile app for ecommerce. So these should be focused upon.

Occasional user perceive security as significant and are sceptic about it as compared to daily. So for converting occasional user to regular user the security of app should be focused upon

With age group above 25 yrs of age, cost of usage has major impact as they might perceive to use app seamlessly you require better phone and robust mobile which can be removed by optimizing apps for slower net and cheaper phone.

Social Integration is one of the major factor so integrating E-commerce app with social network should be emphasized upon.

7.0 References

• “Critical Factors in Consumers Perception towards Mobile Commerce in E-Governance Implementation: An Indian Perspective”, Kanwalvir Singh, Himanshu Aggarwal International Journal of Engineering and Advanced Technology (IJEAT) ISSN: 2249 – 8958, Volume-2, Issue-3, February 2013

• Mobile Commerce: An Analysis of Key Success Factors, Hyun-Hwa Lee* and Seung-Eun Lee, Journal of Shopping Center Research (2007), 14, 2, pp. 29-62.

• “Adoption and Evaluation of Mobile Commerce in Chile”, Ranjan B. Kini, Indiana University Northwest, USA

• “Consumer Attitude towards M-Commerce: The Perceived Level of Security and the Role of Trust”, Zakaria I. Saleh, Ahmad Mashhour, Journal of Emerging Trends in Computing and Information Sciences, Vol. 5, No. 2 February 2014

• Kabir, G., & Hasin, M. A. A. (2011). Evaluation of customer oriented success factors in mobile commerce using fuzzy AHP. Engineering and Management, 4(2), 361-386 doi:10.3926/jiem.2011.v4n2.p361-386

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AppendixQuestionnaire

Demographics

Age GenderEducation levelAverage internet usage/week Frequency of mobile app buying/ weekOwn a mobile device for how many years

Ease of Use

Mobile only platform Enhances transparency & quality of work Mobile only platform Enhances speed & efficiencyMobile only platform is More flexibility (anywhere, anytime) - 24x7 Easy to understand and navigate app

Security

Chances of losing money through shopping on mobile appHacking/Virus/Spam may occur through appsApps can’t be trusted to safeguard user’s privacy info Privacy information of client gathered through apps can be used in a wrong way

Personalization

Mobile App Address the customer personally or individuallyCustomer register with an account / password and can freely edit their profilesIndicating tailor made purchase recommendations to individual customersPresentation of products on the app is easily accessible Gives customers the opportunity to look at their previous orders onlineMobile App has ample payment options

Cost of use

The equipment cost is expensive for using Mobile AppI think access cost is expensive for Mobile App/ internetI think transaction fee is expensive for mobile app.

Discount/offers

Mobile app is better for discounts and bargains hunting

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Information about sales/ discount coupon is easily accessible Makes special offer to individual customersApp provide better prices than the other platform

Ease of social Interaction

I enjoy socializing with others when I shopShopping with other is a bonding experience Mobile app provide easier way to share the product I am interested in.Interacting with friends and family while shopping allows me to take decision properly.

Acceptance scale

My general opinion of app only shopping is favorableI will recommend using shopping apps to othersUsing mobile apps fits my life style Mobile app are convenient than other platforms

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