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Shopping On-the-Go

Buying apparel online is the most popular category for shopping on mobile devices  

Buying apparel online
is the most popular category for shopping on mobile devices

 
Now that e-Commerce has firmly established itself as part of the retail landscape, the next frontier – mobile commerce  – is fast-gaining ground. According to a new Nielsen survey commissioned by PayPal, Hong Kong’s mobile commerce market saw phenomenal growth from HK$1.5 billion in 2011 to HK$6.4 billion in 2012, representing more than a 444 per cent jump in one year.

The quick rise of mobile commerce in Hong Kong is fueled by the fact that “consumers now have a store in their pocket,” said Kerry Wong, Managing Director, PayPal Hong Kong, Korea and Taiwan. “With a 62 per cent smartphone penetration rate, Hong Kong is one of the most mobile-centric markets in the world, which clearly explains why mobile commerce is exploding here.”

The survey, conducted in August involving 1,003 respondents, found that mobile shopping represented 41 per cent of the total online shopping market in 2012, compared to just 10 per cent in the same period last year. The number of consumers who purchased through a mobile device nearly tripled in size from just 376,000 last year to 1.1 million in 2012.

As a result, mobile retail is “at an inflection point,” said Ms Wong. “Retailers must truly embrace mobile if they want to meet consumer demand and tap into this growing HK$6.4 billion market.”

Apparel is the biggest category for purchasing on the go, while buying airline tickets as well as food and groceries are also fast-growing sectors, as people seek greater convenience.

Call to Action

  Coffee retail chain Pacific Coffee Company developed a iPhone app to allow customers to pay for item
 

Coffee retail chain Pacific Coffee Company developed an iPhone
app to allow customers to pay for items by scanning a QR code at
the counter

What does this mean for small and mid-sized retailers? “They have to get savvier by looking for multi-channel distributions, meaning online, offline, even converging the experience for consumers,” Ms Wong said. In a world where there are many different ways to reach consumers, retailers now are competing not just with domestic merchants but with overseas vendors.

“The call to action is if you want to reach your mobile consumers, you really need to look at how you engage a user experience that encourages your consumers to check out with you, whether they are shopping in your retail space, using a mobile device, or whether they’re coming to you online,” Ms Wong said. That means, experts say, businesses considering having a presence in both mobile apps and mobile sites.

“Some of the retailers are more innovative in adapting sites to mobile devices,” said Wee Hang Cheng, Director, Nielsen Survey. “But we also see that some merchants are not there yet. There’s a lot more opportunity for smaller companies to adapt to a multi-device platform to give their customers a good shopping experience,” he said.

Retailers Respond

A number of Hong Kong companies have started taking advantage of mobile technology to attract a wider audience. Electronics online retailer DealExtreme, for example, launched its own app to allow mobile users to view the latest featured gadgets and receive notification of new arrivals. Photo-finishing chain Fotomax’s mobile printing app, meanwhile, allows customers to order prints online without having to physically go to the shop until pick-up time. Another, coffee retail chain Pacific Coffee Company, launched its iPhone app last year to allow customers to pay for items by scanning a QR code at the counter.

Understanding Consumer Behaviour

Kerry Wong  

Retailers cannot afford to ignore the growing trend of mobile shopping, says Kerry Wong, Managing Director, PayPal, Hong Kong, Korea and Taiwan

 
But companies, big and small, are struggling to keep up with the constantly evolving consumer technology landscape, according to US mobile solutions company 5th Finger. The key, it says, is understanding how consumers are using their smartphones.

Consumers often use mobile devices for research before they go to a retailer’s physical store, which makes providing the right information on your mobile site crucial.

Local consumers’ love of smartphones is also stretching to tablets.“Clearly smartphones are leading in terms of the way that people like to check up, but tablets are not that far behind,” Ms Wong said.

The Nielsen survey found that tablet usage tends to spike at night and on weekends, while more high-value purchases, such as airline tickets, are made on tablets. Smartphones, on the other hand, are used throughout the day to make smaller purchases, such as movie tickets.

Ms Wong advises businesses to make sure that their online sites are optimised for various devices to ensure good user experience.

One way smartphones are blurring the lines between online and offline space is through QR codes. Seven out of 10 respondents said they were aware of QR codes, with half saying they used QR codes not just for information, but to make purchases and for discounts. Easy access to product information and download offers are cited as one reason for its rising popularity.

QR codes are also seen as a secure way to access data and sending payments. Indeed, security issues, including payment methods is one challenge facing retailers that want to attract greater mobile traffic. Another challenge is making the site easy to navigate to accommodate the limited screen size of mobile devices.

Future Growth

With the growing number of ways consumers are using mobile technology to shop, PayPal expects the value of mobile commerce to keep rising in the next few years, topping HK$17.8 billion by 2015.

For PayPal alone, Ms Wong says the company expects to process US$10 billion in mobile payment volume in 2012. “The message for retailers is if you’re serious about online shopping, mobile commerce is something that you can’t ignore.”

Related Link
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