Mobility

10 best practices for m-commerce for emerging markets

Let’s take a look at the best practices that e-commerce players in emerging countries must adopt to mobile-enable their business

E-commerce is gathering steam in emerging markets, and is seeing increased adoption by BRIC (Brazil, Russia, India and China) countries. Online shoppers in China today have surpassed the total population of USA. India is the second largest mobile market after China. Reliance changed the landscape of mobile market in India with affordable mobile services and is probably going to repeat it with a pan-India 4G roll out in the near future. With mobile phones reaching the masses, mobile commerce is poised to bring the next e-commerce revolution in India. Russia and Brazil are closely following their BRIC counterparts. Russians have disposable income and are fond of luxury and electronics items, while in Brazil, due to sluggish economy, online customers are looking for right priced products. However, one common thing in both countries is that they have good infrastructure, and the adult population that is connected to the Internet is making e-commerce mode of consumer purchases more and more viable over a period of time. 

International retailers are looking aggressively at India since it is uniquely placed. Indian mobile users are already aware of m-commerce in the form of ringtone downloads. So the much-needed trust factor associated with e-commerce and m-commerce already exists. It just needs to be taken to the next level.

In emerging economies the online payment landscape is yet to mature. India is a cash economy and electronic payment will still need some more time to be accepted by the masses. Credit card transactions are accepted by the urban masses, but alternative means of payment that are widely accepted (like PayPal in the U.S.) needs to become available for e-commerce to succeed in India. Even in urban population, credit card security is still a major concern with the mobile customers. Payment models like cash-on-delivery have been popular as an alternative mode of payment. Hindering the m-commerce growth in India are the restrictions on online payment companies like PayPal by central banks. The Reserve Bank of India has put a restriction of a transaction limit of USD 10,000 for export related remittances on PayPal. Also, retail consumers lack the awareness and have low trust levels with services like PayPal in India. Further, customers are reluctant to use credit cards on mobile phones due to security reasons. Hence, lack of payment options from mobile is challenging the widespread adoption of m-commerce in emerging economies.

Mobile phones have become a necessity. People today carry mobile phones along with their keys and wallets. The penetration of smartphones and tablets is rapidly increasing in BRIC countries. According to a survey by UM (formerly Universal McCann), smartphone penetration among Internet users is higher in the larger markets of China (59 percent), India (37 percent) and Brazil (35 percent) than in Russia (28 percent). This channel of communicating with the potential customer is forcing retailers to make their products available on mobile devices. E-commerce vendors expect a large portion of their business to flow from retail mobile applications that can be made available on customers’ hand-held devices.  The expectation is that m-commerce adoption will increase dramatically in the next few years.

The small screen size of hand-held devices is the single biggest challenge faced by the e-commerce companies to mobile-enable their applications. Online retailers have realized the need to develop consumer friendly mobile sites and make them available on devices of consumer choices to stay competitive and lead the race.

Following are the 10 best practices e-commerce players in BRIC countries must adopt to mobile-enable their business:

1. Need for store-based technologies with product scanning application: There are many applications available today that allow customers to scan products with their smart devices when they are in a store physically, e.g. RedLaser.  The camera on the smartphone scans the barcode on the product, searches the Internet and finds competitive pricing at online stores. SnapTell allows visual scanning to identify products from the images (without any barcodes). The app takes the picture of the product, compares it with a database of product images and also claims to have a high match rates. The app then provides a list where the product can be purchased online at a competitive price. Retail giant Wal-Mart is ramping up its in-store mobile Scan & Go program by empowering customers with the ability to clip coupons by tapping their smart phones and automatically applying the savings when checking out.

2. Need to have social media integrated on your site:  The current generation of young adults is hooked to social media, with millions of people sharing information, ideas and experience worldwide on social media. Many surveys indicate that if the customer has experienced a great online shopping experience, (s)he will invariably share reviews, rate products and comments on social platforms through his/ her mobile device. This is an era of connected customers, hence mobile ecommerce sites must essentially have social media integrated with m-commerce site irrespective of the industry.  Companies must display this valuable feedback on their sites since search engines typically use product rating and user experiences in search listings. For example, Hershey’s has integrated social media in their m-commerce sites.

3. Need for local language to be used:  Another trend indicates that the consumers in BRIC countries are more biased towards the vendors who provide their customer interface (website content) in native language given the low English proficiency level in these countries. For penetrating emerging markets international retailers are developing multilingual strategy and formalizing localized partnerships to assist in local language solutions for online retail launch and promotions. The local partners typically help with multilingual search engine optimization, translation services, customer services in local languages and e-commerce platform integration to allow local products to be made available on retailers’ websites. Research indicates that the most successful e-commerce players are the ones who will be able to connect to their customers in their native language, and on their preferred screen, anytime, anywhere providing a range of products at different price points. However, the only exception is the Indian market where this trend is still not seen, given that English level proficiency is high with urban population. If retailers have to penetrate the larger rural market, they will be forced to provide content in native languages. This challenge can further be complicated with more than 780 dialects being spoken in India. 

