Mobile Commerce To Be A $638 Bn Market By 2018 : Study

mobile-commerce-deloitte-studyCommerce generated on e-commerce platforms on mobile devices, called mobile commerce or m-commerce, is expected to surpass $638 billion by 2018, a recent study forecasts. Ease of use, availability of various commerce applications on mobile devices like smartphones and tablets fueling this growth, the joint study by Deloitte and Assocham today revealed.

Cash on Delivery (CoD) is the most preferred mode of payment in India with 45% of the shoppers using it while 21% shoppers opt for debit cards and another 16% go for credit cards. The report said the CoD mode has many issues ranging from high direct and indirect costs, security, or time taken to reverse logistics arising from CoD defaults. More people have banking access due to the financial inclusion project – Jan Dhan Yojna of the government. Digital companies such Paytm, Videocon D2H, and telecom operators such as Airtel, Idea are entering the banking arena with payment bank license.

“Emerging cashless payment solutions will boost the e-commerce sector,” said the study.

The joint study called “Global Powers of Retailing 2015,” states that online marketplaces rather than pure inventory-led companies tend to serve as the primary mobile commerce model in Asia. The high costs of holding inventory, poor logistics and supply chain challenges in India are shifting the inventory-led companies and new entrants to adopt marketplace model. Also, e-Marketplaces work well in India due to high fragmentation on supply side.

E-tailers like Flipkart, Amazone and Jabong now get 50% of their revenues from consumers shopping on their mobile phones. Predictive analytics is helping the e-tailers to provide better solutions in real-time enabling compelling user experience even on mobile screens, it said.

However, while shoppers want real-time, relevant, and personalized information and offers, retailers will need to surround this service with very strong privacy and security. Trust, transparency, and protecting customer information will be critical in retaining loyalty as mobile commerce becomes the norm, noted the joint study.

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