Today marks the beginning of the Chinese New Year. Kicking off the 2015 lunar calendar and the year of the goat (or sheep or ram), today celebrates the emergence of spring, the coming together of families, and the arrival of good fortune. Given China’s prosperous technology evolution, the superpower has a lot to look forward to. According to Forrester’s Consumer Technographics® data, the country is already home to the most mobile-savvy population on the planet, with nine out of every 10 metropolitan Chinese online adults using a smartphone; within the next two years, the nation will see an additional 200 million unique smartphone subscribers:
What will happen when the world’s largest mobile phone market becomes even bigger?
Alibaba has an ambitious goal: becoming the first company to exceed $1 trillion in gross merchandise value in the next five years. To accomplish this, Alibaba is looking to expand in emerging markets, as developed markets like North America and Europe are mature and have high barriers to entry. Emerging markets with rapidly growing smartphone penetration, relatively poor offline retail experiences, challenging logistics environments, and limited online payment infrastructures are ideal targets for Alibaba’s expansion.
The mobile marketplace is a huge opportunity. Forrester expects mCommerce in India to top $19 billion by 2019— an attractive opportunity for players like Paytm, which currently counts more than 25 million users. Forrester expects that the number of online buyers in India will rise from 36 million in 2014 to 125 million by 2019.
On November 20, Google released a report on the findings from a survey it conducted in collaboration with Forrester on online shopping trends in India. The report highlights what’s driving the growth of eCommerce in India, including mobile commerce, female shoppers, and the growing number of people in tier two and tier three cities making purchases online. However, the report also noted some barriers to online retail in India, such as its poor showing regarding customer satisfaction and trust; to make further progress, eCommerce firms must work hard to improve in these areas. The report’s key findings involved:
Mobile shoppers. Mobile is driving the market, especially in tier two and tier three cities in India. Half of the online shoppers in tier three cities are already on mobile, compared with just one-third in tier one cities. The percentage of online buyers making shopping queries from a mobile device has grown from 24% in 2012 to 57% in 2014. Forrester forecasts that mCommerce in India will reach $19 billion by 2019.
Women. Women are far more active buyers than men in tier one cities. They outspend men online by two to one, and one-quarter of women in tier one cities make mobile purchases.
New buyers. More than 70% of people in tier one and tier two cities who do not currently make purchases online are expected to do so in the next 12 months.
New growth areas. Home furnishings, cosmetics, and baby care are the next areas of growth for online retail after the success of online retail in the consumer electronics segment.
Indian consumers are more likely to own a mobile phone and use it to access the Internet than own a PC or laptop and use a wired Internet connection. The stats speak for themselves: As of September 2014, India has more than 930 million wireless subscribers against just 27 million wireline subscribers. And while just 8% of these 957 million subscribers have a broadband connection (with download speeds of 512 kbps or better), fully 80% of them are mobile users.
This is leading to the mobile mind shift: the expectation that consumers can get what they want in their immediate context and moments of need. This trend is particularly evident in retail; today’s consumers are increasingly using their mobile devices to accomplish a variety of shopping-related tasks online – from researching a product to buying it.
Forrester has developed a global retail segmentation framework to identify, assess, and compare the behaviors of shoppers in various countries. Five segments identify the most prevalent and regular shopper behaviors (see figure below). According to this framework, 6% of metro Indian online users fall into the Mobile Shoppers segment. In comparison, only 4% of online users in the US are Mobile Shoppers! Even the percentage of Super-Shoppers in India is more than twice that in the US.
As mobile becomes a critical component of your digital strategy and overall business, eBusiness professionals should have an answer when their executive teams ask, “Who does mobile commerce well?” Forrester has answered that question for you in our new report published today. Using a proprietary framework, we analyzed top retailers’ mobile experiences (sites and apps) and measured how well they addressed key challenges to mobile commerce sales and supported mobile-enabled commerce in other channels. We selected the best of the best for our review to highlight the strongest functionality and uncover cross-category best practices.
Our framework evaluates the strengths of these mobile phone websites and their corresponding apps across six elements:
Findability. The ease of finding a mobile site or app altogether.
Utility. How useful the site or app is for shoppers.
Searchability. How well search and search functionality like predictive text works on mobile phones.