4. Need for a store locator service: It is important to include nearest retail store locator, when retail stores are part of the cross selling strategies. Many surveys indicate that customers look for store locators on mobile sites. Ensure that the store locators are postal code enabled and the customer can find the shortest route to the nearest store with a GPS enabled device. Today, multichannel retailers are exploiting the opportunity to better market their product based on current location of the customer. Macys, Sears, JC Penny and Walgreens are today marketing their store specific promotions based on the current location of the customer; the same products are also sometimes made available for purchase on the mobile site based on the promotion offer.

5. Need to have Mobile Driven Customer Service:  Quality customer service has always been a hall mark of good companies. Over the last couple of years, online customer service has gained momentum. Today, we see many companies have an integrated strategy for customer service in their business infrastructure. Research indicates that today most of the customers want to engage in a real-time conversation via Internet on their mobile devices, which has resulted in need for customer services which are mobile driven. Zappos has exploited the benefits using this approach of customer service via Twitter. Mobile driven customer service is today serving as a brand differentiator for many leading brands to be household companies worldwide.

6. Need to send alerts based on time and location, i.e. contextual alerts: Retailers today are engaging customers directly through their smartphone devices.  There is a trend where retailers consider mobile customers as one of the most loyal customer segment and hence need different attention.  Retailers today are experimenting with sending specialized offers based on customer preferences based on factors like style, time, day, location etc. than traditional web-based offers using other channels like e-mail, SMS, etc. However, the most effective channel would be time and location-based mobile alerts in the foreseeable future for retailers.  In Singapore, McDonalds with its partner Clear Channel provided dynamic display advertising for a free breakfast at the local McDonalds stores.

7. Need for the option to purchase in-store products: The Swedish clothing retailer H&M has added mobile commerce to its site and developed an application for consumers to download and shop on mobile phones. One of the unique things about this mobile store is that it allows customers to purchase products that are available in-store and also buy online-only products on their smart phones. This is typically a best practice only if a physical retail store also has e-commerce interest.

8. Need to connect with the customer using high resolution images/ videos: Online lifestyle retailer Myntra.com expects significant revenues to come from m-commerce transactions.  The company plans to launch the redesigned portal with mobile interface and a mobile application over the next couple of quarters. The biggest challenge the company faces like other fashion retailers is to recreate the online experience on a mobile device. Lifestyle shopping is all about high resolution image and videos, and the challenge is to get this correct on the small screen of a mobile device.

9. Need to make entire range of products available on m-commerce site: Mobile websites should not be used to provide an abbreviated set of offerings. Instead, they should be able to provide the entire range of services that would otherwise be available in a regular e-commerce web site. Australia’s leading furniture online retailer, Milan Direct has launched mobile website. The unique thing about the site is that it is up to date with the entire Milan direct range of products available on ecommerce site.

10. Need for search option at the landing page and need for suggested searches, tabulated displays, sorted results and multiple filtering options: Home pages when visited on mobile devices, help the customers in finding what they are primarily looking for, therefore, search icon is prominent.  Research indicates customers need search option and menu right at the landing page. Best Buy has developed navigation in a two-column layout and uses buttons instead of list items. Amazon and Macy’s use a mix of list driven menus and promotional content. Mobile customers are typically looking for suggested searches or autocomplete options, which displays the potential results as the customer types his requirements. The search box on Office Depot site brings this live to the customers.  The customers are looking for tabulated displays; they come in two patterns - a grid and a table display. Zappos shows the search results in a grid format, when the customer rolls over the image, it shows a larger photo of the image.  Jeevansathi, a popular Indian matrimony site, also uses this format. Customers are looking for sorted results along the numerical value of customer ratings. Wal-Mart and Sears site allow their customers to effectively sort results. Customers are looking for filtering options based on colour, size, and brand price. J.C. Penney has developed the site that offers menu of filters in a dropdown list while Kohl’s site has checkboxes for selecting the filter type.

Informed customers today are demanding accurate information on the go. Research indicates that the mobile users tend to leave the site quickly to another website if they do not find the required information from the mobile site. So a clear lesson to the retailers is that if you develop a non-mobile friendly website you are effectively driving the traffic to your competitor. A site that offers a great mobile experience has the chances to convert a visitor into a customer to make purchase. Having a mobile friendly site is not just about sales but it is about building your brand and nurturing customer relationship.

 

 

 

About Author

Dr. Prasad Ramanathan is Associate VP- Research & Innovation, iGATE Global Solutions and Ajit Mahajan is Sr. Manager Strategy & Research, Research & Innovation, iGATE Global Solutions

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