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China, Turkey and UAE dominate smartphone shopping: PayPal

As mobile commerce continues to outpace general ecommerce, consumers in three countries – China, Turkey and United Arab Emirates – are currently dominating smartphone shopping, according to a new report from PayPal and Ipsos.

Emirati online shoppers direct on average 24 percent of their online spend to smartphone purchases, while Chinese consumers follow closely behind at 21 percent and Turks come in third at 19 percent. These findings suggest a strong future for the prevalence of mobile commerce, proving that marketers should take note and offer mobile-first shopping experiences.

“We are on the cusp of the mobile-first era,” said Anuj Nayar, senior director of global initiatives at PayPal, San Francisco. “At PayPal, we’ve seen our mobile growth rise from less than one percent of our payment volume in 2010 to more than 20 percent in 2014.”

Increasing numbers
In China, more than two-thirds (68 percent) of online shoppers have used a smartphone to make a purchase in the last 12 months. Additionally, more than half (57 percent and 53 percent respectively) of Emirati and Turks have done so.

Along with the geographical results of the study, PayPal and Ipsos found that mobile commerce is growing at nearly three times the rate of overall ecommerce.

From 2013-2016, the multi-country average compound annual growth rate for mobile commerce is projected at 42 percent, versus 13 percent for overall ecommerce (including mobile commerce).

The research, which investigated the mobile shopping habits of more than 17,500 consumers in 22 countries, also revealed insights on mobile shopping behavior, barriers and growth markets.

As a percentage of global online spend, PayPal sees mobile commerce as still being relatively small, but, according to the research, smartphone purchases are driving nine percent of online spend, and purchases made on tablets account for only five percent of online spend.

However, both are dwarfed by laptops, desktops and notebooks, which cumulatively are used for 85 percent of online spend.

While spend numbers might be low for the time being, the prevalence of mobile shopping is quite significant, PayPal and Ipsos believe.

One-third (33 percent) of online shoppers surveyed report having purchased something via a smartphone in the past 12 months, and 20 percent report making a purchase via tablet.

The believed surge in smartphone commerce is being driven by young adults, the report suggests, while a global average of 59 percent of smartphone shoppers are between 18 and 34 years old versus 44 percent of total online shoppers.

Hope for apps
According to the report, globally, 64 percent of smartphone shoppers have purchased via an app, and 52 percent have purchased via a browser.

Among those who have used both platforms, apps are typically preferred, or 47 percent prefer to shop through an app.

When all smartphone and tablet users were asked about the benefits of using an app to pay for things either online or offline, the most cited benefits were convenience, as 35 percent of smartphone and tablet users agree that it is a benefit, and speed at 30 percent.

Other unique perceived benefits of using apps by country include instant confirmation of payment in Mexico, which was selected by 37 percent of Mexican smartphone and tablet users, and having a reminder to apply offers or discounts or coupons in China, which was 30 percent, and keeping track of digital receipts in Israel, which was 26 percent.

Currently, the most cited mcommerce-related activity among smartphone owners or users is product research.

Thirty-six percent of respondents said they had “searched for product information on my smartphone” in the past 12 months, 27 percent had “used my smartphone to help locate or find information about a store or business,” and 25 percent had “read customer or user reviews from my smartphone.”

However, when smartphone users were asked how they would like to use their smartphones in the future, out of the things they have not already done, the top responses related to hopeful features including payment options.

Sixteen percent of smartphone users selected “tap my smartphone at the cash register to pay,” and 15 percent cited “ordered ahead using an app or browser on my smartphone.”

Outstanding barriers
The strongest remaining barrier to the growth of mobile commerce is that consumers do not yet see the advantages over shopping on devices with larger screens.

Among smartphone owners and users that have not used their smartphones to shop in the past 12 months, the top stated barriers include users “prefer to purchase online from other devices,” “the screen size is too small,” and “prefer to access the Internet via other devices.”

However, those who have shopped via a smartphone in the past 12 months stated slightly different reasons for not doing so more often, including “the screen size is too small,” “prefer to purchase online from other devices,” and “concern about security of online purchases made from a mobile device.”

“With the advent of low cost mobile phones, larger phone screen sizes and mobile device security improvements, the barriers to mobile commerce will decrease,” Mr. Nayar said. “Those improvements, combined with streamlined digital payment options like PayPal OneTouch will make it easier, more secure and more intuitive for customers to pay with their mobile phone.”

Final Take
Caitlyn Bohannon is an editorial assistant on Mobile Commerce Daily, New York