Vast Potential Market For Mobile Commerce Waiting To Be Reached
AdAge China reports on a new study that finds mobile web users in China have outnumbered those in the U.S. — not entirely surprising, since the number of mobile phone users in China outnumbers the entire US population, but still significant.
Of 57 million people with web-enabled mobile phones in the U.S., 18 million, or about 31%, use the devices to connect to the internet. Of 182 million people with web-enabled mobile phones in China, 102 million (56%) use them for web-surfing.
In China, people spend more of their monthly income–about 2-3%–for voice and data plans, compared to about 1% in the U.S. However, fees for premium content tend to be lower in China. A song typically costs a dollar in the U.S., but might cost a quarter in China.
More than 10% of Chinese discover web services through the phone first and then migrate to the computer.
Business-wise, a huge opportunity exists if companies can figure out the best way to tap into this massive but still-developing market. Like the article says, premium content on Chinese phones is cheap relative to the American market, but aside from purchasing music, ringtones, and other very low-priced items, how will companies convince Chinese mobile web users to use their internet-enabled handsets to purchase higher-priced items?
Since Chinese mobile carriers have typically worked out payment to simply deduct from users’ prepaid cards (the preferred method of handset payment in China, unlike the US where users tend to sign up for multiyear contracts), something akin to Apple’s proprietary iPhone App Store may be the key, although it remains to be seen how apt Chinese users will be to purchase premium content over their phones with debit or credit cards (since most young handset owners do not have credit cards to begin with). Also, since China has (officially) banned wi-fi in handsets, many potential online shoppers will be less willing to do so over their mobile phones, for efficiency’s sake.
I’m going to go out on a limb and assume the big Chinese online business powerhouses like Taobao and Baidu might have projects in the works designed to tap this potential e-commerce market. Since most Chinese mobile web users are using their handsets’ functions for day-to-day functions like checking email, downloading music, and reading news sites over online shopping, an entire market segment, larger than the entire US population (with Canada thrown in, t0 boot) is just waiting to part with their cash — if only mobile carriers and online retailers can figure out how to get them to go beyond spending a few kuai on individual songs. No small task.