Retail, Food, and Finance Going Mobile | EMQQ
Thanks to the advent of Mobile devices, many things have
become more readily available to consumers than ever before. People no longer
even have to leave their houses to go shopping for items such as clothes or
food. Other industries have become more streamlined due to mobile devices as
well, such as banking and travel. According to a report put together by App
Annie many different sectors of the mobile retail market are experiencing solid
The same report highlighted how the growth of mobile
has impacted various industries.
Retail a Prime Beneficiary of the Growth of Mobile
People are spending more time on shopping apps,
approximately 18 billion hours in 2018, which was a 45% increase from 2016.
This increase in time spent on shopping apps has been propelled by users in
emerging markets such as Thailand, which saw a 465% increase in time spent on
shopping apps from 2016-2018.
People Spending More Time On Apps Has
a Strong Correlation with Increased Sales
This increase in time spent on Shopping apps bodes
well for the mobile market, as there is an extremely strong correlation between
time spent on an app and e-commerce sales. It is estimated that at the current
rate of growth, mobile will comprise nearly 75% of all e-commerce sales by
Who May Benefit from This Growth?
Ecommerce companies in emerging market countries such
as China and India may benefit from this increase in time spent and revenue
generated on mobile shopping apps. Specifically, companies such as Alibaba, who
deal heavily in apps may benefit from the growth in online retail. Other
companies such as JD.com, MercadoLibre, Tencent, and Baidu may also benefit
from an increase in mobile retail as well.
Food from Your Phone
Food delivery apps fill a need for many people, which
is one of the reasons for their rapid growth. Orders through food apps
increased 130% worldwide from 2016-2018, highlighting the importance of
convenience to many consumers. Food delivery and orders are not the only
aspects of food apps. Many chain restaurants now have loyalty reward
programs through apps to incentivize customers to purchase their products more
frequently. Companies like Delivery Hero may be able to take advantage of
consumers prioritising convenience in their daily lives.
Mobile Banking Bringing Convenience
Global downloads of finance and banking apps rose to
3.4 billion in 2018, a 75% increase from 2016. Emerging markets such as
Indonesia, who experienced a 400% increase, have helped fuel this growth.
Mobile is bringing banking to emerging markets where the population generally
does not have the same access to banking services available in developed
markets. Average users check their banking apps approximately once a day, which
showcases the ability of banking apps to become a part of a user’s everyday
routine. Companies with mobile pay apps such as Alibaba’s strategic partner,
Ant Financial (Alipay), WeChat Pay (Tencent), and
MercadoPago (MercadoLibre) will benefit from more people wanting to access
Fintech Apps Finding Popularity
Fintech also has worked its way into becoming part of
the user’s daily routines with many users checking stocks and other financial
information. It is also a new way for people to pay in-store by scanning a code
linked to their online wallet, capitalising on consumer’s desires for
convenience. Fintech companies such as Venmo, who announced they are coming out
with a debit card, are beginning to move into consumer banking and represent a
disruptive threat to the traditional retail banking industry. This disruption
could spur growth innovation in the industry. Both Alibaba and Ctrip have
introduced loyalty programs for their customers to promote using their services
Travel Apps are the New Travel
Another category of mobile apps that has experienced
solid growth (50% from 2016-2018) is travel and navigation apps. Mobile has
become the new travel agency for many users due to its convenience and centralisation
of everything the consumer needs to plan their travel. Airlines have benefited
from apps as well as they are now able to improve the customer experience and
promote loyalty through reward programs. Two of the largest online travel
companies in China are Ctrip.com and Fliggy, which is a unit of Alibaba
Transportation apps such as car sharing and bike/scooter rental apps have shown
growth as well, car apps are up 25% YoY and bike/scooter rentals are up 530%.
These two forms of transportation evolved completely due to the increase in
popularity of mobile apps. Alibaba and Tencent are both part of a group of
companies that are investing 1.45 billion in a new ridesharing venture in
Mobile has permeated every area of consumers daily routine
from ordering dinner to checking stocks. Consumers are now able to perform
tasks in a much more time efficient manner thanks to various apps. The use of
mobile devices is increasing in both time and versatility and does not appear
to be showing signs of slowing down.
Find out more about the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) here.
Read our EMQQ Whitepaper "The Great Confluence" here.
As of 6th August 2019, the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) held 7.95% of it's weight in Tencent, 7.79% in Alibaba, 6.73% in Mercadolibre, 5.35% in Baidu, 5.06% in JD.com and 4.36% in Ctrip.com.
Article Date: 7th August 2019.