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What Is MCommerce? Understanding Retail’s Next Seismic Shift

Subharun Mukherjee 18+ years of experience leading product strategy, Go-To-Market (GTM), new market entry, value-based sales, analyst relations, and customer experience programs. Expertise in Financial Services, eCommerce, on-demand services, and the SaaS industry.
What Is MCommerce? Understanding Retail’s Next Seismic Shift

The retail landscape is constantly changing — and it went through a particularly dramatic transformation during the pandemic. Ten years of ecommerce growth was scrunched into a matter of months as people were forced to avoid person-to-person contact, thus embracing shopping online and using contactless payments. 
And of course, even without such drastic change, brands are always looking for ways to stay ahead of the curve. And as mobile commerce continues to expand and even supplant ecommerce (through a web browser on a computer) it’s certainly moved beyond the point of being retail’s “next big thing.” In fact, more than 3 billion people around the world now use smartphones to go online every day.* Mcommerce has indeed arrived, and it’s here to stay.
So what exactly is mcommerce? And how can your brand deliver the kind of mcommerce experience that’s required to succeed in 2022 and beyond? 
This article covers all the basics you need to know to understand the current state of retail is headed, including mcommerce definitions, pros and cons, stats, trends, and more. And don’t miss the infographic summarizing mcommerce 101 at the bottom of the post. 

What is Mcommerce? Mobile Commerce Definition 

Mcommerce, or m-commerce, stands for (you guessed it) mobile commerce. The term ecompasses all commercial transactions that are completed using a mobile device like a smartphone or tablet, including retail purchases, online banking, and mobile payments. 
The term “mobile commerce” was coined by Kevin Duffey at the very first Global Mobile Commerce Forum all the way back in 1997.* That’s the same year that the first book in the Harry Potter series was published. Buffy the Vampire Slayer premiered on the WB! 
So while mcommerce has certainly taken off, especially the past couple of years, the concept has been around for nearly a quarter of a century. And it’s grown to encompass industries like mobile ticketing, mobile vouchers/coupons/loyalty cards, mobile content delivery, mobile brokerage services, mobile auctions, location-based services, and more. 

Just How Ubiquitous is Mobile in Our Lives?

A survey by Asurion in 2019* produced some eye-opening results. Three years later, these stats probably haven’t changed much. Or if they have, they would probably show that people are more reliant on their smartphones than ever. Survey results showed that:

  • The average person taps their cellphone once every 10 minutes. 
  • 1 in 5 people would rather go without shoes for a week than take a break from their phone.
  • Withdrawal symptoms—including increased blood pressure and heart rate—when someone is separated from their mobile phones is not uncommon.

What is the difference between mcommerce and ecommerce?

When it comes to defining mcommerce vs ecommerce, let’s keep it simple. Ecommerce covers all forms of selling and buying online. Mcommerce is a subset of ecommerce that’s specific to mobile devices like a smartphone or tablet.

Breaking down the main types of Mcommerce

What are the types of mcommerce? Broadly, mobile commerce involves any type of monetary transaction completed via a mobile device. But that covers a lot of ground. 
Most commonly, mcommerce refers to these three main categories: 

  • Mobile Shopping
    App commerce, social commerce, location-based marketing, digital content purchases, electronic ticketing, and more
  • Mobile Banking
    Mobile money transfers, account management, and bill payments
  • Mobile Payments
    Peer-to-peer transactions, contactless payments, and in-app payments

To clarify what mcommerce looks like out in the wild, here are a few mcommerce examples. When you think mcommerce companies, think digital marketplaces like Amazon or Flipkart, retail apps like Starbucks or Nordstrom, mobile banking apps like Capital One, and mobile payments services like Square and Apple Pay. 
types of mcommerce

Mcommerce Advantages and Disadvantages 

It’s no secret that the world has gone mobile, and mcommerce has fundamentally changed how brands interact with consumers. Just think: your customers can reach into their pockets and buy nearly anything they can imagine in just a few taps. 
But like any change, there are both benefits and challenges. 

