Mobile Commerce A-Z: How Turkish Commerce Evolves with Mobile [REPORT]

What started as barter evolved into shops and penetrated digitally into our household via the computer. And now it’s in the pocket. The latest stage of this evolution is MOBILE COMMERCE.

The times when being on the go meant being disconnected or having limited tools at your disposal are over. It’s even advantageous to be mobile. Taking that further, there is probably not many of us who would not be like fish out of water if our mobile devices were taken away for the day. We don’t leave the house without them. The first thing we do in the morning is to reach out for them. In the traffic, on the line, even as we are staring into the almighty TV, the mobile screen is in front of us.

Nobody deny it; numbers don’t lie! According to Information Technology and Communication Board (BTK), mobile internet traffic in Turkey rose by 359% in 2011. DORInsight’s report for BTK^TR based on numbers from Turkish Statistical Institute (TÜİK) indicate that, in the first quarter of 2012, 23.7% of Turkish internet users preferred mobile phones, 15.6% preferred laptops, and 1.3% preferred touchscreen tablets to go online outside of home or work. Another fact from the same report: “In the second quarter of 2012, the number of registered internet users saw a quarterly growth of 10.2%; and increase in the number of fiber, cable, and especially mobile users helped keep the upwards trend.”

What is mobile commerce, and what does it require?

It is not easy anymore to distinguish different types of shopping. Online shopping includes both mobile shopping and transactions over laptops or desktops. In order to label a transaction mobile, it does not have to start or end on mobile. One can buy a product introduced over a phone in a store, or spot an item at a mall and buy it on a tablet. Of course, all of it can take place on mobile. These are all valid examples of mobile commerce.

The industry professionals we consulted agree. “In the case of Yemeksepeti, most of the ‘real financial transaction’ takes place at the client’s door, between the restaurant and the client; but the order is placed on mobile. Just as there are big differences between selling at a store and e-commerce, mobile commerce has its own dynamics,” says Yemeksepeti founder Nevzat Aydın. He notes that the entire dynamics and flow of the process changes in the transition to a significantly smaller screen than the laptop. For example, some information that can easily be provided on a website or even necessary steps to finalize an order have to be taken out or simplified. Mobile users absolutely prefer simplicity and speed. The second main difference is in communicating with mobile users, adds Aydın, “Mobile ads, e-mail optimizations, SMS campaigns, and push notifications—which I expect will be much more popular in the future—are some examples.”

These differences end up being the competitive advantage of the market, of course. As Mobilexpress General Manager Zeynep Şener notes, the underlying principle of mobile shopping is the customer’s ability to fulfill instantly a desire or need that might arise.

“L’Oréal allows clients to buy cosmetics in NYC cabs through SnapTags embedded in video ads. Kenneth Cole placed QR codes in the company’s Father’s Day campaign to actualize sales from within newspaper ads. Even Lufthansa directs clients from magazine and newspaper ads to a screen where they can buy tickets,” says Şener.

In September, 15% of all orders at Yemeksepeti came from mobile apps or browsers

The rapid growth of e-commerce and the quick and easy adaptation of the Turkish consumers to new technologies increases the mobile market’s appetite. What started as the purchase of a few apps and games quickly evolved into a full-fledged mobile market. Shopping from eBay over a tablet and checking out from PayPal is no longer a foreign affair; Turkey’s development in this field points to serious progress, growth, and even an explosion.

For example, in September, 15% of all orders at Yemeksepeti came from mobile apps or browsers. In August, this number was around 13%. Aydın estimates that this figure will rise from its 6% share in 2011 to 18% by the end of 2012. That would be a growth of 200%.

Mobile Service Provider Buisnessmen’s Association (MOBİLSİAD) Board Member Kubilay Erdoğan is hopeful for the future of the market: “I expect mobile commerce, which constitutes 6% of the market right now, to grow to 10-12% by the end of 2013, and 50% in 2015.”

Estimates place the number of mobile shoppers to 73 million worldwide

Pozitron Founding Member Fatih İşbecer remarks that reported number of European m-consumers is 8 million. Estimates place the number of mobile shoppers to 73 million worldwide. In the US, the amount of mobile shopping transactions rose by 91% in 2011, and 73% in 2012; 50% growth is expected in 2013. Şener agrees with İşbecer, and adds that approximately 10% of all e-commerce will come from mobile in 2012, at $21b. As expected, smartphones and tablets constitute the bulk of this market. More than 50% of cellphone owners have switched to smartphones. When we look at Turkey, we see that e-commerce has caught up with the global growth and mobile is moving up. Despite that the smartphone adoption in around 15%, the mobile market can become the shining beacon of the sector. This new and eager market should face rapid growth in Turkey.

