Global Mobile Commerce - Essay Example

14th June Global M Commerce Mobile commerce refers to use of wireless technologies to conduct business activities. As the demand for products increase, local and foreign companies have taken the opportunity of the current modern technologies including mobile phones and internet to communicate with their consumers. On their part, customers can now pay for their products via their mobile phones or through the internet. For example, the establishment of M-Pesa and ZAP money transfer methods in Kenya has made it possible for the Kenya based companies and individuals to pay for their products in various countries including US, UK and other parts of Europe and African countries. Other mobile commerce products and services that are available in various countries includes mobile ATM, mobile ticketing, location based services, mobile banking and mobile advertising among others. Apart from US, other developing and developed countries such as Canada, the UK, France, Germany, Japan, S. Korea, China, Australia and Brazil have adopted mobile commerce as a way of developing their business activities. This paper aims at discussing the use of mobile commerce in UK and particularly mobile advertising. Mobile advertising refers to use of mobile devices to market goods and services. Major advantage of mobile advertising as compared to the traditional forms of marketing is that consumers can make instant decisions. Once they receive the short marketing message, the consumers can within seconds make a decision to purchase. In terms of size, the UK economy is the sixth largest in the world. With a population of approximately 54 million people, UK service sector is much developed thus making it to contribute significantly to the country’s gross domestic product. The country’s GDP stands at 2.5 trillion While the GDP growth rate as indicated in the first quarter on 2014 stands at 0.8% which is the same as 3.4% annual rate. UK labour force stands at 30.50 million with majority of the workers being employed in the services industry. As the result of technological development especially in the telecommunication sector, UK has embarked on the use of mobile phones to improve the way business activities are undertaken. The telecommunication industry significantly and value to the UK economy just like the storage and transport sector. For example, in 2011, the telecommunication sector added a value of £25,098 million while the storage and transport sector contributed £59,179 million. Just like other developed countries such as US and Japan, UK firms have extensively relied on mobile phones to conduct businesses as well as to advertise their brands. The development of e-commerce has made companies especially in the city of London to connect with other firms in the world. According to the UK communication 2013, 55% of the adults with internet connection at their homes use social networking. The number of home broadband connection stands at 21.7 million while the number of mobile broadband subscriptions is 5 million. In terms of mobile phone ownership, the number of subscribers as at 2013 stood at 82.7 million while more that 95% of the adult own or use a mobile phone. 61% of the mobile phone subscriptions are contract. With approximately 200 short messages being sent by an individual per month, the usage of mobile phone has been extensively being used as means of communication among the UK residents and companies. Mobile retail in UK Mobile commerce in UK is growing at a very fast rate. For example, in the first quarter of 2013, the sales via tablets and smartphones contributed up to 20% of the total web sales. After one year that is the first quarter of 2014, m-commerce increased to 34%. This is the report according to Capgemini consultancy as well as Media in Retail Group. The increment is due to the high number of consumers who owns smartphones as well as those who visited the UK e-retail web sites in the first quarter of 2014. As indicated by Chris Webster, one of the leaders of consumer retail and technology at Capgemini, mobile commerce will be of importance in every quarter. This is mostly due to the significant role that mobile play in the shopping journey of UK residents. As the need to create strong customer awareness among the UK consumers in various areas, firms have continued to allocate significant amount of funds for advertisement purposes. For example, in 2013, the advertisers spent more than £6.3 billion to reach the consumers who were surfing the internet across the UK (Jason 3) . It is worth to note that one out of four British customers own a tablet an aspect that has made mobile advertising, buying and ticketing among other services more reliable. As the result of extensive use of mobile display and video especially for the consumer goods, the consumer goods sector has continued to be the biggest spender digital display advertiser. For example in 2012, the sector accounted for 16% of all the total cost of digital advertising. This increased to 18% in 2013. In terms of paid search, the market increased by 14% in 2014 to reach a record of £3.49 billion (Internet Advertising Bureau UK). Basically, the total UK advertising has improved from the pre-clash levels as the transformation of technology takes the course. Currently the retail landscape of mobile phones in UK is changing and more is being worked for to set the sector to a rapid change over the next three years where the behavior of the consumer will be changed. The mobile retail summit has been working with the retailers and this is the third year trying to explore the impact of the retail landscape and what United States is supposed to do to remain top in the market. The summit is concerned with four streams on the retail of mobile phones for example On Device, Driving Footfall, In-store and The Future. Driving Footfall is involved in advertising to the customers or to the digital retail outlets, In-Store is concerned with the assistance of shopping experience in those specific stores available, eretailers are still providing free wifi, ipads, store guides and the mobile payments. On Device is concerned with the retailers on how they can generate sales on the mobiles like tablets and other transactions carried. The future is concerned with the upcoming digital technologies that will be used by the companies that manufacture the products. Marketing experts are involved in the mobile transactions like advertising which they heavily rely on. Due to Mobile Retail Summit and reliance of advertising methods used united states in 2013 made a total sales of 455.6 million units in the worldwide, this was an increment with a 5.7 percent compared with last year total sales of mobile phones (Gartner 24). The use of Smartphone’s has increased and in the third quarter of 2013 the sales of Smartphone’s have accounted for 55 percent. The sales of mobile