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M-commerce set for take-off

News, 20 February 2015

SAN JOSE, CA: Mobile commerce is growing at nearly three times the rate of overall ecommerce, with consumers in the United Arab Emirates, China and Turkey leading the way, according to new research.

Digital payment firm PayPal and researcher Ipsos surveyed more than 17,500 consumers in 22 countries to gain insights into mobile shopping habits and the barriers to growth.

They found that while the amounts spent via smartphone and tablet remained a small proportion of the total online spend, at 9% and 5% respectively, the prevalence of mobile shopping was significant.

One third of online shoppers surveyed reported having purchased something via smartphone in the preceding 12 months, and 20% had done so using a tablet.

This surge in smartphone commerce was being driven by young adults: a global average of 59% of smartphone shoppers are between 18 and 34 years old compared to 44% of total online shoppers.

"We are on the cusp of the mobile-first era," said Anuj Nayar, senior director of global initiatives for PayPal, as he revealed that mobile had accounted for more than 20% of the company's payment volume in 2014, up from less than 1% in 2010.

Leading the way are China, Turkey and the United Arab Emirates. In China, more than two thirds (68%) of online shoppers had used a smartphone to make a purchase in the past 12 months, while more than half (57% and 53% respectively) had done so in the UAE and Turkey.

These three also dominated when considering the proportion of online spending done via smartphone. Emirati online shoppers attributed on average 24% of their online spend to smartphone purchases, followed by Chinese consumers on 21% and Turks on 19%.

Screen size emerged as one of the major factors hindering mobile commerce. One third (34%) of those who had not shopped via smartphone in the preceding 12 months cited this as a reason. And even among those who had done so, the same proportion said the small screen was a reason for not doing so more often.

Nayar expected this would change as a trend to larger screen sizes – witness the popularity of the latest, larger iPhones – coupled with streamlined digital payment options would make it "more intuitive for customers to pay with their mobile phone".

Data sourced from PayPal; additional content by Warc staff