The mobile commerce has emerged as the most important trend shaping the retail landscape and is being driven by two trends: (1) The rapid growth in smartphone and tablet ownership, and (2) the rapid acceptance of using these platforms as a shopping channel.
Smartphone sales have grown exponentially since their introduction 10 years ago. Over the past three years the total number of U.S. smartphone subscribers has doubled to over 135 million. In addition, more than 60 million people own a tablet device despite the segment’s introduction only a few years ago.
The advent of these new platforms led to digital media consumption to nearly double over the past three years.
Rapid growth in mobile commerce
Mobile is becoming an increasingly important channel for retailers. Today, smartphones and tablets account for almost half of digital time spent on retail websites and applications.
This development has resulted in a explosion in mobile commerce. Since 2011, mobile sales have increased almost three fold to $38.4 billion annually. According to estimates provided by eMarketer, mobile sales could double by 2016 to $86.9 billion.
Mobile commerce is the fastest growing channel in retail. During the first quarter of 2013, total retail sales increased only 1% year-over-year. In contrast, mobile commerce posted 31% sales growth during the same period.
Because mobile is growing so fast, it’s becoming an increasingly important part of the broader eCommerce category. In 2011, mobile accounted for less than 7% of total eCommerce sales in the United States. By 2016, mobile commerce will account for nearly a quarter of online business.
Tablets have become the most important platform in mobile commerce with U.S. consumers spending $13.9 billion on these devices in 2012. Sales on smartphones are lower reaching $9.9 billion last year. Other devices, like eReaders, hold only a small share in the mobile marketplace.
Opportunities for investors
So how can investors play the mobile boom?
eCommerce giant Amazon.com, Inc. (NASDAQ:AMZN) is the top pick. Amazon.com, Inc. (NASDAQ:AMZN) was one of the first to spot the potential in mobile commerce and is now leading the industry in innovation and sales. According to estimates from Citigroup Inc (NYSE:C), the company generates $3 billion-$5 billion from mobile devices accounting for roughly 8% of Amazon.com, Inc. (NASDAQ:AMZN)’s sales. These figures will grow substantially as the category matures.
eBay Inc (NASDAQ:EBAY) has become nearly a pure play on the mobile revolution. The company has the strongest suite of mobile commerce products between its PayPal and marketplace businesses. Last year, one in three eBay Inc (NASDAQ:EBAY) transactions involved a mobile device and the company processed $10 billion mobile payments. That processing figure could double in 2013. In addition, eBay Inc (NASDAQ:EBAY) is also using PayPal to help other retailers develop their mobile shopping platforms.
Of course eBay is facing challenges. Google Inc (NASDAQ:GOOG) is boosting its eCommerce presence through the creation of Google Inc (NASDAQ:GOOG) Wallet. This service is a fast, secure way to buy from stores across the web using a single username and password. Just like eBay Inc (NASDAQ:EBAY)‘s digital wallet, users will be able to use one account for any purchases both online and in-store.
Will Google Inc (NASDAQ:GOOG) be successful? The company is rolling out this service on its Gmail platform giving them instant access to nearly 500 million users. Overnight Google Inc (NASDAQ:GOOG) Wallet has become five times larger than PayPal.
The article The Mobile Commerce Boom in 7 Charts originally appeared on Fool.com and is written by Robert Baillieul.
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