Mobile payments moving towards TL 200m mark in 2012

GittiGidiyor/eBay Turkey Head of Marketplaces Ömür Topaç is both ambitious and hopeful about mobile commerce. He believes GittiGidiyor will see rapid growth. “We can easily say that the growth of GittiGidiyor on mobile is greater than growth in other platforms,” and adds that the ideal platform for “buying” is a smartphone, and a tablet is ideal for “shopping”. Beyond the shopping experience lies the payments, where mobile payment systems come into the picture.

As mobile commerce takes off, mobile payment systems have to keep up; and they do. Mikro Ödeme CEO Alper Akcan predicts that that the mobile payments market, which was at TL100m in 2011, is moving towards the TL200m mark in 2012.

Şener comments on the shortcomings of mobile payments. “The reason behind the slow adoption of mobile payment system globally, including NFC, are overly complex applications and the lack of necessary hardware in the phones.” Despite this, the global mobile payments volume is expected to reach $172b in 2012, according to Gartner’s report. As a result, easier, high-security solutions based on current working technologies that offer consumers the shopping conveniences like paying in installments are ready for a big take-off.

From e-commerce to m-commerce

M-commerce is a new channel for the e-commerce giants of Turkey, like limango. limango IT Director Hakan Erdoğan says that they are working on the transition to mobile. limango is preparing not a mobile site for smartphones and tablets, but apps and campaigns targeted specifically to mobile users. Erdoğan cites the Interbank Card Center (BKM) figures to make his point: “According to numbers from BKM, the mobile turnover has grown by 57% in 2011, reaching TL22.9b. Projections show a similar trend this year. Such rapid growth in e-commerce shows how much consumer habits have changed. Equally, it is impossible to overlook the volume of purchases on mobile devices. Based on these, 2012-13 should be the year m-commerce shines.”

Let us turn to what the industry leaders have to say about this emerging market.

[heading style=”1″]M-Commerce as the Next Big Step for e-Commerce[/heading]

Ömür Topaç, Head of Marketplaces, GittiGidiyor/eBay Turkey

The main vehicle of mobile and m-commerce, the smartphone, points to a conjunction of online and offline commerce on a macro scale where the differences disappear. We embrace this vision as eBay and we are motivated to develop strategies on it. Consequently, m-commerce offers us a model far exceeding this, a new inclination and era. By the way, it is not right to limit mobile devices to smartphones and tablets. Actually, the first cases of m-commerce was for buying ringtones for not so smart phones.

When we look at the current m-commerce cases, we are faced with a multitude of models and flow variations. The flow might turn out to be paying for the morning coffee via the mobile device in a brick-and-mortar shop, or paying cold cash for a sale triggered through location. What should not be overlooked here is just how essential a role mobile devices have in these commerce models and scenarios.

Location-aware m-commerce apps

Instead of treating it as a trend, it is important to see m-commerce as the next big step for e-commerce. Without a doubt, beyond all the perks of e-commerce, the most important aspect of m-commerce is allowing transactions regardless of location. Thanks to m-commerce, any company offering goods or services get the opportunity to turn any potential buyer into an actual client, anytime, anywhere. Not only does this create an immense potential mass, but it also expands the potential window to actualize a sale. Another important aspect of m-commerce is the ability to create a nonexistent opportunity or need at any moment through location. Location-aware m-commerce apps are the best example of this.

We can easily say that the growth of GittiGidiyor on mobile is greater than growth in other platforms. We will be launching completely redesigned apps for iPhone and Android. Our users will also be able to experience GittiGidiyor on tablets before New Year. Based on these developments, we foresee a faster growth in mobile.

