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MWC 2016: When will the penny drop for mobile commerce?


By Charlotte McEleny, Asia Editor

February 18, 2016 | 6 min read

Mobile commerce as a ‘catch all’ term is vast, encompassing mobile payments, coupons and ecommerce. In much the way a new year forces us to reflect on our annual failures, as Mobile World Congress looms once more, the industry is forced to check whether its grand ambitions and promises have been realised. Mobile commerce, in all its many guises, suffers quite acutely from this.

For those in Europe and the US it also doesn’t help that in other markets that skipped the desktop phase (remember that?), mobile commerce is, simply, commerce. Chinese people specifically, via platforms and businesses like WeChat and Alibaba, have easily migrated offline habits into online.

Rachel Pasqua, practice lead, connected life and mobility, MEC Global, North America, says: “The Apple and Google wallets create more adoption of mobile and CRM, for me mobile payments growth will come from frustration with EMV terminals. It’s been very interesting to see what’s happened in China with Weixen (WeChat), some brands are opening stores on there, rather than dot com. It’s fascinating but it’s also a very different society, a lot of consumers skipped right to mobile instead of desktop.”

WeChat versus PayPal

The perfect example of this is the recent Chinese New Year, in which more online payment transactions occurred on WeChat during the celebrations than PayPal had in an entire year. Of course, the value of each transaction was low and it’s a comparison using a platform that serves a potential 20 per cent of the entire world’s population, but adoption of mobile payment in other markets has been slower.

A key issue with this is fragmentation of who ‘owns’ the payments. Is it the likes of Apple or Google, could it be the banks, or an intermediary like PayPal? To part with our money a lot of trust needs to be given to a business or brand and well-known businesses should be able to circumvent trust issues faster than start-ups. To counter this logic, businesses like Transferwise are also cropping up, proving that having a good value proposition and being quick can build trust faster than we initially thought. Research has also shown that even Apple is having issues gaining trust in the UK.

Fragmentation leads to slow adoption

The success of WeChat also comes from being across all of these fragmented points; it doesn’t matter what phone, which operator, or how you bank, you just need to have a WeChat account. Despite announcing mobile payments on Facebook Messenger a year ago, the realisation of this is still yet to appear.

Payments is the highest, most awkwardly, hanging fruit on the mobile commerce tree, however, and more waves are being made around the CRM, experience and upper end of the funnel.

Mobile coupons

A year ago, at Mobile World Congress, a new service launched into the coupon market that aimed to be a bridge between mobile ads and the mobile wallet feature. Vibes has since attracted business from brands including HP, Firestone Autocare, Campbell's, Sears, Adidas, Appleby's, Subaru and Honda.

By being able to serve the ads across a myriad of mobile networks and platforms, the distribution for brands can be wide and circumnavigates most of the issues around fragmentation, though redemption does rely on its wallet partners.The ads currently direct people to download coupons into the Apple and Google Android wallets but fast growing wallet services such as Samsung Pay could become contenders too, according to Brian Bradtke, VP of mobile wallet advertising from Vibes.

Mobile commerce eases ad blocking

“In our opinion, Android and Apple Pay are the monsters but Samsung Pay is coming up quickly behind,” he said.

For Vibes’ coupon redemption to work for brands, the advertising it uses also has to work hard in order to get the distribution needed to reach scale. With ad blocking becoming more of a real threat, Bradtke believes giving offers as part of the exchange could actually help people like mobile ads more, rather than become a problem for the business.

“It adds value to the consumer and the advertiser. Vibes carried out a mobile consumer survey and the number one desire of the consumer was to get a mobile offer as the prefered destination. What we are doing is allowing them to save that, proving to them the value and giving them what they want. [Being in the wallet] is also allowing advertisers and agencies to update overtime,” he said.

Commerce is not an ad blocking panacea

While Pasqua agrees, she says there’s more to be done to prove the value of mobile ads and doesn’t believe offers to be a panacea to the issue.

“Consumer response to ad blocking has so much more going into it. Anything that can add in terms of value can certainly help shape it overall. Sucking up data and interrupting performance on the page is the foremost issue and the relevance of ads tends to be secondary. But anything more relevant will help,” she argues.

Limited mobile real estate

With limited real estate on the phone to re-convince people of better ads, in terms of the value exchange, like Vibes, both Pasqua and Bratke agree that creative needs to work harder, while retaining the relevancy that tends to suck up customer data.

This is another issue blighting the journey that mobile commerce should be accelerating on, and isn’t one restricted to countries that were desktop first.

Once locked into a behaviour, as described by Bratke and shown by the sheer scale of WeChat transactions, mobile commerce can be brilliant for loyalty and repeat transactions, but the key is creating something that users want.

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