Advantages of mcommerce 

  • Ability to reach more consumers. With mcommerce, there’s no limit to your potential audience. People can access your shop from anywhere just by downloading the app or browsing the mobile web. 
  • COVID considerations. The COVID-19 pandemic has had a major impact on consumer shopping behaviors. Because mobile is contactless, it’s paving the way in a world where more people are concerned about safety and hygiene. 
  • Faster customer journey. Things like mobile and voice search, social commerce, and one-click ordering make it easier and faster than ever for people to find and purchase your products. 
  • New and useful technologies. Apps allow for helpful features like augmented reality, which allows consumers to virtually try out your products; chatbots that provide instant customer service; and real-time inventory that enables people to view products available nearby. 
  • Greater convenience for customers. Mobile puts the world of retail at consumers’ fingertips. They get access to a wider variety of products and services, the convenience of shopping anywhere and anytime, easy access to customer support, plus the ability to compare products and prices between retailers. 
  • More effective engagement. Instead of fighting for your customer’s attention via saturated channels like social and email, you can send a push notification, SMS, or in-app message. Customers expect a full omnichannel experience, and mobile allows brands to deliver. 
  • A fully personalized shopping experience. Data-driven campaigns make it possible to create uniquely customized experiences for each and every user, from personalized product recommendations and discounts to geotargeting campaigns
  • Localization. Through mcommerce, brands can reach buyers at the ideal time, through geotracking, which helps them to identify shoppers who may be in the midst of making a purchase decision. The brand can then reach out, improving the chances that the user will complete the transaction. 
  • Access to convenient and secure payments. Options like mobile wallets, one-click ordering, and installation payments make it easy and safe for customers to transact. 

    Mcommerce challenges to overcome 

    • Legal compliance can get complicated. Depending on which geographies you make your app or store available in, you’ll need to understand and comply with more tax laws and regulations for all the locations you sell and ship to. Not to mention user data and privacy regulations like GDPR  and any new data privacy mandates with which you’ll need to fully comply.  
    • Security and privacy are still top-of-mind. Consumers don’t always trust mobile apps to be responsible with their private data, or to keep their payment information 100% secure. Earning and keeping that trust isn’t easy. 
    • Integrations with payment solutions. Consumers expect convenient and secure payment options, many of which involve integrations with mobile wallets. 
    • Need for a fully optimized mobile app or site. Last but most certainly not least, consumers have high expectations for the mobile experience. Laggy load times, bugs or crashes, spammy or poorly-timed messaging, a glitchy mobile checkout experience — you simply can’t afford any of these mistakes. 
    • Accessibility issues in more rural areas. Remote regions often do not have internet coverage that is as vast or as fast as those in more urban areas. This obviously creates a challenge for an mcommerce app seeking to serve more remote, less connected customers.

    In short, there are a number of convincing advantages of mcommerce — if you’re willing to put in the effort to develop and maintain a high-quality mobile experience. The costs of a poor mobile experience are just too high: people who have a negative experience on mobile are over 60% less likely to purchase from that brand in the future.* 

