How to avoid the hidden pitfalls of m-commerce
Online shopping is booming in Asia, with no signs of slowing down. Digital commerce revenue in Southeast Asia alone is expected to grow by a 10-year CAGR of 32% by 2025 to US$88 billion. With the digital commerce market expected to skyrocket, Gartner reports that by 2020, mobile commerce (m-commerce) revenue (for both apps and mobile web) will exceed 50% of global digital commerce revenue, highlighting the importance of m-commerce and the crucial role it plays in the rise of digital commerce.
As merchants focus more intently on growth through digital, they also need to acknowledge and master the accompanying payments challenges. Payment acceptance sits at the heart of all digital commerce, but especially m-commerce. Payments are vital to the shopping experience, to checkout conversion rates, and to the broader operational and financial infrastructure of a business.
The acceleration of mobile commerce
Technologically and structurally sophisticated merchants with online and multi-channel retail avenues are leading the m-commerce charge, as they are best equipped in terms of resources and platforms to capitalize on its growth.
Another key advantage attracting merchants to m-commerce is its ability to deliver a highly personalized and seamless customer experience – and rising smartphone penetration is a key driver of this trend. A recent ACI whitepaper, Fast-Track Merchant Growth Paths in eCommerce, noted that there are 8.6 billion mobile devices in the world, which translates to 1.2 devices per person. Nearly 80% of mobile users in developed markets are now using a smartphone, and analysts expect that 70% of the world’s population will have a smartphone by 2020.
In the Asian market, there was a smartphone subscription penetration rate of 112% in 2016, higher than the global penetration rate of 101%. Given the technological sophistication and capabilities of modern smartphones, many in the region find that they no longer need the PCs that drove the first e-commerce revolution.
The aforementioned ACI whitepaper also revealed that despite only registering a single digit contribution to overall e-commerce in 2010, m-commerce now accounts for more than 50% of e-commerce in the U.K and China, with the trend set to continue across the rest of the world. It is clearly evident that customers are shifting to shopping on mobile devices, so it is strategically critical for businesses to focus on optimizing the mobile experience.
Speedbumps ahead for m-commerce
Many merchants fall into the trap of thinking that PC-based e-commerce is identical to m-commerce, and do not properly translate the customer experience. One of the most basic steps is making their mobile platforms responsive, which many merchants are realizing, but this just the start. However, while the mobile form factor can be a challenge, it also presents an opportunity.