Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
In the wake of high-profile deals—including Facebook’s purchase of WhatsApp for $19 billion and Rakuten’s purchase of Viber Media for $900 million—retailers need a presence on mobile messaging apps to stay relevant with the increasing number of consumers who use them, Forrester says.
Forrester Research Inc. analyst Julie Ask wants retailers to accept two hard-to-swallow truths: Most of your customers will not visit your mobile commerce site and even fewer will download your retail app.
That’s not for lack of consumers using smartphones, however—it’s quite the opposite. Increasingly, Ask says, consumers are turning to a handful of mobile applications that meet their daily needs, including maps, social media and mobile messaging apps—the latter being one of the fastest-growing worldwide, though still largely unexplored by U.S. retailers.
Mobile messaging apps make it more convenient and more fun for consumers to chat with friends and relatives than the messaging tools that come pre-installed on most smartphones, Ask says. For instance, some allow consumers to create and save chat groups and enable better sharing of videos, images and music. Some provide special features like digital “stickers”—images far more complex and detailed than a smiley or frowning face—which Ask describes as “emoticons on steroids.”
Such messaging apps are already extremely popular internationally, though they are just starting to take off in the United States. That’s one reason why U.S. commentators were shocked by Facebook Inc.’s recent $19 billion acquisition of WhatsApp, one of the most popular messaging apps. That deal was quickly followed by Japanese e-marketplace giant Rakuten Inc. buying messaging app provider Viber Media for $900 million. About 22% of U.S. adults with Internet access use a mobile messaging app daily, Forrester says.
Ask outlines what retailers need to know about mobile messaging apps and their ever-growing usefulness for e-commerce in a new Forrester report entitled, “Mobile’s Trojan Horse: The Messaging Platform.”
For one thing, mobile messaging apps already enable brands to reach customers with marketing messages. Brands including Nike and Coca-Cola successfully generate buzz about new products within mobile messaging apps, which usually allow consumers to opt in to follow brands’ communications, Ask writes.
Retailers can also sell through mobile messaging apps. Maybelline, for example, sold 500 lipsticks in five minutes to Thai consumers after hosting a limited-time sale on Line Mall, the e-commerce marketplace launched and hosted by Japanese mobile messaging app Line, according to the Forrester report. Line Mall collects 10% of the revenue generated on its marketplace. Similarly, Chinese mobile phone maker Xiaomi sold 150,000 smartphones via the WeChat mobile messaging platform, which is owned by Chinese social-mobile technology provider Tencent Holdings Limited.
The numbers are large in part because international consumers so frequently use mobile messaging apps, the report explains. On average, WhatsApp users spend 200 minutes per week using the app, and both WeChat and Line draw about 100 minutes per week from users on average, the report says.
For retailers that can afford the investment, Ask suggests the fastest route to getting into mobile messaging apps is to take a cue from Rakuten and buy one. Short of that, retailers can download one of the more popular messaging apps and begin to experiment with ways to add in-app marketing to their mobile strategies, she says.