    40+ Mcommerce Stats for 2022

    Mobile Commerce: A Global Snapshot

    1. New app downloads in 2021 numbered 230 billion which is a 5% year-over-year growth – and a whopping 435,000 app downloads per minute. (*
    2. App store spending totalled $170 billion in 2021, a 19% year-over-year growth – and $320,000 spent per minute. (*
    3. Daily time spent on apps was 4.8 hours per user, a 30% increase from the previous year. Surpassing this mark, users in Brazil, Indonesia and South Korea spent 5 hours per day in mobile apps in 2021. (*
    4. There were 233 apps with a spend greater than $100 million, a 20% year-over-year growth rate. Compare this to only 38 movies which topped this amount in global box office proceeds. (*
    5. 46% of retailers plan to spend more time on their custom mobile app in 2022. (Shopify)*
    6. Seven of every ten minutes on mobile was spent in social and photo and video apps (e.g. YouTube and TikTok) in 2021. (*
    7. TikTok — the most-downloaded app in Apple’s App Store, with almost 85 million users — triggers users to spend $50.4 million every year. (Shopify)*
    8. Mobile ad spending totaled $295 billion, a 23% increase. (*
    9. Emerging markets dominate for downloads growth, with India seeing standout downloads. Pakistan, Peru, Philippines, Vietnam, Indonesia and Egypt were among the fastest growing markets for downloads at 25%, 25%, 25%, 20% 15% and 15% growth YoY, respectively. (*
    10. The total number of apps and games ever released on iOS and Google Play was over 21 million, with Google Play accounting for 77% of all apps and games released in 2021.  (*
    11. Across both iOS and Google Play, games represented 15% of all new releases in 2021. The remaining 85% of new apps span all categories of the app stores, from mobile-first movers like social to mobile-forced industries like insurance and healthcare. (*
    12. In 2022, some 6.9% of all retail transactions are expected to take place through a mobile device. (Shopify)*
    13. Globally, the market size for mobile wallets is poised to surpass $700 million by 2027, with Asia Pacific anticipated to generate nearly $400 million of that revenue, according to a new research report by Global Market Insights Inc. (GM Insights)*

    Mobile Commerce – US Trends

    1. US volume is poised to increase from $128.4 billion in 2019 to $553.28 billion through 2024.(Business Insider)*
    2. Mcommerce sales in the US totalled $359 billion in 2021 and comprised 38.5% of all ecommerce sales (Business Insider)*
    3. By 2025, mcommerce sales are predicted to reach a value of $728 billion and account for 442% of retail ecommerce sales. (Business Insider)*
    4. Smartphones have become the driving force behind mcommerce growth. US volume is poised to increase from $128.4 billion in 2019 to $553.28 billion through 2024.(Business Insider)*
    5. Tablets are also massively contributing to the success of mcommerce. Researchers expect $64.06 billion to be spent on tablets in 2022.(Business Insider)*
    6. About 77% of American consumers use their mobile phones in stores to compare prices. (Emizentech)* 
    7. One-third of consumers’ purchasing decisions are influenced by product research on mobile devices. (Emizentech)*
    8. The average American watched 3.1 hours of TV a day, whereas they spent 4.1 hours on their mobile device in 2021. (*
    9. Today, 15% of US adults are mobile-only, meaning a smartphone is the only device they use. (Shopify)*
    10. The US has seen phenomenal growth in consumer spend, adding an additional $43 billion in 2021, $10.4 billion more than 2020, equating to 30% growth YoY as mobile gaming and in-app subscriptions go mainstream. (*
    11. Gen Z’s most-used apps included Instagram, TikTok, Snapchat and Netflix. Millennials preferred Facebook, Messenger, Amazon and WhatsApp. Gen X (which has been lumped into the Baby Boomer demographic), used The Weather Channel, Amazon Alexa, NewsBreak and Ring.(*

    Mobile App Shopping Habits

    1. 67% of consumers will download a merchant app. (Emizentech)*
    2. 77% of US consumers use their device stores to compare prices. (Emizentech)*
    3. 71% of in-store-purchasing consumers who use smartphones in online research say that their device is very important to their store knowledge. (Emizentech)*
    4. Mobile drew the largest number of new ecommerce users at 62%, and mobile generated the highest percentage of returning visitors, at 69%. (Dynamic Yield)*
    5. Even though 67% of customers ‘window-shopping’ online claim to be just having fun, 77% of those end up with unplanned purchases in the end. (Emizentech)*
    6. 1.3 billion people are projected to use a mobile payment app by 2023. (eMarketer)*

