July 04, 2013

Why Mobile Marketing is a Must for Small Businesses

By Hisham Isa, Vice President (Marketing)

Consumer appetite for m-commerce has grown substantially over the past year, presenting small businesses with new opportunities and revenue streams.

Simply put, if you're not marketing and selling on mobile, then you're missing out.

Consider this . . .

  • According to our research, more than half of mobile users – 55 percent -- plan to make a purchase with their phones this year.
  • Nearly one-third of our survey respondents will use a mobile device to purchase a present for someone.
  • And by and large, the vast majority of consumers are no longer concerned about mobile security. A year ago, 27 percent of survey respondents told us they were worried about mobile transactions. But by the beginning of 2013, that figure dropped to just 3 percent.
Mobile is also accounting for an increasingly greater share of e-commerce.  Here are just a few examples:
  • In the UK, 20 percent of all web-based sales were made from a mobile device during the first quarter of the year. That's up from less than one percent, just three years ago.
  • In the US, m-commerce rose 31 percent in the first quarter versus 20 percent for all e-commerce and just 3.7 percent for in-store commerce. Consumers spent an estimated US$5.7 – 8.75 billion using mobile devices during this period.
  • M-commerce in China is not quite as big as in the US . . . yet. Chinese consumers spent an estimated RMB 26 billion (US$4.3 billion) via mobile from January to March. But the country's biggest online retailer, Alibaba, expects China's m-commerce sector to top the US in 2014 with US$27 billion in sales.
Related to m-commerce growth is another important trend:  mobile is cutting into desktop ad spend.  US ad spend on desktop banners and search is expected to peak next year (at around US$42 billion) and that within four years mobile will account for the majority of all digital ad spending. That's particularly impressive when you consider that just two years ago, less than five percent of digital budgets were allocated to mobile. Take a look at this chart, which shows growth in the number of banners served on The BuzzCity Ad Network: 

In addition to making purchases online, consumers are also using their phones to compare prices, read reviews, share tips and recommendations with friends and research product specs.

While m-commerce was initially dominated by digital mobile products (ringtones, games, music, etc.), today consumers use their phones to buy clothing, electronics and more. Just take a look, for example, at Zalora, which has rolled out mobile sites in eight Asian markets. The online fashion retailer was founded in 2011 and recently shipped its one-millionth item. Investors like the Zalora story and are pumping US$100 million into the company so it can expand its product line.

Businesses should realise that mobile usage is both personal and local.

It's personal because a large part of mobile usage is for entertainment (nearly 60 percent of users play games, listen to music or watch a video on their phone while commuting) and communications (talking, checking email and social media).

It's local because mobile consumers also check the weather, news, public transport schedules, event listings and search for restaurants and things to do.

It's worth noting that nearly 15 percent of commuters also browse online catalogues and check out product reviews and comparison sites.

These shifts in consumer behaviour present obvious opportunities for small businesses, whcih may then face a choice between building a mobile site or creating an app. We recommend starting with the mobile site to build your company's online presence. A mobi-site will look good on any phone, regardless of the size; an app needs special coding to do this. Mobile sites are also cheaper, easier to build and update. Apps meanwhile could be a good next step, particularly if you've charted a clear purpose for it. We have more tips on how to build your mobile strategy in this article.