M-Commerce May Soon Overtake E-Commerce: KPMG

Mobile commerce is likely to overtake e-commerce in the next few years, spurred by the continued uptrend in online shopping and increasing use of mobile apps, says an industry report.

"It is estimated that the mobile app downloads would grow sixfold by the end of this year to 9 billion apps," said a KPMG report, adding that India has been the fastest growing mobile app market in both 2014 and 2013.

India contributed to 7 percent of the global app downloads, ranking fourth behind Indonesia, China and the US, the report said.

The optimism comes from the fact that people accessing the Internet through their mobiles had jumped 33 percent in 2014 to 173 million and is expected to grow 21 percent year-on-year

till 2019 to touch 457 million.

The report also said that among the entire app usage, shopping tops, with mobile commerce likely to overtake e-commerce.

"With online shopping platforms seeing an impressive growth in the number of transactions executed through mobile apps, it is not surprising that major e-commerce portals are contemplating discontinuing their full-version websites altogether, to focus solely on the mobile platform," it said.

Mobile apps are particularly seen as a significant new avenue to target consumers.

The report said that with several such avenues opening up, marketers, content creators and advertisers are expected to continue working towards new and more innovative ways to reach

out to their target audience.

The report indicated that in keeping with the trend of increasing mobile app usage,there has also been a considerable cut in the usage of on-deck services that can be directly accessed through the handset screen offered by the telecom operator portals.

However, despite growth in the number of apps developed and downloaded, companies are finding it difficult to encourage users to switch to paid versions. This has been a critical challenge, said the report.

"As much as 90 percent of the apps downloaded in the country are free," noted the report, adding nearly 98 percent of Google Play's global revenue from apps and games is coming from the 'freemium' apps.

These apps allow free access for limited services or a 'lite' version of the app. Users are expected to pay for additional services or a premium version.