    Mobile Search Statistics

    1. Mobile is the most important search platform for 48% of consumers who use a smartphone to start a search. (Emizentech)*
    2. 58% of Google searches are done by mobile phones. Only 5 years ago, this figure was almost half that (34%). (Emizentech)*
    3. 65% of clicks on Google’s paid search results come from mobile devices. (Emizentech)*
    4. 42% of mobile band-based bandwidth includes Google search. (Emizentech)*
    5. 88% of consumers needing a local business are on a mobile phone or go to that business within 24 hours. (Emizentech)*
    6. 60% of consumers use social media to research new products and services. (Emizentech)*

    Mobile Customer Retention Stats

    1. 42% of consumers’ total online time is on mobile devices. (Review 42)*
    2. 57% of people won’t recommend a business if the website doesn’t have a well-designed mobile version. (Review 42)*
    3. 53% of people will abandon a mobile website if it takes longer than 3 seconds to load. (Review 42)*
    4. 60% of companies think they’re providing a good mobile experience, but only 22% of consumers agree with that. (Review 42)*

    Mcommerce Growth & Trends to Watch 

    According to (formerly Statista), mobile commerce sales would reach $3.56 trillion in 2021—22.3%more than the $2.91 trillion it registered in 2020. It has also clocked an average year-on-year increase of 29.8% between 2016 and 2021.
    This is particularly impressive given the fact that revenue from mobile commerce sales in 2021 was more than 3.5 times what it was in 2016. With the number of mobile users currently at 5.22 billion and growing, there’s certainly nothing to indicate that mobile commerce growth will stop anytime soon.*
    Why is mcommerce growing so fast? Simply put, because people are spending more and more time on their mobile devices instead of on their computers. One reason is that smartphones are getting faster, screens are getting bigger, and the mobile experience is getting better. Another trend is behavior: consumers being increasingly inseparable from their phones and mobile devices.
    With so much growth happening so quickly in the world of mcommerce, what’s shaping the landscape to come? These are the mcommerce trends to watch for in 2022 and beyond: 
    Augmented reality: Businesses benefit from interactive experiences built with AR to showcase their products and let customers try them on before making a purchase. Think of a brand like Warby Parker which built an app that allows customers to try on an extensive range of glasses without leaving their homes. And with the AR app market expected to reach $15.5 million by 2022, this is a strategy worth considering.* 
    One-click ordering: While cart abandonment is always a challenge, mobile apps have actually been more successful at reducing abandoned carts than mobile websites. Why? Because retail apps allow users to store their information securely, facilitating repeated orders without having to enter payment credentials each time.*
    Voice Shopping:  40% of adults use voice search at least once a day.* What are people using voice search for? 36% of consumers use voice to add items to their shopping lists. 22% make a purchase using voice, and 17% reorder items.* 
    Social Commerce: Social commerce features have emerged across a number of platforms, creating new opportunities for brands big and small. Sites like Instagram and Facebook have become prime real estate for brands to advertise their wares and convert social traffic into sales. One key draw is that the entire shopping experience happens in one place: customers can discover products, read reviews, and purchase all within their social media feed. 
    Progressive web apps: The pitfall of some brands’ native apps is that they can be cumbersome to install and use a lot of mobile data to run. Progressive web apps (PWAs) are a technology that allows users to access a website on their smartphone and use it as an app. Similar to traditional smartphone apps, PWAs provide users with instant updates, push notifications, offline access and short loading times. 
    Starbucks’ PWA is a winning example here, allowing customers to view the menu and place an order on the go, even with an unstable internet connection. In this way, PWAs are similar to native apps, but they take up less space on mobile devices.
    Wearable Payments: Mobile wallets have proven themselves a preferred payment option for consumers, and that will extend to wearables like smart watches, health sensors, and fitness trackers. Wearable payments are projected to drive more than $100 billion in transaction volume in 2025.* 

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    Last updated on June 25, 2024