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mobile money

We might be buying less stuff but mobile commerce is still booming

Mobile commerce is booming. Currently worth around US$1.5-trillion, the global mcommerce market is expected to be valued at around US$3.2-trillion by 2017.

While that kind of growth might seem difficult to conceive of right now, it’s worth bearing in mind that the mcommerce space has still got a lot of room to grow in. The latest study by mobile entertainment body MEF for instance reveals that only around 65% of mobile media users globally have used their device to purchase goods or services.

At the moment, digital goods, spurred by the growth in freemium business models and in-app purchases still dominate this area of mobile content and commerce. However the research reveals a decline in the volume of purchases for the first time — from 54% of mobile media users in 2012 to 42% in 2013. Globally, there is a growing trend towards purchasing physical and perishable goods with 25% of users globally happy to shop on mobile for these items.

Mobile spend

The study also found that the number of actual purchases may be falling in volume, but the value of individual purchases is going up. High spend purchases (over US$151 or equivalent) jumped to 39% with low spend items (under US$15.99 or equivalent) at 37% dropping from 43% in 2012. The report suggests that ‘high spenders’ are most prolific in Nigeria, Mexico and Kenya reflecting the mobile-first ecosystems in these regions.

MEF also believes that this shift is coming about because of an increasingly rapid adoption of mobile 3.0 technologies. In order to understand what this means you have to think about the history of mcommerce. In mobile content and commerce’s first phase, consumers bought simple personalisation products such as ringtones and text-based alerts. Then they moved to downloadable apps. Now, they are
using their phones to perform online shopping while embracing a new breed of “super apps”.

These super apps are displacing one-off purchases — for music or video for example — with longer term subscription based services or apps and games offering months of immersive gameplay, typifying in-app purchase business models and long-term player engagement. This is not limited to developed markets; the report found a significant number of consumers in growth market regions are moving past the premium content phase and into a space defined by smartphones and apps.

However, Consumer Trust remains a significant barrier to increased adoption and purchasing behaviour and is a growing concern for consumers. In the 2013 Global Consumer Survey though, 40% of consumers cite trust as an issue compared with 35% in 2012 and 27% in 2011.

Barriers to purchase

Andrew Bud, MEF Global Chair said: “MEF’s 2013 annual study vividly illuminates the worldwide emergence of Mobile 3.0, the next phase in the evolution of mobile content and commerce. In Mobile 3.0, mobile has become the primary tool for engagement and transaction in consumers’ digital lives, creating exciting new opportunities and challenges. As an industry, we must continue to work to reduce the barriers to this growth, and especially to ensure trust and confidence in the ecosystem and its business models.”

The study, now in its third year, analyses both developed and growth markets namely Brazil, China, India, Indonesia, Kenya, Kingdom of Saudi Arabia, Mexico, Qatar, South Africa, UAE, UK and US.

Author | Stuart Thomas: Senior Reporter

Stuart Thomas: Senior Reporter
Stuart Thomas joined the Burn Media team in 2011 while finishing off an MA in South African Literature. Eager to prove his geek credentials, he allowed himself to be thrown in the deep and did his best stay afloat. When not fused with his keyboard, you can find him... More