By Hisham Isa, Vice President (Marketing)
The vast majority of consumers in Southeast Asia use the mobile internet on a regular basis. If you're not advertising on it, you should be. But while the region is definitely a great place to be in the mobile industry, one area is lagging behind: m-Commerce.
It's not that consumers wouldn't like to conduct transactions with their phones. Rather it's that the trust – and in some case, the necessary infrastructure – isn't there. Banks, telcos and governments need to address this in two ways. First, they need to create an environment that fosters genuine trust, by setting up new channels for consumer feedback acting upon the complaints. And second, they need to embark on better public education campaigns to publicise the availability and security of existing m-commerce platforms.
For the first part, we don't need to look far to find a good example . . . .
Indonesia
Just a year ago, Indonesia consumers were complaining loudly about being billed for unwanted value-added services (VAS). The Indonesian Consumers Foundation estimated that mobile consumers were paying more than US$16 million a month in bogus charges and fees for services they did not intend to purchase.
After a rash of complaints, government regulators stepped in. The Ministry of Telecoms cancelled all subscription services, implemented stringent new rules and procedures and required consumers who wanted the services to re-subscribe.
Mobile players have spent most of the past year rebuilding the industry from scratch. Ad traffic dropped at first as advertisers pulled out, but it soon rebounded and surpassed all previous levels. We now deliver 3 billion ad impressions in Indonesia every month. The country occupies the #2 spot on BuzzCity's list of top markets (India is #1) and in the first nine months of 2012, we saw 22% growth as compared to all of 2011. We have also seen the return of more responsible VAS advertisers.
A key element of this recovery has been the establishment of independent call centres to handle consumer complaints. These call centres have reassured mobile users, who now feel more comfortable making purchases with their phones or simply clicking on a mobile ad.
I don't want to give the wrong impression – mCommerce is not flourishing yet in Indonesia – but the right environment is being created. Now, the major mobile players need to more actively educate their consumers.
Definitely, it's not all about voice
Across Southeast Asia, revenues from data traffic and value-added services are becoming increasingly important to carriers.
At this point, it's worth pointing out a few key market features . . .
Consumer mobile services should be accessible by both smartphones and feature phones to reach the most number of customers. If you have to choose between them, use our Campaign Planner to check out the demographics of your target market first.
Which brings us back to m-Commerce . . .
Despite a good start – including high mobile penetration and a preference by consumers to use their phones to access the internet – mobile commerce in Southeast Asia is lagging behind, especially compared with a place like Kenya where M-Pesa is widely used.
In a survey earlier this year, MasterCard ranked a number of countries on their readiness for mobile commerce. The credit card company argues that no county has yet reached a tipping point for mass adoption of mobile payments, but the best performing country in their survey is Singapore, which ranks higher than Canada, USA, Kenya and South Korea (numbers 2 – 5 respectively).
But while MasterCard believes that Singapore is well positioned for all types of mobile payments, it notes that "more of an effort needs to be made to communicate the value of mobile payments to consumers.”
Like Buzzcity, MasterCard also argues that Southeast Asian consumers are ready to buy things with their handsets. In their survey, Philippines, Thailand and Vietnam rank among the world’s top 10 nations in terms of consumer readiness for person-to-person, point-of-sale and m-commerce payments.
But they rank poorly when the effectiveness and penetration of consumer financial products is measured. Banks in these markets need to promote what is already available as well as what they plan to roll out in future, keeping in mind that building trust is a key to growing the industry.
The vast majority of consumers in Southeast Asia use the mobile internet on a regular basis. If you're not advertising on it, you should be. But while the region is definitely a great place to be in the mobile industry, one area is lagging behind: m-Commerce.
It's not that consumers wouldn't like to conduct transactions with their phones. Rather it's that the trust – and in some case, the necessary infrastructure – isn't there. Banks, telcos and governments need to address this in two ways. First, they need to create an environment that fosters genuine trust, by setting up new channels for consumer feedback acting upon the complaints. And second, they need to embark on better public education campaigns to publicise the availability and security of existing m-commerce platforms.