Browsability. How easy it is to browse the retailer’s mobile site or app.
Buyability. How easy and frictionless the buying process is on the mobile site or app.
Overall design. The ease of navigating content on mobile sites and apps, as well as other mobile content that shoppers engage with including email and text messages.
India’s online retail market is on the radar of global investors and eCommerce players, which have announced investments topping $3.6 billion in the past three months, including $2 billion in Amazon, $1 billion in Flipkart, and potentially $650 million in Snapdeal. Growth in India’s online retail market is powered by its fast-growing smartphone penetration, as customers are increasingly using their mobile phones to buy products online. More than half of Snapdeal’s and Flipkart’s sales and nearly 35% of
Cross-channel sales -- also known as web-influenced sales or transactions that touch a digital medium, but are not completed on the Internet -- are now more than four times larger than online sales alone and will reach $1.8 trillion by 2018. This is according to Forrester's just released five-year US cross-channel retail sales forecast. Offline sales -- primarily web-influenced offline sales -- will comprise nearly 75% of the $475 billion in US retail growth anticipated between 2014 and 2018. This growth in cross-channel sales can be attributed to US online consumers increasingly using their phones in retail stores to research products online. Retailers would be wise to see this growing trend as the new normal; if this is the first you’ve heard about your customers’ in-store mobile behavior, you’re already late to the game.
Despite frequent in-store research on the mobile device, the number of actual mobile transactions remains low. Consumers are more interested in using their phone in the “pre-shop” phase, be it searching for a product’s location, comparing prices, or checking online inventory. Many retailers, such as Target, have found it worthwhile to invest more in mobile services that meet customers’ needs in their pre-shop context rather than at the point of sale. Target has helped customers find specific items in its stores via its mobile app: A customer can create a shopping list within the app, which then maps that list onto the floor map of the customer’s Target store location, guiding them through the aisles from one item to the next.
I had the opportunity and privilege to get an early look at the new Amazon Fire phone. It delights in many ways, but I’ll focus on the shopping experience enabled through Firefly.
For those who may not remember, Amazon put a dedicated physical button on the left hand side of the phone that launches directly into image recognition. If the image is recognized, then a web-based mCommerce experience launches. The user can then buy the product or it on a wish list, among other things. From there, the experience is more ‘traditional Amazon.’ The ‘new’ is the image, email, URL, etc. recognition.
Why is selling mobile phones important for Amazon? mCommerce in the US alone will add up to nearly $100M by the end of 2014. The new battleground for retailers is in the mobile moment – the point in time and space when a consumer pulls out her phone to get something she needs immediately and in context. Amazon’s FireFly service facilitates two core types of mobile sales moments:
Impulse Sales Moments – these are often flash sales (e.g., WTSO.com, SteepAndCheap, etc.) or spontaneous purchases (e.g., Groupon). The opportunity for Amazon here is in minimizing the friction between consumers seeing something they want, and enabling them to buy it before they forget about it, or find it later in a store nearby.
Replenishment Sales Moments – the phone (or something like an Amazon Dash) is with me when I realize a shampoo bottle or milk is empty or I need more toothpaste.
Coffee-lovers just about anywhere around the world are intimately familiar with the sweet feeling of indulging in a Starbucks Frappuccino – but their blended beverages of choice might be starkly unique. Although the Starbucks brand is familiar to consumers worldwide, the taste of a Starbucks beverage varies regionally according to the diversity of palates. Chinese consumers may seek out a Red Bean Green Tea Frappuccino while their Japanese counterparts prefer a Coffee Jelly; Argentinians may count on that Dulce de Leche Granizado Frappucino where Brits treat themselves to a classic Strawberries and Cream.
The Starbucks Frappuccino phenomenon is a metaphor for any global retailer’s optimal international approach. By catering to consumers’ varying tastes, global companies can hone a strategy that is sensitive to diversity — the “art of thinking independently together,” in the words of Malcolm Forbes.
When it comes to eCommerce specifically, consumer tastes differ not only in relation to products but also to purchase methods. According to Forrester’s Consumer Technographics® data, more than half of metropolitan Chinese online adults regularly buy products through both traditional and mobile devices, but only one in four US online adults and even fewer European consumers do this.