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Why Onward Mobility’s Arun Menon Thinks Physical Retail Of Apps Will Work

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Onward Mobility, the company that uses the brick and mortar retail model for selling mobile apps claims to have sold 400,000 apps since it launched launched commercially in January 2011. It believes that a market like India is not mature enough for self-service or DIY (Do It Yourself) app stores, just like assistance is sought in other retail segments. The company claims a presence in major cities across the country, apart from four states in the southern part of India, . It plans to go pan-India by November this year. According to Arun Menon, CEO of Onward Mobility, the company sells apps through a network of 10,000 retailers.

– Infrastructure at retailer’s end: The retailer need not install a computer at his premises. He transfers apps to the consumer’s phone through Bluetooth or via a Memory Card. The customers buys a scratch card which has a license code which can even be sent over the air through SMS to activate the app.

– Why physical retail? According to Menon, a large part of the eco-system has already been developed by telecom operators. Besides small business owners who sell related products, the apps are also sold through retail chains like The Mobile Store and Spice Hotspot.

Menon feels that the current online app store model faces challenges of discovery, payments and trust. For a consumer browsing through hundreds of apps is tedious. He says that one can’t expect the masses to search and analyse features, buy apps and install them on their own. The challenge of payments is also a major problem with an extremely low credit card penetration. Menon adds that the telecom operator billing model is a flawed model since telcos see apps and VAS services as a part of the data revenue and their focus is on enhancing it.

He gave the example of how ISPs had their own content portals when the internet was at a nascent stage, and how all over the top players such as Facebook, Google and Yahoo have now replaced them. He adds that selling apps through a retailer makes him a human recommendation engine. He would have a better idea of what a consumer walking into his establishment is more likely to buy.

-Deals & Rev Share: Onward Mobility doesn’t deal with mobile operators, so revenue sharing takes place between the content developer, distributor, retailer and after taking out other costs including marketing and sales expenditure, the rest goes out to the company. According to Menon, the content developer gets around 10%-25% of net revenue after taxes, the same percentage goes to the retailer, while the distributor’s share is between 8%-15%.

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– Apps: The company retails productivity and utility apps, health apps and games, and has signed deals with 5-6 partners including EA Sports through Nazara, Hero Craft and Bull Guard. It is also in talks with entertainment and education content providers. Menon says that the company will not retail frivolous fart apps, and will only do premium high value apps which solve real world problems, such as privacy apps, phonebook apps, mobile antivirus, call recording apps and others. The price range of apps starts from Rs 300 and goes upto Rs 1,000. However, some upcoming apps are also priced between Rs 2,000 and Rs 5,000. The company offers 10 apps in the utility space and all game titles from EA-Nazara and Hero Craft for J2ME, Symbian, BlackBerry and Android platforms.

– Marketing: Menon says that Onward Mobility has 500 people on the field who look after marketing and below the line promotions including canopy activities, road shows and others. They also look after product training and costumer education.

– The company also intends to add videos and music to its product portfolio before the end of this financial year and is in currently in talks with content players.

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