Mobile commerce creating opportunities for wealth
Google recently offered Groupon, a mcommerce company, $6 billion to gain control of the social buying platform. The offer was flatly refused as executives anticipate the mcommerce market to grow substantially in coming years.
According to a recent report from Seeking Alpha, mcommerce and social commerce initiatives are among the fastest growing in the world as consumers increasingly turn to their mobile phones to perform a number of retail, banking and money transfer activities. This growth comes in response to the wide-spread success of mobile devices that can access the internet, such as Apple's iPhone, which recently gained $7 billion in revenue for Apple that did not exist prior to the product's launch, Seeking Alpha reports. This growth is especially important, according to the news source, because it does not mark growth in an already established and profitable industry. Instead, it marks expansion into an entirely new and developing market for revenue expansion.
The news source cites Google's ineffective attempts to purchase both Facebook and Groupon over the years as evidence of this emerging market. Mcommerce is growing so quickly that relatively young companies, such as Facebook and Groupon, are refusing to sell to major online corporations in an effort to maximize their value as the industry expands. Furthermore, Seeking Alpha reports, the culture of established online giants could clash with these new companies to create major barriers to growth.
Many of the young, mcommerce and social commerce-centered organizations use a laid back, relaxed and creative culture to reach out to younger, tech-savvy audiences. Often, mergers between traditional corporate entities and these unique organizations create a cultural clash that damages business prospects, limiting overall growth potential.
Right now, growth potential is high, as mcommerce-related advertising is already surpassing that of television marketing. According to Seeking Alpha, televised advertising spending is expected to reach approximately $4 billion in 2011. This statistic represents 22 percent growth in the industry. However, the mobile advertising market, still in its relative infancy, is expected to generate approximately $10 billion in advertising spending for 2011.
According to a recent report from web hosting company Hostway, retailers neglecting to embrace mcommerce are putting themselves in a position to lose millions of dollars during the holiday season alone. The report predicts UK shoppers will spend more than $6.5 billion through mcommerce this year.