Gaming is the leader in m-commerce

On a national scale, the shining star of digital goods is the gaming industry in the form of apps and in-app purchases. When it comes to physical goods, m-commerce is synchronous with e-commerce, but it is too early to speak of a scaled volume. We will face the developments together. Globally, especially in the American market, we witness a huge digital goods market that is scaled differently from ours. In this field—especially clustered around iTunes as primarily MP3s—music, movies, TV shows, and e-books have created an unfathomable volume. The physical good volume too is high and keeps on growing. Fashion accompanies technology in this upwards trend. Another fact of this product-centric market, mobile payment solutions take a considerable slice of the cake by offering services to all the sectors. We will witness a similar inclination on a national scale, soon.

GittiGidiyor will show record growth

The growth of m-commerce is and will be significantly greater than the growth of e-commerce. The reason is clear: the base on which the growth is measured is currently very tiny. Still, let’s not forget that we formed an emotional attachment to mobile phones before the internet. This social fact will undoubtedly aid the growth of m-commerce. As for our plans, we will surely show record growth as GittiGidiyor.

[heading style=”1″]M-commerce will reach a volume of $730b in 2017[/heading]

Zeynep Şener, General Manager, Mobilexpress

The growth and potential of mobile is beyond dispute. Where we are today, it is certain that consumers demand the ability to shop not only at specific locations—like at home or work—but anytime, anywhere. Based on this, we foresee that shopping will migrate to mobile, or more specifically, to phones. According to research by Juniper, m-commerce will reach a volume of $730b in 2017, and the bulk of the growth will result from the mobile sale of physical goods instead of digital goods. Especially easily purchased items like books, music, DVDs, or tickets, and location or time targeted campaigns will play a large role in this growth.

Mobilexpress is a mobile shopping and payment platform that enables a safe and easy shopping experience. After creating the entire infrastructure with everything we have, we launched the Mobilexpress Mobile Shopping system on Boyner Magazine’s New Year Special in November 2011. Since early 2012, we’ve been working with several leading companies in the mobile shopping industry. We presented in early summer the Mobilexpress online payments structure to our clients.

Transform printed ads into mobile sale channels

Mobilexpress speaks to both online and offline. Mobilexpress has two primary online services: Mobile shopping and secure online mobile payment. The mobile sales structure^TR allows clients to buy via cellphones and companies to transform traditional mediums like magazines, newspapers, billboards, and TV into mobile sale channels. Additionally, Mobilexpress allows companies to actualize sales from websites that lack a payments infrastructure, or even from the packaging of the goods. The systems operates on SMS to accommodate for all cellphones. The only thing shoppers have to do in order to buy something is to text the number associated with a product to 3570. Smartphone owners have the option to do this through the mobile app.

We offer our mobile shopping service to our clients without an online store, and offer online stores that do not run ads our mobile payment service. However, for most of our partners, we prefer to operate in several fields and develop mobile projects. When observed from the consumer side, Mobilexpress creates a difference. After a simple registration process to Mobilexpress for, say, a book they decided to buy from a newspaper ad, the users gain the ability to streamline all future purchases simply through SMS.

When we examine the global direction of mobile shopping and the current state of the Turkish market, it is certain that a service that encompasses all devices through SMS is ideal. We are working to integrate QR codes and more advanced technologies to our mobile shopping arsenal in the future, parallel to the smartphone penetration in Turkey.

Furthermore, we offer mobile payment options^TR to consumers, which enables them to finalize their online shopping experience using the cellphone. And they get to keep all the perks that come with credit cards.

[heading style=”1″]Yemeksepeti foresees growth of 70-80% in mobile transactions in 2013[/heading]

Nevzat Aydın, Founder and CEO, Yemeksepeti

It is wrong to call a transaction made on a mobile device instead of a computer m-commerce just on that count. Just as there are big differences between selling in a store and e-commerce, mobile commerce has its own dynamics. The most serious difference lies in the size of the screen, for which the entire flow and dynamics of a business should be remodeled. For example, information that can easily be conveyed on a website or even necessary steps to finalize an order have to be taken out or simplified. Mobile users absolutely prefer simplicity and speed. The second main difference is in communicating with mobile users. Just as calling over customers by yelling can only function in a bazaar setting, the mobile world has communication techniques of its own. Mobile ads, e-mail optimizations, SMS campaigns, and push notifications—which I expect will be much more popular in the future—are some examples.

I don’t think we should approach m-commerce solely as a transaction that ends in mobile, either. In Yemeksepeti, for example, most of the “real financial transaction” takes place at the client’s door, between the restaurant and the client; but the order is placed on mobile. Furthermore, there are mobile payment systems that finalize a sale in a store via the mobile device. I think both cases are in the realm of m-commerce. Taking it a step further, I think every commercial transaction placed through mobile banking apps count as m-commerce.

