Homegrown Flipkart and Amazon are in a constant battle to dominate the Indian e-commerce market, which is estimated to reach $60bn by 2020.
Both Flipkart and Amazon locked horns over festive sales recently and are also foraying into retail and grocery.
Flipkart and Amazon India both recently announced that their respective Android mobile applications have reached 100 million downloads on Google Play Store.
The Drum spoke with Varun Jha, head, Cheil e-commerce, who said the spike was attributed to activity around festive sales.
He said: "The download numbers for both the players were around 60 million few months ago and this sudden spike can be attributed to the festive season in Sep-Oct 2017."
As to whether it signifies growth, he added: "App downloads alone can’t be counted as key indicator of user growth in e-commerce. As more than more 70% of the new users uninstall the app within a month of downloading it. More importantly, Android has a 73% 30 day uninstall rate (for the e-commerce category) while iOS has 46% 30 day uninstall rate. A high uninstall rate significantly decreases the ARPU and hence limits the 30 day ROAS (return on advertising spend)."
Amazon might have an edge in India as the Amazon app was launched in December 2014 and achieved the 100 million downloads in just two years and 10 months, sooner than any other company in the industry. Amazon's app doubled its user base since last Diwali by adding 50 million downloads in 12 months.
According to Similarweb, the Amazon app enjoys the highest penetration (in the shopping category) among Android users in India with one out of every three users having the app installed on their phones.
Jha, however, believes that app download numbers are like buzzword GMV (gross merchandise volume), which was used by e-commerce players until 2015. He said: "The market moved beyond vanilla GMV and started focusing user metrics like MAU (monthly active users), DAU (daily active users), DTU (daily transacting user) and HAU (hourly active user)."
Flipkart has announced that it will roll out its own smartphone while Amazon is working on several India-first inventions for the app.
Kishore Thota, director customer experience, Amazon India said: “Indians are mobile-first citizens of the world and we are humbled by our customers overwhelming response to our mobile app. All our innovations are mobile-first, we are the first ones to design the most light-weight app, Micron, to suit even the low-end smartphones. We also introduced near-automated sign-ups for first-time mobile users, made it easier for customers to pay online, revamped its daily deals offering, among other innovations. It makes us really happy to see the rapid growth and strong adoption with our customers”
The Drum also spoke with Ayan Banik, head of strategy, Cheil India who believes Amazon has cared much less about ‘peer pressure’ or the ‘next big thing in the future’, while doggedly pursuing a strategy of compounding e-commerce growth through new business and products.
According to e-commerce experts, the key thing is to find out of the total 100 million lifetime installs and how many users are still using and transacting on the app. More importantly, how does the repeat user cohort looks like (over 90 day period) and what has been the percentage increase in repeat cohort? These are the real questions need that to be answered by e-commerce majors when it comes to app user growth. Simple X million download number is a passé.