The Shift to Mobile Commerce

One of the research projects I embarked on recently was studying e-commerce trends across 20 different markets. I tried to focus on markets where smartphone penetration was higher, including emerging markets. Besides China and India, which I can’t afford to not study due to the size of those markets, I also looked at markets in Brazil, Mexico, Thailand, Vietnam, and Indonesia, Philippines, and Turkey, to name a few. While each market exhibits some very interesting differences, perhaps the most striking differences are between the developed and the developing regions. First a global observation.

Below is a chart I created which is the total sum of each country’s responses to purchasing products online in the last 30 days via a specific device. This chart is a global representation.

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First, what you note on a global level is how the number of people saying they are purchasing products online via their PC actually declined between Q4 2013 and Q4 2014 on a global scale. To be precise, it declined 6.4% from Q4 2013 to Q4 2014. However, those indicating they have made a purchase via their smartphone in the past 30 days is growing on a globally. YoY mobile shopping increased 13% from Q4 2013 to Q4 2014. This leads me to believe we are seeing a clear trend from desktop commerce to mobile commerce.

Some markets are moving much faster than others. Interestingly, those in developed markets like the US, UK, and other parts of Europe have a much lower percentage of monthly mobile shoppers. Germany is the only developed market I surveyed which had more than 30% of respondents saying they made a purchase in the last 30 days from their smartphones. To put that into contrast with some of the emerging markets, let’s look at mobile shoppers in those regions.

This is the list of top developing regions, as a percent of those who said they made a purchase in the last 30 days (data as of Q4 2014).

India – 44%
China – 57.7%
Indonesia – 34%
Mexico – 32%
Brazil 35%
Vietnam 34.7%
Thailand – 31.3%

To show the growth of these regions, most of the countries above were under 20% of mobile-mostly shoppers as of Q4 2012. There were two markets which defied this trend overall. Both Japan and Russia declined each holiday quarter from 2012-2014 from a mobile shopping perspective.

When we dig into the qualitative analysis behind these stats, we learn many emerging market’s retail infrastructure is simply nowhere near as good as the developed worlds. Often, stores which contain trusted and quality goods are some distance away and it is simply more convenient to purchase certain things online. China is the market where the future of mobile commerce is exhibited. Not only do the majority of consumers there shop via mobile as opposed to via PC, but with convenient offers, price comparisons, reviews, more choice, and same day delivery in most areas are primary reasons. India is another market coming on heavy with mobile commerce for the same fundamental reasons as China. But essentially the data clearly shows a mobile preference in many of these markets. Convenience being a key driver, but also the reality that more people now own smartphones than do PCs, so the volume majority has shifted as well.

So what are the top products being purchased online? Some markets vary in terms of the ranking, but overall this top 10 list remains intact.

1. Clothes
2. Shoes
3. Books
4. A gift for someone
5. Mobile Phone (often 1 or 2 in emerging markets)
6. Snack Foods
7. Bottled Water or soft drinks
8. Chocolate
9. Travel
10. Packaged Food/Ready Meals

There are some slight nuances to this list if we dive into the things being purchased regularly via a mobile or a PC, but for the most part the above list is representative.

The last thing I want to highlight is perhaps one of the more interesting I have discovered. Emerging markets seem to be more security and privacy conscious when it comes to online shopping than developed markets. I charted responses here of a few countries.

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These were the countries that ranked online security and protecting customer privacy the highest in terms of the priority of the service when online shopping. As you can see, there is an early indication that emerging markets may be more sensitive and thus value higher security as a service solution than developed markets. In some cases this has to do with a region’s concerns/distrust of government, payment method, and perception of e-commerce fraud rates. One of my takeaways from this is how these markets may be more apt to use trusted vendors and global brands such as Paypal, AliPay, or other more established players. In China, Alibaba addresses this by guaranteeing payment and delivery if a customer uses AliPay. In markets where security concerns exist, I expect these tactics to be the norm.

From a forward looking standpoint, the categories I expect to heat up next, beyond the ones listed above, are groceries, home appliances, and home improvement. These categories, above all others, had a much higher sentiment to buy online in the future vs. in-store retail. Overall, I expect this shift to mobile commerce to continue. In developed markets, I believe we are at an inflection point when it comes to mobile and in many emerging markets I study, that inflection point has already happened.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

6 thoughts on “The Shift to Mobile Commerce”

  1. Thanks for another insightful article based on good analysis. Another factor possibly overlaying these issues in developing countries is a strong culture of cash on delivery. In several of the developing countries where I’ve lived and worked, particularly in sub-Saharan Africa and the Middle East, there is a lack of experience with, and therefor lack of trust of distance-purchasing with a credit card. This isn’t specific to e-commerce: there is no history of ordering from a catalog by phone as we and our parents did. And even large purchases such as cars are made in cash only.

  2. Wow, superb blog layout! How long have you been blogging
    for? you made blogging look easy. The overall look of your website is wonderful,
    as well as the content!

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