Paypal had a press conference in HK to talk about mobile commerce – we thought this would be interesting to share:
The ‘PayPal Online and Mobile Shopping Insights 2012’ study revealed that 2012 is proving to be a landmark year for mobile commerce in Hong Kong, fuelled by a significant rise in the number of mobile shoppers and a substantial increase in spend per head. The mobile commerce market in Hong Kong has seen phenomenal growth from HKD 1.5 billion in 2011 to HKD 6.4 billion in 2012, representing more than a 444% jump in just one year. The mobile commerce market is also forecast to reach HKD 17.8 billion in 2015 – 12 times bigger than last year. This shows that mobile commerce is now mainstream and will play an increasingly significant role in the overall commerce market as Internet-enabled mobile devices become a vital part of Hong Kongers’ daily lives.
The results of the mobile commerce study are staggering and show just how quickly shopping and paying on mobile devices has taken off in Hong Kong. Mobile shopping has grown tremendously from just 10% of the total online shopping market in 2011 to 41% in 2012. The mean spend per head for mobile shoppers increased from HKD 4,002 in 2011 to HKD 5,725 in 2012, while 1.1 million Hong Kong consumers have made a purchase through a mobile device in 2012, nearly triple in size from just 376,000 Hong Kong citizens last year. In fact, mobile shoppers accounted for over half of online shoppers in 2012, compared to just one in five online shoppers in 2011.
“Currently with a 62% smartphone penetration rate, Hong Kong is one of the most mobile-centric markets in the world, which clearly explains why mobile commerce is exploding here. Local consumers’ love of smartphones is now stretching to tablets and causing a massive shift in spending behavior as more and more Hong Kongers use a variety of mobile devices to shop anytime, anywhere.” said Kerry Wong, Managing Director, PayPal Hong Kong, Korea and Taiwan. “Retailers must truly embrace mobile if they want to meet consumer demand and tap into this growing HKD 6.4 billion market. At PayPal, we are committed to offering consumers and merchants a safer, faster and more convenient mobile payment experience which can be completed in as little as two clicks, to enable them to take advantage of this significant, high-growth mobile commerce opportunity today.”
In addition to the overall growth of the mobile commerce market, the survey also showed how mobile shopping behavior is changing, from the differences between smartphone and tablet shopping to new forms of mobile commerce such as scanning QR codes.
Smartphones leading mobile commerce but tablet owners spending more
The study revealed that the majority of purchases made using mobile devices were via smartphones (58%) versus tablets (42%). Hong Kong consumers spent HKD 3.7 billion through their smartphones in 2012 compared to HKD 2.7 billion through tablets. However, the average spend per head on tablets was HKD 5,731 – significantly higher than the average spend per head on smartphones, which amounted to HKD 4,081 suggesting a mobile shopping trend for higher-priced items via web-enabled tablets.
The top spending categories for mobile shopping are listed in the graph below. Mobile shopping is much broader than just mobile app downloads with fashion and accessories, movie tickets, books, food and groceries, and even financial products appearing as popular categories for both smartphone and tablet shoppers today.
Hong Kong consumers’ love of fashion is clearly reflected in their mobile shopping habits; apparel is by far the most popular category, with HKD 754 million spent on smartphones and HKD 536 million on tablets in 2012. Everyday shopping items such as movie tickets (HKD 320 million on smartphones, HKD 205 million on tablets) and books (HKD 311 million on smartphones, HKD 242 million on tablets) have also been common mobile purchases over the last 12 months. Given Hong Kong’s status as a financial hub, financial products are also a popular mobile choice with HKD 142 million spent on smartphones and HKD 205 million spent on tablets in the last year.
With an eye on future mobile shopping trends, the survey also asked Hong Kong consumers what they would like to purchase via their mobile devices if available. Interestingly, three of the top four categories for both smartphones and tablets are related to ticketing – live concerts/events, movies and airlines – which shows retailers that there is huge consumer demand for buying tickets on the go in Hong Kong. To boost their mobile sales, businesses in these categories should provide multi-channel shopping experiences – offline, online and now mobile.
Those who shopped on their tablets also exhibited a slightly different set of future buying preferences than smartphone users. Tablet users indicated they would most like to purchase personal electronics (16%), travel packages (12%) and home electronics (11%). Along with the higher average spend per head, this data suggests that tablet owners are more likely to purchase higher-priced items on their devices.
The survey findings also revealed a clear trend in ‘couch commerce’ with 91% of purchases on tablets and 83% on smartphones made at home. The office was the next common place to shop (53% of smartphone users and 50% of tablet users). Meanwhile, when commuting via bus or train or while in transit was the third most popular place for mobile shopping transactions (23% of smartphone users and 21% of tablet users).
QR codes enable 24 x 7 mobile shopping and blur the lines between online and offline commerce
Smartphones are increasingly bridging the gap between the online and offline retail worlds. The study revealed that Quick Response (QR) codes are gaining popularity among Hong Kong smartphone shoppers. Nearly seven out of every ten smartphone users are aware of QR codes, and of those who are familiar with QR codes, approximately half have used them for an average of five transactions in 2012.
The most common goods purchased through QR codes were books and fashion items. Interestingly, security (28%) was cited as the top reason Hong Kong consumers use QR codes, as they are assured that their transactions are secure when shopping on the go. Easy access to product information (26%) and easy-to-download offers and coupons (25%) were also cited as key drivers of QR code usage. QR codes provide retailers the benefit of launching virtual pop-up stores across all channels and media and enable 24 x 7 mobile shopping to complement bricks-and-mortar store locations.
Security concerns and unfamiliarity are the biggest mobile shopping barriers for consumers
While Hong Kong consumers are exponentially increasing their mobile shopping spend, security concerns and non-optimized mobile shopping experiences appear to be the main barriers towards greater adoption. The research highlighted that 62% of non-mobile shoppers have not bought items via a mobile device as they are concerned that the transaction is not secure enough, while 45% cite the small screen size as a barrier to shopping on their mobile devices. In order to benefit from the fast-growing mobile commerce opportunity, Hong Kong retailers must implement a safer mobile payment platform to keep shoppers’ financial details confidential and secure on-the-go, while providing a more convenient mobile-friendly shopping experience from browsing to selecting to paying for the items with just a few clicks on mobile devices.
Research Methodology
Commissioned by PayPal, The Nielsen Company conducted the online research study ‘PayPal Online and Mobile Shopping Insights 2012’ to develop a greater understanding of the mobile commerce market and the habits of Hong Kong mobile shoppers in 2012. The research, which was conducted online from August 18-23, 2012, surveyed a representative sample of 1,003 Hong Kong online shoppers aged 18 and above, of which mobile shoppers constituted 537 respondents.
