Market Leaders Make mCommerce Billions While Many Still Struggle With Basic Strategy

2011 report: M-commerce in Europe was predicted to outpace that of the US by the end of 2010 although retailers report that mobile browsers today generate a little less than 3 percent of overall site traffic and just 2 percent of revenue.

  • Gartner predict in 3 years time more people will access web from mobile than PC
  • Already in the UK, mobile devices are used for more Google searches: than the entire searches done on Bing.
  • In September 2009 0.02% of traffic to websites in the UK was from mobile devices, by January 2011 8.08% of traffic was from mobile devices. If this trend continues by June 2011 mobile devices will account for 14.75% of traffic.
  • On ebay alone consumers globally bought and sold over US$2billion worth of merchandise in 2010. This is up from $600 million in 2009 and according to Steve Yankovich, vice president mobile at eBay, this $2 billion in gross merchandise volume is derived 78% via its numerous mobile apps and 22 % via mobile web.
  • Amazon took US$1billion globally from mobile sales last year, and Google alone made US$1bn in annual mobile ad revenues.
  • Mobile retail will exceed US$12 billion by 2014 (mobile retail is defined as m-coupon redemption values, smart poster fees and advertising expenditure). M-coupons will dominate mobile retail marketing spend until 2013 according to Juniper Research.
  • It is predicted that more than 1 in 10 mobile subscribers will use m-ticketing in 2014. Services are developing fastest in the transport sector, particularly rail and metro companies and airlines, but m-ticketing is also used in concerts and movies.
  • Airlines increasingly offer not only mobile boarding passes, but ticket booking and payment as well. But lack of standards has led to multiple ticket scheme environments which could impede growth.

The Market

The iPhone has been the default choice for the last 2 or 3 years as the first platform to cover, and is still the big user base. In fact iphone traffic currently makes up more than half of all mobile traffic and accounts for 4.5% of all UK website traffic.

In Jan 2011 55% of traffic originating from mobile was using iPhone with apple in general account for 70% of mobile traffic, Android was responsible for 11% of traffic, Blackberry 6% and Other devices 13%

But in the last 3 months there are signs that the market is changing – the growth in the Android platform is huge, and the connection rate of new Androids is now much higher then iPhones.

Total shipments of smartphones in 2010 were 302.6 million units up 74.4 percent from 2009.

This makes smartphones 21.8 percent of all handsets shipped. Of course the rise in number of smartphones purchased is not the only driver. Continued advances in in how video and audio is compressed over WiFi and 3G, technological improvements in the stability of networks and the overall level of immersive content all contribute to increasing online mobile use.

Android, being open source, also means the hardware vendors can look right into the code, so when struggling to get the latest hardware chips to work, their engineers can troubleshoot immediately and get things working quickly. That makes for faster time to market. So compared to Apple’s hardware: which is only being improved by one company – there are many hardware companies all improving mobile hardware for Android users.

Currently the most popular activities on the mobile web are: mobile search, reading news and sports information, downloading music and videos, and email and instant messages. So far, so standard, but in future activities are expected to be money transfer; location-based services with m-health and m-payment being key drivers, surely these are no longer the kinds of service that can be tied up in a branded monopoly?

Even in developed nations (where smartphone penetration is higher), more people use mobile Web than mobile apps. Very few use either mobile apps or mobile Web exclusively. Only 6 percent of app users in the US and 7 percent in Europe don’t use their browser. While 8 percent of browser users in the US and Europe don’t use apps.

The lesson of the Internet – is that when technology standards are available, it allows much faster adoption: so building new mobile sites once-for-all on HTML5 is a huge advantage compared to going the App route where you need to develop for one purpose 2 or 3 different Apps to cater for the differing handset platforms such a waste of tech resources.

The mCommerce world is still relatively young and it will be an interesting journey for all of us to see where we are in a year’s time.

We know that different thinking is needed by companies, when planning and launching new mobile websites, or mobile apps to that of the fixed web, so the question is: where to start?

Considerations

  • Small screen real estate forces a good discipline of being focused on ‘what do the users want to do’. User centred design is paramount for mCommerce and Multichannel strategies.
  • The need for speed in content delivery is of much greater concern on mobile platforms. Although page and journey delivery speed is important to a desktop user, it is much more vital to a mobile one who is often using the device at specific location and wanting instant access.
  • Mobile Web design is in many ways more complicated than desktop Web design and a “one size fits all” approach is not going to produce the required results. Higher levels of interdepartmental collaboration will be needed in development
  • All monitoring and reporting should be based on the money-making ‘do what the users do’ routes through the site so that the business, marketing and technical teams can all speak the same common language of user experience.
  • What are the costs, ROI, strategic implications and timescales for necessary infrastructure development?
  • A major challenge to m-Commerce is the current lack of platform standards, how will you future proof your offering?
  • Use independent testers experienced in accessibility testing and do not rely on automated test software or services

Read Full Report

In mature markets, such as Western Europe and Japan, approximately 60 percent of handsets shipped next year will be smartphones with sophisticated browsing capabilities. In those mature markets, the mobile Web, along with associated Web adaptation tools, will be a leading technology for business to consumer (B2C) mobile applications through 2012, and should be part of every organization’s B2C technology portfolio.

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