The shift to mcommerce in emerging economies

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The popularity of e-commerce – accelerated by the pandemic – has seen many Western markets saturated with online brands. Today, with some of the world’s youngest populations and fastest growing economies, many emerging markets are at the forefront of digital adoption.

With a smartphone penetration rate of just 44%, Brazil’s e-commerce sector has staggering growth potential, while already being the second fastest growing in the world.

Hootsuite and We Are Social’s State of the digital world in 2022 report shToday, 92.1% of global Internet users connect to the Internet with a mobile phone, including 90.7% with a smartphone. Emerging markets South Africa (97.7%), the Philippines (97.5%) and Brazil (97%) are among the top five countries with the highest number of users connected via their mobile.

Research also shows that 57.5% of global internet users buy a product or service online every week. Emerging Markets Thailand (66.5%), Turkey (65.7%) and Mexico (65.3%) rank among the top three countries with the highest percentage of weekly online purchases.

Mobile payments (e.g. Apple Pay) are also on the rise in emerging markets, with Saudi Arabia (35.5%), Thailand (34.3%) and India (33.9%) all being above the global average (25.5%) of Internet users who use mobile payment services each month.

In most economies, including emerging markets, the pandemic has accelerated the consumer push towards digital commerce

The reason for this? Competitively priced Android handsets allow consumers to get a mobile device much more cost-effectively than a desktop internet connection, says Dimitris Maniatis, CEO of Upstream, a mobile marketing platform provider focused on emerging markets. Indeed, Android represents nearly 90% of the mobile market in South America, 85% across Africa and 82% from Asia.

In addition, the cost of building physical network infrastructure involving copper and fiber optics is also prohibitive in many emerging markets, especially in more remote regions.

“Mobile networks are faster and cheaper to deploy, with issues like speed and latency that previously held back mobile connections, now far less intrusive than they used to be,” says Maniatis.

Arunabh Madhur is Regional Vice President and Head of EMEA Sales at SHAREit Group, which allows users to send rich media content such as files, music, pictures and games to other devices without using Wi-Fi or mobile data consumption. He says that despite the proliferation of smartphones and tablets, millions of people could be excluded from the benefits of digital payments and e-commerce. Therefore, it is in the interests of vendors and governments to find ways to include them.

“For mobile commerce to continue to grow, it’s increasingly important for brands to consider consumer data, design and behavior,” he explains. “With this insight, mcommerce is helping brands break into emerging economies, alongside established brands aiming to expand their footprint.”

That said, how to reach these consumers via mobile can be a challenge for businesses. But some technologies are making it easier to interact with consumers via mobile and helping to drive the growth of mobile-first commerce strategies in emerging markets. For example, rich communication services (RCS) are likely to play a bigger role in emerging markets given the popularity of RCS-enabled Android devices.

RCS enables brands to engage with consumers through photos, videos, carousels, and pop-up messages. With greater accuracy for personalized ads than third-party cookies, RCS can support a wider range of actions for consumers. For example, they can reply to messages, save events to their calendar, click to dial, or share their location.

Google actively promoting RCS, Juniper Research predicts that 3.8 billion people will subscribe to RCS services by 2026, up from 1.2 billion today.

“Combined with automated retargeting technology to send different and personalized messages to consumers, based on where they are in their purchase decision-making, RCS is a powerful way to grab consumers’ attention. and keep them engaged throughout the sales cycle. In Brazil alone, Upstream handles over 54 million RCS messages every month,” says Maniatis.

But despite skyrocketing smartphone adoption, basic handsets are still essential for billions of people. So, can “dumb” phone users still benefit from mcommerce apps? The answer is yes, with mobile payments accessible from devices through SMS technology and “quick” or “working” codes, as sometimes referred to as Unstructured Supplementary Service Data (USSD). USSD enables a real-time connection to the mobile network that can be used for browsing, banking, and location-based services.

Can “dumb” phone users still benefit from mcommerce apps? The answer is yes’

“USSD and SMS messaging create a way to provide the unbanked with mobile-neutral access to basic banking services on mobile phones, without any internet coverage and without consuming data or call credit,” says Ilyas. Berrajâa, Global Growth Director. payment processing company CPC in the Middle East and Africa.

Barrajaa adds that the “phygital” model can also help users in emerging markets access mobile payment services. Phygital describes the blending of physical and digital and the resulting opportunities for brands to attract and retain customers. Thus, people use a mobile channel to access services but turn to an agent network when needed. The Bank of Africa, for example, offers mobile payment services to support financial inclusion in low-banking countries.

In most economies, including emerging markets, the pandemic has accelerated the consumer push towards digital commerce. Many consumers are unlikely to return to making as many physical transactions as before the pandemic.

“For brands looking to grow their presence in an emerging economy, the high and growing number of smartphone users, combined with rising disposable income and demand for goods and services, makes mobile commerce strategies challenging. essential if they are to have an impact,” says Maniatis.

Deploying a strategy that incorporates mobile marketing channels such as RCS will help ensure brands can engage with the growing number of potential consumers living in emerging markets.


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