If you own a business and want to sell a certain product online, then most probably the answer to the title question is: You.
What’s more, it seems that you should consider it quickly.
The next one thousand words will not repeat the full account of the impressive history and data of the mCommerce market, but only give its highlights. If you have not yet been fully exposed to the world of mCommerce then some additional, general surveys on the industry are recommended reading. The Wikipedia page dedicated to the subject can be a good place to begin.
This article, on the other hand, will simply try to explain, in brief, the opening argument above.
Nonetheless, it is impossible without a few facts and information that testify to the existing trends in the mCommerce market:
- According to ABI in 2015 the mCommerce market is expected to reach a scope of US$ 119 billion worldwide.
- The mobile phones market, which is, of course, a significant factor in the growth of the mCommerce market, has increased substantially each year. According to Gertner, 430 million appliances have been sold worldwide during Q2 of 2011, some 30% more that in the equivalent quarter of 2010.
- 85% of the telephones in the world access Internet. It is expected that in 2014 the mobile phone will become the main platform for Internet access and will surpass the PC.
- A large part of phone surfers, surf only on the phone. 25% of the USA phone surfers do not use the PC for surfing at all. This trend is expected to increase with time.
- Latest studies show that the conversion rate and the average scope of buying, the two most significant data in eCommerce applications, are significantly higher with buyers using mobile phones than with buyers that buy at eCommerce websites through the PC.
- Japan and South Korea are the most active mCommerce markets, in relation to the population. In Japan alone the mCommerce market has passed the US$ 10 billion in 2009. India and China are the most significant growing markets.
The conclusion is evident:
Providing that the share of eCommerce in the general commercial pie increases, and since it is clear that surfing the Internet is shifting to mobile telephones, and from studying the existing mCommerce market data their growth trends are already evident, then:
Clearly, whoever sells products on the Internet should at least consider the matter of mCommerce.
The mCommerce world can be divided into two main types of services: Simple services and complex services.
Simple services
Are those services that are supplied over the telephone platform, like any other platform, without taking advantage of its uniqueness (Mobile Browsing); for example, purchasing a product from an e-Commerce website by using a browser. These services are of course inevitable, but they do not generate change, they are not the Killer Application of your businesses online commerce.
Complex services
These are the services that exploit the uniqueness and advantages of the mobile platform:
- Location-based services, for example, an application that provides information on deals at shops in the vicinity.
- Services that take advantage of the mobility, for example, an application that enables payment by phone in the physical store.
- Services that enjoy the complete availability of the telephone owner, for example, stock trading services, where the importance of real-time is crucial for the actual trading.
As a rule, even if the simple services are indeed simple to apply, a business interested in creating substantial business value by using mCommerce, should better aim at one of the “complex” services.
When deciding on the business strategy for integrating into the mCommerce world, it is worthwhile knowing the latest trends, and the present situation in the different markets. Should the mCommerce policy of the business find a way to blend in with them, that would be perfect. The four trends that seem to be leading the filed of mCommerce one should be familiar with:
1.Location-based services
Knowing a person’s location opens a wide range of e-Commerce services that are irrelevant to a PC, for example:
- Business offers to the customer, from businesses that are in his vicinity, such as near-by deals, location-based advertising applications, and more
- The supply of different information services (in our case, against payment), to which location is relevant such as the weather forecast, location of near-by businesses (see for example the business model of the successful “Waze” or “Places” applications), and more.
- Navigation services
- and more
2.Mobile banking and mobile payments
Mobile financial services seem to be one of the increasingly growing market sectors in the field. These services include, among others, executing banking transactions in your account, trading stock, etc. This type of services is usually called M-Banking. In the same context one can mention various applications that enable payment by phone.
A quick glance at the Digital Banking Services page of Bank Leumi, for instance, is testimony to the scope and range of services provided in these areas today.
3.Online and offline integration
Applications that integrate the virtual world with the real world have repeatedly proven themselves in various circumstances (the children’s Webkinz application is an excellent example. Regardless, it is also and excellent example for clever e-Commerce, but that will be dealt with in another article…).
This type of integration has two significant advantages:
- It addresses a target audience that has not yet fully embraced the new technologies and still needs the exposure to conventional commerce, at a store or on a shelf.
- It opens a wide range of new possibilities for consumers in the physical stores, for example: comparing the price of the shelf product using the phone, examining relevant deals offered on the product through its barcode reading, etc.
4.Emerging markets
It is rather the world’s technologically undeveloped markets that have become most interesting for the mCommerce market. The reason is simple: it is a market into which the Internet has only just penetrated, and has skipped a whole technological generation, transitioning immediately into the present technologies. The African market, for example, whose scope of Internet penetration is marginal, is expected to embrace the surfing technologies and mobile applications. Penetration of the mCommerce world into these markets is expected to be massive.
The e-Commerce market is increasing annually. mCommerce is becoming a major player, if not the leading share holder of the e-Commerce pie. This trend is at its peak, and in a matter of years will be a sealed fact.
These trends are global. This trend is distinctly evident in Israel as well, one of the leading countries in the world for smartphones penetration and the number of application downloads per capita.
The bottom line is clear: Those who want to take advantage of e-Commerce to provide their business an additional revenue channel, will not be able to settle for the “traditional” e-Commerce channels, but will have to investigate the new, updated models in the field.
Worth a glance
Charts, data and statistics on the MobiThinking website
Gartner’s NewsRoom Press Release on the sales of smartphones worldwide.
Omri Tamir, VP Marketing & Business Development
November 2011