Understanding Mobile Commerce and How It Can Affect Economies in the Post-Covid Era
The reach of mobile commerce has grown rapidly over the past few years, and this trend shows no signs of slowing any time soon. Smartphones, tablets, and other internet-connected mobile devices are heralding the new age of online and mobile shopping. In turn, safe online transaction services are also contributing to the rapid evolution of mobile commerce.
Although consumers have preferred making purchases via PC and desktop for many years, this preference has diminished. As mobile devices have become more advanced and secure, they’ve made shopping online easier, more accessible, and increasingly streamlined.
Today, most consumers prefer shopping via mobile, and the numbers prove this. The mobile commerce industry earned more than $207 billion in 2018 in the USA alone.
That figure comprised more than 40% of the total eCommerce sales recorded that year. Since then, even more consumers have turned to mobile commerce to satisfy their needs. According to Statista, the value of the industry exceeded $338 billion in 2020, as more people had no option but to shop online due to lockdowns and social distancing measures.
How Covid-19 Triggered eCommerce’s Turning Point
The Covid-19 pandemic hindered economic growth and activities across the globe. But there were a few key sectors that benefited from the widespread changes it caused. One of these sectors was the eCommerce industry. The industry took advantage of accelerated digital transformation and the changing needs of consumers during the pandemic.
As global lockdowns took hold and people stayed at home, thousands of businesses and their customers switched over to digital technologies to supply and purchase goods and services online. This huge shift raised eCommerce’s share of the global retail trade from 14% in 2019 to nearly 18% in 2020.
Even businesses that previously had no digital footprint pivoted quickly and set up online stores selling their products or services. Suddenly, the importance of having an ecommerce alternative to a brick-and-mortar store became all too evident.
According to UNCTAD Acting Secretary-General Isabelle Durant, businesses that turned to eCommerce and mCommerce assisted in mitigating the economic downturn caused by Covid-19. However, they also accelerated a digital transition that Durant says will have lasting impacts on the world’s societies and consumers’ everyday lives. Impacts for which not everyone is yet prepared.
She noted that developing countries need to be included in the movement. Not only as consumers, but as active contributors to the growing trend of mobile commerce and the flourishing digital economy.
“But they have also sped up a digital transition that will have lasting impacts on our societies and daily lives—for which not everyone is prepared,” she said, adding: “Developing countries should not only be consumers but also active players and thus producers of the digital economy.”
The Impacts of mCommerce on Economies
The impacts of eCommerce and mobile commerce on local and global economies can be split into three main categories:
1. Empowered consumers.
Modern consumers are now empowered to make purchases online and via mobile. This has had remarkably positive impacts on customers across the globe. Mobile technology has simplified the shopping experience. It’s made products and services more accessible to new target markets at much lower costs than they would carry at physical retail stores.
It’s also reduced geographical limitations. International shipping allows for consumers all over the world to make purchases online. This empowers them to have an even greater amount of choice, and the ability to use their buying power in the way they prefer. Not by what’s locally available.
Mobile commerce shoppers can now also make purchases anywhere in the world by using secure digital transaction services. This easy accessibility unhindered by geographic location has made it easier than ever for them to feed wealth back into the economy. Mobile tech has also expanded the number of consumers that are actively contributing to the digital economy. It has enabled businesses to reach new, previously unexplored target markets online.
2. Streamlined customer support.
Technologies like artificial intelligence have streamlined customer support and service. AI such as chatbots, can provide an excellent level of support and assistance without the overheads associated with hiring customer support professionals. They’re also available 24/7 and can drive customers through the sales funnel organically.
The availability of this type of customer support gives consumers a chance to communicate more clearly and effortlessly with the businesses they support. And it also gives businesses a chance to divert financial and manpower resources into offering their customers the goods and services that they truly need and want.
3. Lower operational costs.
Mobile commerce platforms are significantly more cost-effective to operate. When compared to physical retail stores with significant overhead costs, they are by far the more affordable option. This has made it easier than ever for individuals to open thriving small businesses that can effectively compete with their larger counterparts.
Just about anyone with a website or social media presence can sell products online, and social selling has made this even simpler. For solo entrepreneurs, it’s incredibly easy to reach a huge target audience without having to incur huge costs.
This new wave of small businesses adds to economic cash flow while ensuring that SMEs can claim a fair share of the market in any given sector.
Mobile technology has essentially redefined the most basic of economic transactions—the purchase and sale of goods. These changes are having significant impacts on the ways in which businesses of all sizes manage their supply chains and their operations in general.
eCommerce and mCommerce have changed the timing, practice, and technological use of B2B and B2C businesses alike. It has also affected the availability of products to consumers, the pricing of these products, the transportation patterns of businesses, and consumer behavior patterns in nations across the globe.
What the Future Holds
As technology, eCommerce platforms, and globalization continue to become more interconnected, mobile buyers and sellers will also increase their levels of connectivity. Plus, they’ll find it easier to transfer money and goods between parties.
Although financial markets and supply chains were widely disrupted by the pandemic, the acceleration of sales transactions was a very positive development for small market corrections.
During major economic recessions, rapid responses to sales transactions can have notable impacts on supply chains, causing major expansions and contractions in production, shipments, orders, and inventory. A decade ago, it may have taken a year or two for economic events in one country to impact the economy of another nation. Nowadays, due to technological advancements and digital communication, these impacts are made evident almost instantly.
In the future, we can expect mCommerce to continue to grow in both popularity and availability as even more efficient methods of mobile transactional processing are developed. Business leaders are already at the forefront of these developments, and the focus on mobile growth continues to intensify as the world increasingly relies on their handheld devices. Consumers can expect to enjoy a wider range of mobile-optimized commercial platforms and services at more competitive prices as businesses strive to remain competitive amid a growing market.
They will also benefit from more secure and instant payment technologies and improved mobile security systems. These systems will keep their personal details safe from cyber-threats while shopping online, encouraging them to spend more and keep future digital economies thriving.