The mobile Internet is creating entirely new businesses and business models, as well as transforming traditional companies. All kinds of businesses are using mobile technologies to improve operations, cut costs, and reach new markets and customers. The digital economy is flourishing on mobile devices as consumers access and buy apps, music, videos, books, magazines, and other content anytime from anywhere and receive many purchases instantly. They can also buy physical goods on the go using dedicated retailer apps from brick-and-mortar stores such as Walmart, Belle International, and Cromā or from online shopping platforms such as Amazon, Rakuten, and Taobao.
The app economy is flourishing. There have been more than 200 billion cumulative downloads of mobile apps from the various app stores since 2008. The rate of growth is mind-boggling: more than 100 billion downloads took place in 2013 alone. The app economy already contributes $26 billion to GDP and has created some 800,000 jobs in the 13 countries in our sample.
Payment apps are increasingly popular, and some businesses are cutting out the cash register altogether (DASH, GoCardless, Uber, and Hailo, for example.) There are more mobile bank accounts in Kenya than in Kansas, but banks in the U.S. and other developed markets are using mobile apps to transform the banking experience for consumers (you can deposit a check by taking a picture)—and are winning plaudits from their customers in the process.
Retailers are embracing m-commerce. With 10 percent of mobile purchases from Wal-mart now happening at stores, CEO Doug McMillon told the 2014 Code Conference that his company is moving to “geo-fence” and “price-promote” store by store—essentially turning each of the company’s 11,000 stores into its own multichannel shopping environment with its own product and price promotions. According to Walmart, customers viewed more than 1.5 billion pages on its site during the five days between Thanksgiving and Cyber Monday in November 2014, with about 70 percent of this traffic coming from mobile devices. The Subway restaurant chain uses geotargeting technology to send notifications of personalized deals to Subcard owners’ phones when these customers are near a store. France’s Groupe Casino employs near-field communication (NFC) tags on shelves to help visually impaired customers download product information to their phones. It also uses NFC technology to help all customers track costs and speed up checkout.
Some 60 percent of global mobile consumers use mobile devices as their primary or exclusive means of going online, and more than 80 percent of these people say they will make a purchase on a mobile device in the next 12 months, according to InMobi, a mobile advertising company. Forrester Research expects that m-commerce sales will have made up 29 percent of U.S. consumers’ online purchases in 2014, up from 21 percent the previous year. Our research shows m-commerce in the U.S. jumping 60 percent, from $72 billion in 2013 to $115 billion in 2014, and continuing to rise to $245 billion in 2017. Projected growth rates in developing markets are even more dramatic. In India, m-commerce will grow from $6 billion in 2013 to more than $14 billion in 2017. M-commerce in Brazil is projected to have grown 96 percent 2014 and will exceed $5 billion by 2017. In China, m-commerce will grow from $30 billion in 2013 to more than $160 billion by 2017. On November 11, 2014—Singles’ Day, China’s biggest shopping day of the year—mobile shopping sites handled 1 billion yuan ($163 million) in transactions in the first hour. Total merchandise sales volume settled through Alipay (Alibaba’s e-payment affiliate) was approximately $4 billion (24.3 yuan), or 43 percent of all merchandise volume—double the 21 percent volume in 2013.
It’s not just a retail phenomenon, either. All kinds of businesses are finding innovative ways to put mobile devices and technologies to work. According to one survey in the U.S., more than 85 percent of B2B customers access content on their mobile devices. Another survey found that at least 50 percent read reviews, access product information, and compare features using mobile devices. While m-commerce currently accounts for only 3 to 5 percent of B2B sales, these numbers are bound to grow as more users apply the lessons of the B2C marketplace to their businesses. IDC calculates that 14 percent of all tablet shipments in 2014 (which it estimates at about 245 million) went to commercial organizations, up from 11 percent in 2013. It expects the percentage of commercial shipments to increase to 18 percent by 2018.