Mobile Commerce: Trillion Dollar Opportunity
The worldwide retail market is gigantic. eMarketer estimates the total retail sales worldwide will reach $24 trillion in 2015. That’s 6.6% more than 2014, a very exciting growth.
As it is with most industries today, the retail is experiencing a major shift as a result of technology advancement as well as changing consumer behavior and demographics. This shift is the next big opportunity for mobile startups and entrepreneurs.
Just consider the fact that today over 2 billion of people carry a smartphone with them, practically all the time and then there are iPads and wearables.
Most importantly, people no longer associate their phone with making phone calls. They associate it with, web browsing, social media, making payments, sharing photos, etc.
E-commerce Now Represents a $1.6 Trillion Market
The e-commerce alone now represents a $1.6 trillion market, growing at an incredible 20.9% rate. And 20.9% represents over $330 billion a year, making it highly possible that e-commerce will become a $10+ trillion market over the next 10 years.
In other words, with trillion dollar revenues and double-digit growth, online retail is clearly one of the hottest markets to start your next app or business idea in.
While E-commerce Grows, M-commerce Takes Over
Why app idea? Well, the data show that mobile commerce (m-commerce) revenues grow way faster than already fast-growing E-commerce.
In the U.S. alone m-commerce is expected to grow from $54.6 million in 2014 to $96.3 million in 2016. Globally, across 22 major markets, it is expected to grow from roughly $102 billion in 2013 to roughly $291 billion in 2016, as data from GlobalWebIndex point out.
According to Anju Nayar, who is a senior director of global initiatives for PayPal “We are on the cusp of the mobile-first era. One thing is evident: Mobile shopping is on target for meteoric growth. Mobile commerce is growing at three times the rate of e-commerce.”
In the Game of M-commerce, Tablets are Winning
Mobile shopping is already huge. However, a better look at m-commerce data reveals it’s really the tablet users who represent the most promising demographic.
Here’s what a recent study from econsutancy.com says: “Let’s look at how this happens. Three people, all googling the same item. One uses a laptop, the second one a smartphone, and the third one, a tablet. Which one is most likely to end the search with a purchase Answer: the table user.”
Tablet users constitute a highly valuable customer segment, because they are most likely to convert, and they’re are also most frequent buyers.
According to Google, 72% of tablet owners make purchases from their devices on a weekly basis. And 55% of tablet shopping experiences are most likely to end with a purchase.
Of all tablets, iPads represent a huge percentage of the total m-commerce revenues. Although it varies from country to country, iPhones and iPads dominate over Android devices in most markets around the world.
Big Opportunity for the Next Wave of Mobile Apps
All this exciting growth naturally opens up new opportunities for mobile shopping and m-commerce related apps. According to PayPal, 64% of smartphone users reported using an app for purchases as opposed to the 52% who used mobile browsers.
The opportunities are countless. Among fastest-growing types of apps are on-demand marketplaces. Services like Uber and or Airbnb have revolutionized entire industries.
Then, there’s a massive growth in Social Commerce. For example, the top 500 retailers earned $3.3 billion from social shopping in 2014, up 26% from 2013, according to the Internet Retailer’s Social Media 500.
Then there are payments and loyalty apps representing another huge opportunity to tap into. Subscription commerce is another fast growing trend. As you may know the food startup, Blue Apron has just reached over $2 billion valuation, and Jessica Alba’s Honest Company is planning a 1.7 billion IPO.
But these are just a couple of examples of business models likely to thrive in the coming years. Most importantly, there are opportunities for many different apps and services supporting the fast-growing ecosystem. Clearly, this will be an exciting space to watch.
About The Author:
Mark McDonald is the Co-Founder and Co-CEO of Australia’s Leading App Development Company. Appster. With Offices in San Francisco, Melbourne and India, Appster is quickly becoming a World Wide leader in Mobile Application Development.