phones depending on how individuals are using them then the pace seems like it is going to reach 1.8 billion units tablets are being introduced in the market and thus they are expecting the customers to favor their purchase. The table below shows worldwide sales of mobile to vendors in 3Q 2013(000 units) Company 3Q13 Units 3Q13 Market share% 3Q12 Units 3Q12 Market share% Samsung 117,053.5 25.7 97,956.8 22.7 Nokia 63,048.4 13.8 82,3006 19.1 Apple 30,330.0 6.7 24,620.3 5.7 LG Electronics 18,030.7 4.0 13,968.8 3.2 ZTE 13,696.4 3.0 16,605.9 3.9 Huawei 13,574.4 3.0 11,918.9 2.8 Based on the extensive use of mobile phones, mobile commerce has fully developed in UK. The plan of the country is to ensure that at the end of 2014, a fifth of all the online transactions will be done by use of mobile. This will mean that 8 billion will be used to achieve the goal. According to the 4th Annual Mobile Mystery Shopping Study, the UK has the most developed mobile commerce in Europe. For example, 28% of mobile owners use their Smartphones to browse online stores that are near their residential places. Based on the increased number of mobile users, online retailers have benefited through increased sales and profits due to the high number of online consumers as well those visiting their premises. One of the notable areas of mobile commerce that has remarkable developed in the UK is mobile advertising. Based on the large number of consumers in UK and high demand for products due to the high household income as the result of high rate of employment, firms have adopted extensive advertising. UK mobile advertising doubled by £1bn in 2013. This was a 90% increase from the £526 million in 2012 according to eMarketer. One of the major aspects that have made mobile advertising to expand in the UK market is due to UK consumer’s love of devices. For example, Britain has the highest number of people with smartphone globally while tablets are common in the town. It is argued that with that rate in terms of the high number of smartphones in UK, digital ad market will grow will grow by approximately £8.5bn in the next two years with mobile set contributing £3bn of the total amount. As the use of digital advertising increases as well use of social sites to market the UK products, more than £279 billion amount of revenue is expected to be generated in 2014 with mobile advertising generating approximately half of the total income. According to eMarketer, mobile advertising in 2014 will overtake the newspaper in terms of revenue generation. This is due to the increased use of mobile by companies in their effort to create strong customer awareness. In the last seven years, the various forms of advertising in UK have continued to experience a decline regionally and nationally. For instance, in 2007 newspaper advertising revenue stood at £2.3 billion but this figure went down to 984 million in 2013. Additionally, the market share of the newspaper is deemed to fall by 13.8% in 2014. This implies that the mobile will take up that market share making it the first time the mobile advertising has eclipsed newspaper advertising. The development in m-commerce as well as mobile advertising is based on the high level of technology and stiff competition that has resulted to innovation. Additionally, by becoming one of the largest cities with expansive business activities, London has adopted quite a number of communication systems thus making the residents and companies admire the use of mobiles to communicate with their chain members. Despite the competition from other means of advertising such as digital bill boards, magazines and newspapers among others, mobile advertising remains a reliable instrument through which UK based companies will effectively compete with local and foreign companies. As an American manufacturer, I have a good chance of adopting the ever increasing use of mobile advertising in UK to ensure that my products effectively penetrate the UK market. One of the major strategies that I would adopt is to promote my brands by use of competition through smartphones as well as tablets. For example, the consumers will be provided with chances of winning a product or a smartphone once they make an online purchase. Despite the high demand for products in the US market as the result of high population, it is vital that US manufacturers embark on expanding internationally with an aim of increasing their sales as well as profits. Thus, by use of the mobile advertising in UK, more customers in the UK will become aware of my products resulting to the expansion of my market in addition to creation of strong positive customer brand relationship. As competition becomes stiff in the local and global markets, companies have turned to use of modern technology and innovation to produce products that meet the needs of their consumers. Similarly, the customers are more attracted to the firms that use modern technology either in the production process or during advertising. Based on the way the UK residents value mobile communication, they will be attracted to my firm an aspect that will result to increased sales and profits. Conclusion Based on the above discussion, it is clear that despite the competition that the traditional modes of marketing are offering the modern ways of doing business, technology and innovation have made been the key issue in the contemporary business world. Through m-commerce, local and foreign companies are able to link thus sharing of strategies. In the UK, m-commerce has significantly expanded due to the strong value that the local residents have placed on smartphones and tablets. Based on the large number of local residents who owns mobile phones and internet connections, firms have now taken the advantage of the situation resulting to extensive use of mobiles to advertise their products. While modern forms of advertising including use of tablets and smartphones is on an increase in UK, traditional methods of advertising such as newspaper, B2B magazines as well as radio and other outdoor advertising have also gone down in terms of usage and revenue. The expansive use of smartphones and tablets has not only resulted to the expansion of business transactions in London and other cities but also it has resulted to economic growth based on the high revenue generated by the mobile advertising. Works Cited Gartner. R. Smartphone Sales Accounted for 55 Percent of Overall Mobile Phone Sales in Third Quarter of 2013.USA: Stamford, 2013. Print. Internet Advertising Bureau UK. Available from http://www.iabuk.net/about/press/archive/tablet-ownership-up-63-as-uk-digital-ad-spend-hits-63bn Jason D . UK ad spend set to hit record £14bn. WPP buying arm forecasts revenues to top pre-crash level in 2013, with digital accounting for 44% of the market. Available from http://www.theguardian.com/media/2013/nov/25/uk-advertising-spend-hit-pre-crash-high Read More