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Tipping Point

April 2015

M-Commerce in the UAE is gaining momentum with increasing number of shoppers using their mobile devices to make purchases online, writes Manickam Ravindran

Globally, mobile commerce is estimated to grow from roughly $102 billion in 2013 to around $291 billion in 2016, according to a survey report of PayPal, in association with the market research company Ipsos covering the e commerce habits of 17,600 consumers in 22 countries.

As per the survey, in the UAE, mobile shopping makes up for 24% of overall online spending closely followed by China at 21% and Turkey, at 19% respectively. In terms of smartphone shopping density, more than 68% of Chinese online consumers said they have used their mobile devices to make purchases on a smartphone in 2014. The number is only slightly lower for UAE shoppers, at 57%, and 53% for Turkish consumers. In the US, 31% of consumers report that they have used their smartphones to shop in the past 12 months.

Overall, a third of online shoppers surveyed by PayPal said they have used their smartphone for making an online purchase in the past 12 months. The increase in mobile shopping is being driven by smartphone shoppers in the age group of 18-34 (59% of smartphone shoppers in that age bracket reported using mobile to shop online).

Globally, 64% of smartphone users reported using an app for purchases as opposed to the 52% who used mobile browsers. The reasons cited for that are convenience and speed. Convenience was cited by 35% of users and speed by 30%. Instant payment confirmation and having a reminder in the app to use discounts or coupons were two other major reasons cited by those surveyed.

In terms of actual mobile shopping behaviour, 36% of consumers say they use mobile to get info on a product, 27% use mobile to find a business and 25% use devices to read reviews on particular stores or products. But 33% of the consumers surveyed reveal that in the future, they are interested in using their smartphones for more mobile-centric tasks.

Three of the top five players in the mobile commerce space is from Asia (China, Japan and Indonesia) and they account for $280 billion worth of turnover in 2014, according to the PayPal survey.

In North America, the US market generates billions worth of mobile retail sales, with its share on total online retail reaching over 15%. In Latin America, mobile shopping is on the rise, as mobile penetration grows and retailers introduce mobile apps with Mexico leading the pack followed by Brazil, the region’s largest retail market and Argentina. In Central Europe, Germany leads in penetration of smartphone/tablet owners who shop on mobile at least once a week with m-Commerce sales accounting for 10% of the total online retail sales in 2013.

In Western Europe, the UK leads by share of mobile retail on total B2C e-commerce sales, with sales from tablets growing faster than sales from smartphones. In France, over a quarter of online shoppers preferred to purchase from mobile in 2014, while in the Netherlands over 2 million people already engage in mobile shopping. In Eastern Europe, mobile shopping is capturing a growing share of the retail sales pie. In Asia-Pacific, South Korea sets the newest trends for global m-commerce, such as integration of mobile shopping into messaging platforms.

In Japan, a high double-digit share of mobile users shops via their devices. The number of mobile Internet users in China topped half a billion in 2013, with over a hundred million of them engaging in m-commerce.

Both in South Africa and in the UAE the share of Internet users shopping though mobile phones shows an uptrend. Mobile commerce has a high potential in the Middle East, as smartphone and tablet penetration is high, and mobile is often the most common mode of connection to the Internet in the region.

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