Mobile Commerce Industry to Reach US$31 Billion by 2016 [STUDY]

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The explosive growth of mobile industry in last few years has triggered the applications war mainly between Apple and Google, lately joined by Microsoft. However, such progression seems to have miniscule impact on users for their mobile shopping experience. And, that’s why retailers should expect nothing more than 2% of their online sales through mobile devices this year which is expected to upsurge only 7% by 2016.

According to a Forrester study, Mobile commerce will settle down with $6 billion in 2011, growing with 40% year-on-year for next five years to reach $31 billion by 2016. This projects steep growth in M-commerce industry for next few years but will still remain a small fraction of overall sales. (The study has not covered sales portion from Tablets).

Worldwide mobile commerce industry 2013 - 2017

Despite of improvised smartphone adoption rate and burst to roll out new mobile payments, “mobile shopping” has not taken-off with full swing. Users are still reluctant to open up their pockets on mobile and are more contented from preëmptive usage which includes product information or price comparison – rather than actually completing a transaction.

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On the other side, retailers and advertisers are showing more confidence in mobile advertisement hoping a significant sales contribution from mobile streams. Mobile advertisement industry is expected to secure $1.6 billion as revenue in 2011 and upscale its performance to reach $20.6 billion by 2015.

Consequently, a big question arises here – Are merchants expecting “two layer” mobile commerce which doesn’t in-line marketing and sales in the single thread? Probably, the answer of this question is known to merchants and that’s why we are seeing a shift towards mobile optimization of business presence. However, the confusion still remains about the best way to approach the medium – the mobile web versus apps conundrum. While most retailers have not pursued apps, some inevitable advantages which is possible only through app version, like location-based service, are keeping mobile revenue away them.

“Unfortunately, such innovation is likely to drive paralysis in the retail industry as it explores which players to partner with to create this content and which use cases exhibit the most promise for shoppers and store associates,” states Forrester analyst Sucharita Mulpuru.

However, on positive notes, Reports also showcases the optimistic aspect. Constant growth in smartphone sector, diminishing concerns towards mobile transaction and improved mobile network has pep talked retailers towards optimizing their sites for mobile – if not a mobile app version – and retailers have opted some mobile strategy in place.

Among the steps the report recommends is outsourcing tasks such as mobile optimization, since any in-house IT team will have its hands full dealing with desktop traffic. It also suggests developing a mobile search strategy with more and more searches being conducted on phones. That means creating mobile-tailored landing pages for key mobile search terms that are relevant to a business.

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In such scenarios, most efficient and smart retailer who will shift the exploration, buying and payment efforts smartly on consumer will enjoy the maximum benefits and perks.

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