Startup tip: Think mobile commerce
By Brennan Loh March 6, 2014
- M-commerce has opened up world of opportunities for consumers and merchants
- Retailers should leverage mobile to connect with shoppers and stay top-of-mind
SHORTLY before the start of 2013, numerous surveys had already begun speculating on e-commerce trends for the year. Online retailers were told to look into three key trends: Deliver a personal touch; curate their commerce; and integrate their business with mobile commerce.
How apt, particularly the third one, for Ericsson ConsumerLab revealed that smartphone penetration in Malaysia in 2013 stood at 63%, a 16% increase from the year before.
Echoing global trends, in which many researchers observed that a majority of Internet consumption is taking place on mobile devices, mobile commerce has opened up a world of opportunities not only for consumers but merchants as well.
This is a good insight for retailers now that mobile commerce is fast gaining momentum in Malaysia. In fact, the online shopping market in Malaysia is expected to grow at an accelerated pace, from RM842 million in 2011 to more than RM1.9 billion by 2016, further fuelling the importance for retailers to establish an online presence.
The significant growth of social media networks, particularly Facebook, in Malaysia has led to many international and local brands executing successful retailing campaigns.
That said, on a global level, the mobile commerce industry is expected to quadruple to US$31 billion in the next five years.
Fast forward to 2014
Given the insight, brick and mortar retailers should leverage opportunities in mobile commerce to connect with shoppers and stay top-of-mind in a hypercompetitive market.
This will help build their businesses and drive it to the next level. Keen entrepreneurs who want to turn a business idea into a viable business should look online and establish an e-commerce business with a focus on mobile commerce.
Let us look at two distinctive groups of modern shoppers – the consumer who shops from either a desktop computer or laptop; and the one who is a mobile on-the-go purchaser − and place them in this scenario: A busy mother in the midst of juggling household chores and work, with a baby in her arm, who has just received a marketing message on her smartphone about a baby product on offer.
The first shopper would have to place her baby in a cot, power up her computer, retrieve the web address from her smartphone and key it into her browser, manually select items and add them to her shopping cart, grab her wallet so that she could input her credit card details before being finally able to complete her purchase.
Her baby, in the meantime, could be crying for attention in the background.
The second shopper, on the other hand, would still have her baby in one arm, and with the other free arm, clicks on the promotional website from her smartphone, selects the items that she wishes to purchase, and completes the sale thanks to her credit card details already stored in her e-wallet.
Convenience aside, mobile commerce offers a completely different shopping experience. While in-store shopping is still leading in sales, many shoppers are reluctant to drive for long periods of time to a store to make a purchase, when they could have the same items delivered right to their doorsteps.
Statistics have shown that consumers actually save 78% more time shopping online than they do in-store.
This is no surprise at all, as travelling to and from stores takes up a significant amount of time, on top of the possibility of over-spending if one were to browse from one shop to another.
Future of mobile commerce
Consumers are lured by the many marketing strategies deployed by retailers; amongst them, location-based services that push discount codes for them to claim immediately when they step into a particular shopping centre.
This strategy is just one of the many marketing platforms that retailers can leverage to add value to shoppers, while drawing higher margin/ lower capital intensity for their business modules.
The rise of affiliate services and marketplaces targeted at the mobile channels help retailers promote their products, without incurring heavy set-up costs. eBay reportedly closes 50% of its sales on mobile devices, thus encouraging local shipping providers such as City-Link Express and Pos Malaysia to work around the clock to strengthen their delivery capacities.
Smartphones today come with either 3G or 4G (Third or Fourth Generation) abilities, and all of them connect to the Internet wirelessly, thus elevating mobile devices into a central part of our lives.
Consumers see them as a tool to help shop and pay, while retailers, especially startups, ought to capitalise on this emerging trend and embrace mobile commerce with zest!
Brennan Loh is head of business development at Shopify. He cofounded online advertising platform Avitu while still a student, joining Shopify towards the end of 2010. He remains active in the Canadian entrepreneurial community.
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