Mobile E-Commerce Is Already Higher And Stronger Than E-Commerce
Revenues generated on smart phones are already well above those of e-commerce, fueled by the explosion of uses and the diversity of solutions that it offers to the online and offline merchants. Mobile Commerce incorporates the growing weight of the smart phone in online purchases, the considerable growth of the App Economy, the rapid arrival of mobile payment and its major influence on retail sales.
1) Buy online on smartphone or tablet
Driven by equipment and new uses, E-commerce via smart phones and tablets represents an estimated revenue of $ 23 billion by E-Marketer in 2015 in the United States (1). According to Critéo, 30% of online transactions are already done via a smart phone or a tablet (2).
The weight of the mobile in online commerce is expected to account for 45% of e-commerce and weigh 284 billion dollars in 2020 according to BI Intelligence (3). In France, FEVAD estimates € 6.4 billion of online purchases from a mobile terminal in 2015.
One can bet on an acceleration of the purchase on line via its mobile, favored by the growth of the use of smartphones and the implementation by brands and retailers of applications and mobile friendly sites.
2) App Economy boosted by games, music and video on smartphone.
Driven by the very strong growth of applications for games, music and video on smartphones, the vitality of the App Economy is no longer to be demonstrated. It is nevertheless necessary to specify that the revenues of this new economy are clearly differentiated from the traditional E-commerce by a purchase on the app stores (App Store & Google Play …).
This App Economy is part of the “DNA” of the smartphone, popularized by brands such as Candy Crush, Angry Birds, Clash of Clans, Spotify, Apple Music or Tinder …
The purchase of mobile applications is by far the most common practice in the number of mobile transactions, favored by the simplicity of the integrated purchase (the Freemium model). In all countries, the App Economy is expected to reach $ 50.9 billion in 2016, up from $ 41.1 billion in 2015, an increase of 24% according to App Annie (4).
3) The Mobile Payment or payment with its mobile in stores
According to E Marketer, the weight of the Mobile Payment will triple in the United States in 2016 to reach 27 billion dollars (5). Nearly one in five Americans will use the Mobile Payment in 2016 to purchase products or services in points of sale.
With Apple Pay, Android Pay or Samsung Pay, “Mobile Wallets” become a standard model with a default installation in smart phones. Two other players with high potential are identified by Gartner: Wallets of banks and credit cards, Wallets of distributors (See launch of Walmart Pay in December 2015).
Gartner said in its study that the development of mobile payment solutions will be largely linked to deployment country by country according to local legislation and the involvement of local players (banks, operators and distributors)
Note also that other solutions, such as payment on the invoice of the operator Telecom, are very popular in some markets and offers great potential for certain uses such as parking, ticketing or digital goods.
4) The influence of the mobile on the trade in points of sale: The Mobile to Store and the Mobile in-Store.
It is known that 90% of purchases are made at points of sale and the smart phone has introduced new means that transforms the traditional trade in a sustainable manner. The Smartphone is now the “missing link” linking the digital world and the physical world.
Consumers prefer the use of the smart phone for on-line research before purchasing, product or price information, communication with relatives at the time of purchase, dematerialization of the loyalty program, couponing, promotion or The good offer. They are also looking for practical information about the store: timetables, address, location, availability of products.
More and more brands are encouraging mobile use for customer relationship management, confirmation of a transaction, promotional offers using SMS, push notifications or Beacons in points of sale.
But there is still a lot of work to be done by retailers and brands to meet consumer expectations. Nevertheless, Gartner expects the mobile will influence $ 689 billion in store sales (6).
To understand the real weight of Mobile Commerce, it is important to go beyond the commonly accepted idea that “M-commerce” comes down to “E-commerce on smart phone”.
It is absolutely necessary to integrate the specificities of use of the smart phone including mobile applications: the App Economy is now more important in CA than the “E-commerce on mobile”.
We must add the programmed mutation of the smart phone into payment terminal: the Mobile Payment is expected to reach 27 billion dollars in 2016 in the US market alone.
Last but not least, we must integrate and master the growing influence of the smart phone on purchases in points of sale.
In short, Mobile Commerce must be seen not as a subset of E-commerce, but as a new ecosystem that accompanies consumers from the online purchase to the point of sale.
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Author: Azhar Iqbal
Azhar Iqbal, with more than 15 years of programming experience, posses a firm command over system analysis, system design and custom software solutions. He envisioned utilizing his extensive experience and expertise to elucidate Telephony Applications Development and design more practical solutions. You can reach him through his website Ranking Solutions or LinkedIn Profile.