Internet Retailer releases its 2014 Mobile 500.
Mark Brohan , Research Director
It took several years of market development and a big uptick in the number of consumers using their smartphones, tablets and the mobile web to shop online, but mobile commerce in the U.S. is now mainstream commerce, according to data published in Internet Retailer’s newly released 2014 Mobile 500.
In 2013, mobile retail sales for the 358 U.S. merchants ranked in the Mobile 500 will grow about 67% and reach $25.4 billion, up from $15.2 billion in 2012. When the $8.8 billion in U.S. mobile commerce sales for eBay are included, total U.S. mobile retail sales will grow about 64% to $34.2 billion this year from $20.9 billion in 2012, according to the Mobile 500.
Overall sales for all merchants ranked in the Mobile 500, including those based outside the U.S., will increase about 71% to $30.5 billion in 2013 from $17.8 billion in 2012. U.S. e-retailers dominate the global mobile commerce business performed through in-house mobile commerce platforms, according to Internet Retailer’s research. The 358 U.S. mobile retail sites ranked in the new guide account for 83% of the mobile commerce revenue generated by the world’s largest 500 mobile commerce and mobile retail competitors. The 107 European merchants ranked in the Mobile 500 together will generate $4.4 billion in mobile sales, and though these retailers clearly trail the U.S. merchants in mobile, they are growing their mobile sales 103% this year as they attempt to close the significant gap between them and their U.S. rivals. The 19 Asian e-retailers ranked in the new guide collectively account for $528 million in mobile sales and are growing at 85%.
The total m-commerce sales of all Mobile 500 merchants account for about 36% of the $85 billion of the global mobile commerce business performed by retailers. Virtually all of the rest consists of commerce performed by third-party mobile marketplace platforms, such as e-Bay, Alibaba, MercadoLibre and Rakuten, which process the mobile commerce transactions of their e-retailing clients. Led by Alibaba, these three collectively will process $53 billion in mobile retail sales, up nearly 90% from last year. In Asia, these marketplaces remain the dominant players in mobile commerce, but in the U.S. the mobile market is clearly shifting from third-party marketplaces to retailer-owned mobile commerce platforms.
In the early stages of mobile commerce it was eBay that pioneered the market with advanced apps and convenient mobile payments options from its PayPal unit that enabled many U.S. web merchants of all sizes to launch a mobile commerce program. But today the rest of the industry has caught up, and retailers are growing their sales through their own mobile sites and apps faster than eBay.
In 2013, eBay’s U.S. mobile retail sales will increase by about 54% to $8.8 billion from $5.7 billion in the prior year. While that’s strong growth from a substantial base, eBay isn’t growing as fast as the total U.S. mobile commerce market, which, when mobile retail, ticketing and travel are included, increased 67% in 2013 to $41.8 billion, the Mobile 500 finds. What’s more, 311 U.S. merchants ranked in the Mobile 500 will grow their mobile sales this year faster than eBay, and 288 of them met or exceeded the 67% growth in all U.S. mobile commerce sales.
Big web merchants continue to grow their mobile retail sales at a brisk pace. Apple, No. 1 in the Mobile 500, will grow its total mobile sales about 25% in 2013 to $8.4 billion. The device maker and digital content retailer upgraded its App Store this year with enhanced search capabilities and a new wish list feature, and updated iTunes by adding the ability to redeem Apple gift cards by snapping a picture of a card with an iPhone’s camera. The No. 2 Mobile 500 retailer, Amazon.com, grew even faster than Apple, doubling its mobiles sales to $8 billion in 2013, according to an estimate in the 2014 Mobile 500.
Continuous innovation is the key to Amazon’s success. For example, earlier this year Amazon launched Mobile Associates API, or application programming interface, which enables mobile app developers to sell physical goods within their apps via Amazon; developers get a 6% cut of sales.
Amazon can offer consumers a much broader mobile shopping experience than most other retailers because of its big inventory, competitive prices, free or lower-cost shipping, one-touch mobile checkout, and an app that enables consumers to scan product bar codes in competitors’ bricks-and-mortar stores to easily check Amazon for a better price, says longtime Amazon observer and ChannelAdvisor CEO Scot Wingo. “A consumer can visit any other mobile site and, even if they’ve registered there before, the experience won’t be as frictionless as it is on Amazon,” Wingo says. “Amazon really does set a very high bar on these things.”
But mobile commerce success isn’t just the sole domain of the biggest web merchants, the Mobile 500 finds. Market America (No. 250) is the fastest-growing merchant in the 2014 Mobile 500 with mobile commerce revenue that will grow nearly 600% to $7.4 million in 2013. Market America attributes its mobile growth to a vastly expanded product inventory and updated versions of its mobile app, which the company says accounts for about 20% of its mobile commerce sales.
For some Mobile 500 merchants, mobile commerce isn’t just the fastest-growing portion of their e-commerce program, it’s also becoming the biggest. Already mobile commerce accounts for 40%, about $260 million, of sales at web-only flash-sale merchant RueLaLa.com (No. 11). Mobile could account for as much as 60% of sales as soon as next year, the retailer says. Flash-sale retailers do particularly well in mobile commerce because they offer goods for a limited time, making it particularly convenient for a shopper to make her purchase on a mobile phone before the sale ends.
With a lot of its future growth hinging on mobile commerce, RueLaLa.com is becoming a “mobile-first” company, says vice president of mobile Michael Putnam. Retailers that adopt the mobile-first philosophy typically first consider how a change will affect smartphone and tablet shoppers, and let mobile design changes guide revisions to their desktop sites. “Our customers are going more mobile all the time and we are going where they are,” Putnam says. “We have made mobile commerce a strategic priority, it’s been a huge change for the business.”
More data and analysis on how U.S. web merchants are launching or expanding their mobile commerce programs is available in The 2014 Mobile 500. The research publication is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order is available here.