For the first part, we don't need to look far to find a good example . . . .
Indonesia
Just a year ago, Indonesia consumers were complaining loudly about being billed for unwanted value-added services (VAS). The Indonesian Consumers Foundation estimated that mobile consumers were paying more than US$16 million a month in bogus charges and fees for services they did not intend to purchase.
After a rash of complaints, government regulators stepped in. The Ministry of Telecoms cancelled all subscription services, implemented stringent new rules and procedures and required consumers who wanted the services to re-subscribe.
Mobile players have spent most of the past year rebuilding the industry from scratch. Ad traffic dropped at first as advertisers pulled out, but it soon rebounded and surpassed all previous levels. We now deliver 3 billion ad impressions in Indonesia every month. The country occupies the #2 spot on BuzzCity's list of top markets (India is #1) and in the first nine months of 2012, we saw 22% growth as compared to all of 2011. We have also seen the return of more responsible VAS advertisers.
A key element of this recovery has been the establishment of independent call centres to handle consumer complaints. These call centres have reassured mobile users, who now feel more comfortable making purchases with their phones or simply clicking on a mobile ad.
I don't want to give the wrong impression – mCommerce is not flourishing yet in Indonesia – but the right environment is being created. Now, the major mobile players need to more actively educate their consumers.
Definitely, it's not all about voice
Across Southeast Asia, revenues from data traffic and value-added services are becoming increasingly important to carriers.
- The Philippines has led the way in this area. As early as 2004, services like chat, SMS, MMS and Internet browsing accounted for 40+% of Smart's and 30+% of Globe's revenues. At the time, the regional average was 15%.
- Now, in Malaysia, non-voice services account for more than 40% of Digi and Maxis' revenue.
- In Thailand, AIS is seeing an increase not just in data revenues, but voice as well.
At this point, it's worth pointing out a few key market features . . .
- Nearly 80% of mobile users go online several times a day, most for at least half an hour and 23% for more than 6 hours per day.
- Smartphones are widespread in several countries in the region, particularly Singapore and Thailand. Smartphone usage will rise further as sub-$100 smartphones become readily available. But, for now, feature phones are still the dominant tool. Taken together, feature phones and smartphones account for almost the entire market.
- BuzzCity's latest survey meanwhile reveals that consumers are still looking for a wide range of mobile services, including education, banking and more media content. There's a huge opportunity here for companies that can aggregate music, movies and TV for mobile viewing.
Consumer mobile services should be accessible by both smartphones and feature phones to reach the most number of customers. If you have to choose between them, use our Campaign Planner to check out the demographics of your target market first.
Which brings us back to m-Commerce . . .
Despite a good start – including high mobile penetration and a preference by consumers to use their phones to access the internet – mobile commerce in Southeast Asia is lagging behind, especially compared with a place like Kenya where M-Pesa is widely used.
In a survey earlier this year, MasterCard ranked a number of countries on their readiness for mobile commerce. The credit card company argues that no county has yet reached a tipping point for mass adoption of mobile payments, but the best performing country in their survey is Singapore, which ranks higher than Canada, USA, Kenya and South Korea (numbers 2 – 5 respectively).
But while MasterCard believes that Singapore is well positioned for all types of mobile payments, it notes that "more of an effort needs to be made to communicate the value of mobile payments to consumers.”
Like Buzzcity, MasterCard also argues that Southeast Asian consumers are ready to buy things with their handsets. In their survey, Philippines, Thailand and Vietnam rank among the world’s top 10 nations in terms of consumer readiness for person-to-person, point-of-sale and m-commerce payments.
But they rank poorly when the effectiveness and penetration of consumer financial products is measured. Banks in these markets need to promote what is already available as well as what they plan to roll out in future, keeping in mind that building trust is a key to growing the industry.
