Asia leads the way as mobile transitions from research to purchase
Mobile’s impact on buying behaviour has been viewed with mixed feedback over the last year. Where 2014 began with conversations around ‘showrooming’, defined as the power to compare and research on-the-go, impacting the purchase funnel itself, the year is ending with some highpoints for mobile’s contribution towards sales. According to a recent study by Criteo, mobile now accounts for 30 per cent of global online retail sales and Asian countries are leading the pack. Criteo predicts that in 2015, mobile will cross 50 per cent of all transactions in Asia making it a screen of significance in the market.
Criteo’s ‘Q4 2014 State of Mobile Commerce Report’ highlights Asia’s potential for further growth in ecommerce transactions. “The consumer is far ahead of the industry in this. There has been significant lack of information about mobile commerce, leading many marketers to underestimate the opportunity. Our report provides clarity on the global market, by drawing on our pool of transaction-level data covering billions of transactions. The report demonstrates that mobile is now about purchasing not just researching, and that there are huge opportunities for ecommerce businesses to capture increasing sales via mobile devices, particularly in the retail and travel industries,” said Jonathan Wolf, Chief Product Officer at Criteo.
Jonathan Wolf, Criteo
In a conversation with DMA, Mr Wolf explained, “The opportunity is clear and present. Consumers are way past the point of the idea of purchase on mobile and the device itself has the potential to give ample comfort in security and user experience. Despite this, many retailers are still struggling to put together a decent, well optimised, efficient mobile site. In this business, where the margins are low, companies live or die on the efficiency of the site. The case is not too different for mobile. Mobile presence is critical not only to the future of businesses but in the present scenario itself.”
The lack of speed in retailers adapting to the right mobile experience is seen across markets, according to Mr Wolf. Some markets in Asia however have already broken shackles and are constantly upgrading to address this changing consumer behaviour. Japan and Korea are some such markets.
China, India Southeast Asia are some of the other markets, where the conversations around mobile commerce are gathering momentum. Where China is already considered amongst the digitally developed markets, in markets such as India the likes of Amazon are looking to create more awareness and promoting the app amongst consumers. However, India is known to leapfrog technology, and marketers can expect the conventional evolution of modern retail to make way for online purchases, where mobile will become a crucial growth driver.
“Countries such as Singapore are seeing higher share of mcommerce in comparison to some of the other SE Asia markets. I would say the trends in SE Asia are similar to what we are seeing in Brazil and Russia. The levels of internet penetration on these markets are growing fast but we are still not seeing a high level of mcommerce just yet,” Mr Wolf observed.
Some of the other key takeaways of the study include:
#1. Mobile is now about purchasing, not just researching: Global mobile conversion rates are high, across all devices and retail categories.
#2. Think Smartphones: smartphones now generate more transactions than tablets. Asia leads the way in smartphone purchases with close to 45 per cent of eCommerce transactions happening on smartphones, and very little tablet share.
#3. Mobile’s unstoppable growth potential in Asia: Japan and South Korea are advanced markets for mobile shopping with over 45 per cent of online retail transactions coming via mobile devices. In fact, Japanese ecommerce sites have mobile conversion rates that double the US, and in 2015, Asia is projected to generate more than 50 per cent of their ecommerce transactions from mobile.
#4. It’s not just Apple. Android phones generate over a third of smartphone transactions. This is true for the US and also for other countries. Android devices now account for 39 per cent and 44 per cent of smartphone transactions in the US for retail and travel purchases respectively. Android’s share of smartphone transactions is also greater than one-third in Japan (43 per cent for both retail and travel) and South Korea (86 per cent for retail, 74 per cent for travel).
#5. Top quartile US retailers generate almost 40 per cent of their ecommerce transactions from mobile, against 27 per cent for US overall. The bottom quartile see only 5-10 per cent of transactions from mobile. This represents a 4X difference in share of mobile transactions, demonstrating that retailers overlooking mobile are losing sales.
“Consumers are more comfortable than ever making purchases from mobile devices, which makes it increasingly vital for advertisers to effectively reach them across devices. If you’re an ecommerce player and you’re not focusing on allowing mobile audiences to purchase from you, then you may not be in business in a couple of years,” Mr Wolf summed up.
