Mobile commerce isn’t the next big thing. There have been mobile commerce for a while. The implications of not adopting m-commerce should be understood by startups and business owners.
Globally, e-commerce generated $2.32 trillion in sales in 2019, representing 67.2% of all e-commerce sales. In 2021, the figure is expected to reach $3.56 trillion, or 72.9% of total e-commerce transactions.
A business owner would want to capitalize on m-commerce’s unstoppable growth or risk being swallowed by obsolescence. As a result of a major shift in retail trends, big brands have found themselves out-competed by newer companies.
M-Commerce: What Is It?
Mobile commerce is sometimes referred to as m-commerce. M-commerce involves the use of mobile devices for commercial purposes.
M-commerce is hardly a new trend or technology. Rather, it is an extension of e-commerce, which has been around for more than a decade. As users spend more time using mobile devices instead of computers, mobile commerce represents the natural progression of technology.
Various types of mobile commerce
Generally, mobile commerce can be divided into the following categories:
- Mobile Shopping
The goal of mobile shopping is to enable shopping experiences on mobile devices. It’s m-commerce in action when you shop on Shopify or subscribe to Netflix on your mobile device.
- Mobile Banking
There is no longer a need for the public to wait in line at banks or ATMs to make financial transactions. With mobile banking, users can pay bills, transfer money, and do many other transactions using their mobile phones.
- Digital wallets and mobile payments
With QR codes, NFC, and advancing mobile security, it has become possible to replace physical cash with mobile payments. Apple Pay and Google Pay dominate mobile payments in Western countries, while apps such as AliPay and WeChat dominate in China.
M-Commerce: Why It’s Growing So Fast
A growing number of people are accessing the internet through mobile devices. That is directly related to the growth of mobile commerce. Since smartphones have become more accessible and high-speed internet is no longer a premium infrastructure in many countries, users have swapped out their PCs for the smaller gadgets to browse the internet.
As a result, brands must adopt mobile commerce on top of existing e-commerce platforms to be where their customers are. Several retailers developed shopping apps that provided easy-to-navigate catalogs and hassle-free checkout processes.
Banks and payment providers are aware that consumers are inseparable from their mobile phones. In recent years, banks have introduced apps that enable mobile banking transactions.
In addition to changing how brick-and-mortar businesses operate, mobile commerce has also impacted how cashless payments are adopted. Digitalpayments were ushered into the limelight by technological giants.
Paypal and Amazon Pay are the most popular payment options in the US, with Apple Pay joining the fray in 2014. Even so, digital payment is not as widely adopted as it is in Europe and Asia.
There are three top contenders in Europe: Apple Pay, Samsung Pay, and Google Pay, all of which compete with providers that are dominant in their respective countries.
Several popular payment providers have dominated the mobile payment scene in China, including AliPay, WeChat, LinePay, and others.
As Business Insiders reports, mobile commerce’s growth in the US isn’t slowing down, with mobile transactions estimated to reach $284 billion by the end of 2020, or 45% of e-commerce.
Adobe, whose PDF and creative apps are known for generating Black Friday sales through mobile devices, reported a 31% increase in 2019.
By 2023, the mobile payments market is expected to reach $4,574 billion, which is a 33.8% increase over 2017. A rise in smartphone usage and a maturing mobile payment market are evident in the figure.
Global mobile digital advertising spending is expected to reach $240 billion by 2022 as everyone’s eyes are on smartphones.
Individuals are also likely to make purchases on their smartphones. OuterBox reports that 79% of smartphone users purchased something on their phones within the past six months.
M-Commerce: Its Benefits and Limitations
The pros and cons of mobile commerce are the same as those of any technology.
- Wide Audience
The number of smartphone users around the world is expected to reach 3.9 billion by 2021. Mobile users should inspire businesses to embrace m-commerce and make their products/services available on apps or mobile-optimized web stores.
- Improved user experience
Conversions on mobile are heavily influenced by the user experience. Fortunately, technological advances have made it possible to enhance the user experience on mobile devices.
Ikea’s augmented-reality-powered shopping app is a textbook example of making the most of mobile technology. The software allows users to visualize how their furniture will look by superimposing it to their living space.
- Availability of customer support
Businesses can support their customers during or after business hours with the help of chatbots and messenger apps. Increasing intelligence and intuitiveness have made customer support bots more efficient at dealing with common queries.
- A wide variety of payment methods
There are many options available to m-commerce customers when it comes to payment methods. A mobile store can accept any type of payment, including credit cards, PayPal, Skrill, and cryptocurrency.
The cost of developing an m-commerce app is significant. Among other functions, it involves the fundamentals of the app, security modules, databases, store designs, payment gateways, and other aspects that can be quite expensive.
- Geo-location preferences of payment gateways
Offering payment gateways that are popular in every country around the world would be overwhelming. Launching the app in different regions won’t be easy and it will limit the target audience.
Considering that more than half the world’s population owns a mobile phone, businesses couldn’t afford to shift to mobile commerce. It is far better to embrace mobile commerce than to avoid it. Depending on features, customization, and complexity, m-commerce store development costs vary.