E-commerce on mobile phones – heavy traffic also from smartphones in 2010
január 28, 2011
Purchases made via smartphones were finally measurable in 2010 and reached 1.5% of all electronic sales in Hungary. Consequently, Hungary is in line with other developed e-commerce markets: shopping habits are gradually changing – reveals GKIeNET – T-Mobile’s Report on the Internet Economy.Shoppers are increasingly conscious
While online purchases totaled 99 billion forints in 2009, they will likely exceed 135 billion forints this year (excluding tourism and insurance-related services), with the Christmas season being the most relevant period in e-commerce. Online stores in Hungary record almost one-quarter of their total annual sales between mid-November and December 20. The increase in online shopping indicates that Hungarian consumers also increasingly chose the convenience and price discounts that most online stores provide. The fact that we usually find lower prices online than what we expect or what we are used to in traditional retail stores obviously encourages consumers to shop around on the internet. Consumers are also starting to take advantage of their smartphones to find the desired prices and web stores.
In line with the trends of the previous years, approximately 1.2-1.4 million Hungarian consumers purchased various products or services online in 2010. At the end of 2010, 15% of all mobile handsets in Hungary, some 1.5 million phones, can be considered smartphones. This percentage changes from month to month: During the Christmas season this year, every third new phone that was sold was in this category, just like in many other countries worldwide. It is not surprising that more and more people use their internet-capable handsets for mobile purchases, as well.
FIGURE 1. – WORLDWIDE SPREAD OF SMARTPHONES BASED ON NEW PHONE SALES
Barcodes aiding mobile purchases
In the fourth quarter somewhat more than 1% of all internet content was accessed via mobile phones in Hungary. At the same time, in the 2010 Christmas season as much as 1.5% of all online traffic was made up by purchases initiated through mobile phones. This is mostly due to the spread of smart phones in Hungary (and worldwide) in 2010. Thanks to affordable mobile internet packages, more and more users are discovering the capabilities of their handsets, using them for browsing during daily downtimes, and even for product purchases more recently.
In addition to paying for highway usage, lottery purchases and parking, product purchases in online stores and through downloadable price comparison apps are increasingly prevalent. The latter have the additional major advantage of being able to read product barcodes using the handset’s built-in camera. This information is then used to look up similar products in a price comparison database, thus helping the user to find the most favorable price. As a further advantage, the opinions of other customers can also be recalled instantly next to the product descriptions, helping would-be customers make their decisions. These shopping applications have become available on several mobile platforms in the past year.
Thanks to these developments, a number of electronic and other products have started featuring so-called 2D barcodes in addition to traditional barcodes. The difference is that the 2D barcodes can store more information, such as the product manufacturer’s web address or an extended product description.
FIGURE 2 – AVERAGE SHARE OF PRODUCT PURCHASES BASED ON SCANNED BAR CODES WITHIN ONLINE SALES IN 45 COUNTRIES
Mobile product purchases are coming
The hands down leaders in mobile purchases are Japan and South Korea, but a similar change in consumer attitude has become perceptible in the United States as well. The American research firm Coremetrics, which focuses on online sales, has issued its latest report, covering the Christmas season. It says that some 5% of the $2.4 billion online purchases were made on mobile phones, while mobile browsing has a 5.8% share within all content access, and smartphone penetration is around 24%. These numbers reflect a nearly 50% overall growth in the country, compared to 2009.
Slowly but surely
The changes in consumer attitudes worldwide and in Hungary clearly point to the spread of online purchases, the prevalence of smartphones and the interconnectedness between the two.
In a favorable sign to those with an interest in online retail, the majority of Hungarian consumers are paying for services offered electronically with electronic payment methods, which foreshadows a gradual increase in the use of electronic payment methods for physical products as well.