Mobile Communications

Dr KF Lai (Global) - Growing Mobile Ecosystem Paves the Way for M-Commerce Offerings

The growth of the mobile internet in 2011 has been nothing short of explosive. The BuzzCity ad network alone delivered over 126 billion ads in 2011 – almost two-and-a-half times more than 2010.

In that time, a plethora of commerce and payment platforms have emerged. Banks, carriers, payment providers, peer-to-peer transfer companies, virtual currency platforms and many others are now competing for customers. However some brands who have attempted m-commerce in its early stages have failed with strong consumer concerns over security.  So what do brands need to be aware of when venturing into mobile commerce?

Demographics are changing…

As we know there has been a massive spike in smartphone adoption in the past year and the boom in mobile web usage is attributed largely to younger males, although female adoption continues to grow in many countries. According to our recent report there are nearly as many women as men using the mobile web in the United Kingdom (49%), Thailand (43%) and South Africa (40%). These markets are followed by France, Germany, Mexico, Philippines, the United States and Saudi Arabia, where at least a third of mobile web users are female.

While under-20s still make up a large share (28%) of mobile internet users, the proportion of mature users across the globe is growing (15% are now over 35). This is particularly true in France, Germany, Malaysia, Poland, South Africa, the United Kingdom and the United States where over-35s make up over 20% of each market. Poland, in particular, has a high representation (41%) of users over 35. Moreover, the influence of more mature users is disproportionately high when mobile purchases are made. Over-35s made 19% of travel-related purchases, 23% of grocery purchases and 21% of household utility payments globally in the past six months. In France, although over-35s make up only 30% of mobile web users, they account for 67% of the mobile purchases for gadgets.

This group of users is also most likely to be a catalyst for mainstream adoption of m-commerce, as their intent towards repeat purchases is disproportionately high. They’re most likely to drive m-commerce in the areas of travel, gadgets, groceries and prepaid utilities in many markets. In the UK, for example, over-35s make up only 23% of mobile web users, yet they account for a third of those who plan to buy gadgets in future.

What are they buying?

Services to stay connected, for example payments for phone credits are high in countries where the mobile is the primary point of access to the internet – Kenya (88%), Indonesia (85%) and Vietnam (87%). While entertainment and lifestyle items such as books, music and movies for home delivery as well as gadgets are all regularly purchased items, notable are Nigeria (31%), India (28%), UK (20%) and US (14%) all avidly buying these via their phones.  In the travel market consumers are keen to use their handsets to buy tickets and source hotel accommodation with growing usage in Saudi Arabia (21%), France (13%), Germany (11%), India (14%), South Africa (11%) and UK (10%).

But more importantly the three sectors in which we expect immediate uptake are gadgets, physical media and travel. The uptake of mobile shopping in the immediate future seems positive particularly in areas such as France and the UK where users are expected to repeat purchases they have already made.

All the signs are very encouraging…

So you’d be forgiven for thinking that everyone with a mobile would be interested in making their lives easier when it comes to paying for these goods via their phones? Actually users remain reluctant to engage in remote transactions, with 39% preferring to pay in person, and 21% preferring to charge purchases to their phone network bills. The reason behind this is more consumers perceive m-commerce to be complicated and risky despite the wider choice now available. The biggest barrier to mobile commerce is the lack of awareness of the tools and services available (35%), our latest survey reveals that 35% of users aren’t aware of the basic mobile transactions available. Those who are aware of these commercial platforms find the services “too complicated” (21%), or are worried about security (27%).

Where next?

With more consumers gaining trust in mobile and brands taking advantage of spending power maturity the entire mobile ecosystem will benefit in coming months, ultimately paving the way for further demand for mobile and lifestyle content as well as mobile commerce offerings. If the industry clarifies their communications, reassures users about their security concerns, and overcomes the confusion then 2012 looks set to be an exciting year.

By Dr KF Lai, CEO, BuzzCity


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