Mobile commerce (m-commerce) in Malaysia is one of those trends that beg to deceive. Many industry players have been predicting its popularity since mid-2005, including then chief executive officer of a large mobile telco who excitedly called m-commerce “the store in your pocket.”
That “store” may be within reach of our fingertips but there is yet no widespread indication that consumers are ready to let their fingers do any serious shopping via the mobile. However recent data from PayPal does indicate that m-commerce in Malaysia has risen sharply, albeit from a low base. The research indicates a sharp rise over the past two years, recording close to a fourfold increase from 2010 to 2011.
Data released this past June by the payment provider revealed that m-commerce spending in Malaysia increased 370% from RM101 million to RM467 million.
There are other supporting signs: Research firm Nielsen released highlights of its Smartphone Insights Malaysia in May which estimated that smartphone penetration rate in Malaysia is at 27%.
Furthermore Hanisa Harun’s observation was important. The global executive director of Nielsen’s Telecom Practice said, “Smartphones present opportunities for growth across a range of sectors, but companies must realise that users’ engagement with their phones is fundamentally different and deeper than feature phone users, and different again from how they use their PCs and laptops.”
Indeed Arsyan Ismail, who has just launched a startup, http://ked.ai, a garage sale market place, points to the fact that while the potential is clearly there, “there are a number of limiting factors.”
The big one revolves user experience – that all critical aspect that will determine if a user found it convenient and easy to browse and then pay for something via their mobile. Here, we have moved beyond ring tone and value-added services purchases which are conducted via SMS and which were regarded as the first wave of m-commerce.
Arsyan notes that mobile payment gateways still don’t provide an interface that can be customised to suit the apps user interface and user experience. According to him, these ‘mobile’ versions of the payment gateway only provide a ‘simpler’ version of the payment gateway interface. “I can tell you this is an absolute turn-off to the developers building the app, and also disrupts the entire user experience of the app,” he cautions.
Another challenge is that in working to overcome consumer concerns about security, the process for making payments has become too cumbersome. “An experience like 1-click buy (patented by Amazon.com) is unavailable here because of the layers of security,” notes Arsyan. He suggests that a layer of security called mobile secure online shopping code or MSOS be an opt-in instead of mandatory to cut down on the number of steps the user has to deal with.
Another long standing grouse that merchants have over m-commerce taking off is that telco data charges are still too high.
This aside, user behaviour online shows a clear trend that consumers have gotten more comfortable paying via their mobile. But a number of issues still need to be sorted out before more companies invest and focus on m-commerce.
Currently anecdotal evidence from the mobile operators shows that movie tickets are the most popular purchases by far. Another popular purchase is what is called “in app” purchase for virtual items in most online games.
Indeed the top three mobile spending categories, according to the PayPal commissioned study in 2011 were movie tickets, fashion and accessories, and books.
The top three places where Malaysians make their mobile purchases were at home, the office and at educational institutions.
Dare we say the future is bright, finally, for m-commerce? What do you think?
Photo credit: Flickr user Stephan Geyer