Mobile commerce or m-commerce is a blanket term used for the buying and selling of goods and services using hand-held devices like smartphones and tablets. Thanks to the dot com bubble, commerce moved into the virtual sphere. This resulted in the emergence of e-commerce or electronic commerce. With increased mobile penetration across all segments of the population, businesses are now going mobile in order to broaden their consumer base.
In 2015, the global m-commerce market stood at $291 billion. According to analysts at Technavio, the market will reach over $980 billion by 2020, recording an impressive CAGR of 27%.
Factors responsible for the popularity of m-commerce
Increased use of smartphones and mobile apps
Initially, smartphones were sold as a premium device available only to those who could afford them. That quickly changed when affordable smartphones became available and access to high-speed internet significantly increased, which also led to the development of mobile apps. Most businesses now have a mobile app of some sort. With the help of mobile ads placed on apps related to games, music, and m-commerce, vendors can now easily offer products that specifically match buyers’ needs and interests. By 2015, approximately 180 billion mobile apps were downloaded, which, according to market analysts, will increase to 350 billion by 2020.
Adoption of mobile wallets
A mobile wallet is a method through which mobile payments can be made. A mobile wallet stores customers’ credit card details and enables them to seamlessly pay for products using their smartphones. Not only is this method convenient, it also saves a lot of time. A mobile wallet makes online shopping easier and is a major contributor to the growth of the m-commerce market globally. Cashback and loyalty points for mobile wallet users have further fueled the success of m-commerce.
Ease of use
M-commerce is incredibly popular because it is simple and allows purchases to be made anytime and anywhere, giving it an advantage over desktop-dependent e-commerce. Also, mobile apps provide in-the-moment notifications about the latest launches, offers, and discounts. A recent survey found that in 2015, mobile device users across the globe spent more than 80% of their time on mobile apps.
The simplicty of m-commerce has also led to the launch of mobile apps in wearables. Apple Watch is planning to offer m-commerce apps for major vendors like eBay, Target, and Fandango.
Apart from the factors mentioned, mobile ads spending has increased as compared with web-based ads spending. This trend will continue throughout the next several years, supporting the growth of the global m-commerce market. Though it is too early to say whether the ecommerce market will eventually become obsolete, there is no denying that a major share of the market will be taken over by m-commerce.
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