Enough has been said about how quickly technology has reshaped the business environment since the pandemic. Today, sellers from every business category see the digital transformation of their business as inevitable, especially if they want to meet the needs of their ever demanding customers who expect personalisation, and societies and governing bodies that demand sustainability and adaptability in an era where resilience means survival.
What should interest you more is how retail apps serve as an invaluable support to businesses of different sizes and complexities with extensive personalisation, branding and conversion power. More importantly, how taking the right decisions when it comes to deciding whether to make an app for your business versus using an existing app can be tricky.
According to data from Sensor Tower, the top five most downloaded apps in the shopping category in Pakistan are Alibaba.com, Daraz, OLX, Airlift Express and GrocerApp. As is evident for any casual user of Facebook and YouTube, these are the same apps bombarding daily active users with videos with a call to action to download them. Therefore, the appearance of these five in the top downloads charts for Android makes perfect sense. The real question is, will they always dominate?
According to research from the Rotterdam School of Management, the app market relies on three stakeholders: a digital distribution service such as Google Play; the app developer such as VentureDive, and the app user. Researchers found that an app’s position in a top chart is determined by a combination of previous updates, ratings, reviews, downloads, user engagement, retention and revenues from in-app purchases. Given that Android comprises most operating systems in the world, more so in Pakistan compared to iOS, for an app developer to have staying power on a smartphone is no small feat. Smartphones have limited space and research shows that there are at most only 10 apps that people use on a daily basis. This begs the question as to whether a user has enough reasons to open apps such as Daraz, GrocerApp, and OLX, or sees them as a means of securing a deal, after which the app is deleted.
Super All the Way: The super app model followed by Careem and Foodpanda is what allows them to retain their place in their users’ smartphones. People need to commute daily and eat daily, hence the app is relevant on a daily basis compared to clothing and electronics shopping prevalent on Daraz or OLX. This may be why Daraz is investing in entertainment products and creating content aimed at giving their app staying power and the gamification of frequent shopping. Many clothing retail apps like Outfitters, Bonanza Satrangi and ELO have come out in Pakistan relying on price points and instant discounts, with an average rating of 4+ and overall downloads of less than 10K (android only). Clothing is the largest retail category in Pakistan with almost all players active on e-commerce. This brings us to the viability of the loyalty apps offered by these brands.
One and Done! As I visited the above-mentioned retail outlets, the sales team directed me to download the app and take advantage of instant discounts, a practice widely adopted in the US. Despite the assistance, I instantly deleted the app after availing the discount; it did not have anything else to offer. ELO is a popular online only seller offering branded items from international brands like Zara, H&M and Abercrombie at throwaway prices. Even Zainab Market does not offer jeans for Rs 199, yet these guys somehow manage to sell export rejected pieces of international brands at Rs 99 and under. The ELO App has a rating of 4.1 and over one million downloads on Android. I can easily call it a super app as it offers a variety of branded clothes, accessories, shoes and home goods at throwaway prices. The offers are never ending, and the sense of urgency developed on their one-day sale caused the website and the app to crash multiple times in their early days. This is the same reason we see Carrefour, Imtiaz, Metro, CSD and Naheed Supermarket listed in the top 20 shopping apps in Pakistan. As established earlier, consumers need options and variety so apps have to offer a very good reason to take up space on a smartphone.
Going Directly to Consumers – AKA D2C: Apps as a selling platform are becoming more and more popular as the barrier to entry is low and once you have a super app, the customer is yours and can be retargeted easily, as they are less distracted as the products listed are mobile optimised, and the customer journey is seamless and competition is low. Unilever’s Munchies is a retail app, (not so famous yet but getting there) and offers a variety of items with next day delivery. The data science behind developing the app allows brand managers to basically talk to the customer whenever they want to, something which is not possible when you use a rented property like Daraz or OLX.
Start-ups in the eCom SaaS Sector: As per a tweet on invest2innovate’s round up of Q2 2021, the amount of funding in Pakistan’s start-ups ecosystem has nearly doubled compared to 2020 ($65.6 million), with e-commerce contributing $49.9 million. As reported by the State Bank of Pakistan, the e-commerce merchants increased by 61.8% to 2,523 in Q3 FY 2021.Many apps have been launched to enable online selling (seamlessly taking sellers offline to online) – the key survival tool post pandemic. The core purpose of these apps is not to sell but to serve as a selling medium and can be categorised under SaaS. Chickoo and Dukan.pk are picking up traction as they enable individuals and businesses to go online within few minutes. An individual downloads the apps, registers, uploads a product image, add product details and pricing and that is it – they are live at chickoo.pk/StoreName. BSecureCheckout is another solution which provides Application Programming Interfaces (APIs) and offers a seamless checkout journey with multiple payment options and features like ‘Buy Now and Pay Later’. Their Instant Shop feature is designed to take offline sellers online, without going through the hassle of developing a website. The Instant Shop as of now is web based but soon they will be launching in the app world.
So, What Next? An app’s survival depends primarily on what unique need it satisfies and how effectively and efficiently it does so. For fashion and beauty stores, AR and VR features can serve the purpose. AR can be extended to home goods and automobiles and almost anything, and virtual showrooms can be created. L’Oreal Pakistan’s Makeup Genius App launched in 2015, despite being previewed at PFDC L’Oréal Paris Bridal Week (PLBW 2015), could not last probably because it lacked market readiness. The question remains, what happens when social media giants like Facebook, Instagram, and TikTok evolve further into a super-duper universal app (something I sense they are moving towards), allowing customers to search, compare, review, buy, pay, share and recommend almost any and all brands on a global level – a platform fulfilling all levels of Maslow’s hierarchy of needs? As more and more brands develop their apps to offer a customised playground, we must keep in mind the power of social commerce and how it will transform e-commerce in Pakistan.
Mehwish Aslam is Project Manager, bSecure.pk. firstname.lastname@example.org