MALAYSIAN enterprises with online web presence are not prepared to take advantage of the burgeoning mobile commerce (m-commerce) transactions in Malaysia, and will have to re-think their long term strategy or risk losing out in business opportunities, according to PayPal.
Yesterday, the online payment provider released a report which stated that m-commerce spending in Malaysia has quadrupled from RM101 million (US$31.7mil) in 2010 to RM467 million (US$146.6mil) in 2011. Comparatively, regular [non-mobile] electronic commerce only grew 9%, from 1.8 billion in 2010 to 1.97 billion in 2011. PayPal also forecasted that this trend will be set to continue reaching RM3.43 billion (US$1.08 bil) by 2015.
Rahul Shinghal, director of PayPal Mobile Asia Pacific, noted that there are three main drivers for this phenomenal growth in Malaysia.
The first, he said, was because Malaysia has one of the highest smartphone penetration in the world. Citing a recent study by market analyst GfK -- which noted that Malaysia has sold over 4.4 million smartphones in 2011 -- Shinghal said this is one of the main reasons for the increase in m-commerce transaction in Malaysia.
The second reason has to do with a change in behavior of those owning smartphones, many of whom are between the ages of 18 and 24. Many in this demographic have abandoned the use of fixed lines, and to a lesser extent, the fixed [desktop-bound] Internet to access the Net, Shinghal (pic) noted.
"Thirdly, there is a convergence between offline and online activity," Shinghal told the media yesterday (June 14). "In the past, people interested in buying say an electrical appliance would do their research and reviews on the fixed Internet before going off to the physical store and buying the item.
"Today, people walk into stores and while browsing there, they are checking out reviews and making the decisions to buy items, there and then, with their smartphones.
"This whole convergence between an offline and online world, where the phone becomes a companion for them while they are shopping -- not just for searching but for price comparison and for removing price arbitrage -- and buying on the spot, is another key trend driving m-commerce."
Majority no mobile web
While the PayPal study reveals a healthy growth in m-commerce transactions in the country, Shinghal also revealed another statistic that is odd, and almost seems counterintuitive to companies that have an online presence.
According to Shinghal, 79% of Malaysian companies do not have mobile friendly websites. Mobile friendly websites are defined as websites that are optimized for smaller screens, such as for Apple's iPhone of Samsung's Galaxy range of smartphones.
Such sites remove the need for a user to fumble with pinch and zoom functions in order to view these websites, and the look and feel of these sites are more akin to how apps are displayed on smartphones.
Shinghal revealed that 42% of those surveyed felt that having too small a screen size acts as a barrier to greater adoption of mobile commerce, compared with 36% who felt that security was a deterring factor.
He also revealed that 29% of smartphone users use their device for price comparison or mining of product info when shopping, and about that same amount of people change their minds as to where they purchase their items as a result of retreiving info via smartphone.
All this means that companies -- especially retail-based ones -- which do not have mobile optimized websites, are missing out on huge opportunities to not only retain their current customer base, but it also makes it difficult for them to capture new customers, Shinghal said.
Asked what retail companies should do about this, Shinghal said they would need to quickly establish mobile optimized websites or build smartphone apps that will display their wares to customers in the most friendly of ways so that they can capitalize on this growing trend.
"Companies such as Maxis have done this very well with their Maxis Movies app that's available on the iPhone App Store," he said. "The buying experience is very good on the smartphone and together with PayPal's mobile optimized payment gateway, this app is one of the best I've seen."
M-Commerce spending in Malaysia quadrupled: PayPal