The only secret of m-commerce is not building a good app, naturally; but if you designed a poor app, it might seriously hamper your operations due to the short attention span of mobile users. One has to tread accordingly.

With the recent popularity of 360-degree marketing, mobile devices have become the most important platforms to connect to consumers anytime to make sales. Parallel to this, in the near future, I expect the trio of right product/right time/right place to turn into the duo of right product/right time. Companies will be able to reach out to users with mobile devices anytime to increase the chances of finalizing a sale. This is one of the clearest signs that m-commerce is a trend with a great future.

The key to m-commerce is smartphones. The reason why we nationally have a low m-commerce volume is the low penetration rate of smartphones when compared to Europe; but I want to quickly add that we, especially the Turkish youth, are quick to adapt to new developments. Additionally, some technologies and devices reach Turkey later than Europe, which is an obstacle for healthy growth. Despite all the handicaps, the developing Turkish market should catch up with the European market thanks to the latest attacks by GSM operators, which helped improve the state of smartphones and connection speed.

I do not think high-ticket items that require research before purchase—like fridges, laptops, or furniture—will be acquired over mobile in the medium term. However, I think goods that will be used or consumed shortly after purchase will massively shift to mobile. Of course a great example is food! Beyond food, items like movie tickets, deal-of-the-day offers, and clothing will move to mobile. New investments in the mobile sector will serve to increase consumer awareness. As Yemeksepeti, we foresee growth of 70-80% in mobile transactions in 2013.

[heading style=”1″]Mobile payment market to reach TL200m by the end of 2012[/heading]

Alper Akcan, CEO, Mikro Ödeme

M-commerce roughly corresponds to all the financial transactions customers execute over mobile. We can lump categories like payments, purchasing digital goods, or purchasing physical goods under this title.

M-commerce offers novel shopping structure and customer experience over smartphones and tablets. Mobile devices point to a richer, more personal interaction for the user. Moreover, smartphones and tablets render it possible to integrate time and location parameters in certain scenarios. Approached from this angle, m-commerce differentiates and strengthens e-commerce.

3pay|Mikro Ödeme has been aiding millions of successful transaction under Mobile Payment category since 2008. In the past years, even when smart device penetration in Turkey was nothing to write home about, it was possible to speak of a serious mobile payments volume. Based on this, it is not accurate to classify m-commerce as what happens on tablets or smartphones. Any payment done via the mobile should be classified under this.

Evaluating m-commerce solely over mobile apps means missing out on various scenarios and opportunities

The dynamics of m-commerce is about to transform and enrich the way we make sales in stores. Mobile apps are only one part of m-commerce. Today, we can carry out many everyday payments on mobile. For example, we can pay for parking, order a pizza, or start a magazine subscription. These are not mobile benefits. Successful m-commerce is no different from traditional commerce. What will you sell, how will you sell it, and how will you achieve this with minimum effort from the consumer side? Answer these 3 questions to succeed. Mobile payments come into play in the third question.

It is a simple fact that smartphone and tablet penetration is on the rise. In the last few years, we have been watching the popularization and mass utilization of mobile technologies, especially Android devices. As in every technological development, we integrate the technology further into our lives as penetration and frequency increases, which results in the differentiation and enrichment of our lives. Therefore, it is not easy to separate m-commerce from the dynamics that come with the proliferation of mobile devices. That’s what makes it a trend. Rich and comfortable interaction, personalization, location and time-based experiences all help give the upper hand to m-commerce.

3pay|Mikro Ödeme has to follow and adapt to the changes in payment systems brought about by mobile technologies. Taking it a step further, we prepare services for alternative payment tools, new and different setups, and solutions that make life easier.

M-commerce will keep on growing until 2015

M-commerce is growing fast. The rate of growth depends on the industry and segment; some just adapt faster. The faster adapting ones will show incredible growth by 2013. Not only 2013, naturally; our global and local observations show that m-commerce will keep on growing until 2015.

In 2011, the total mobile payments market reached TL100m, and it is to reach TL200m by the end of 2012. 2013 will be the year users clearly see just how fast, easy, and beneficial mobile payments are. As 3pay|Mikro Ödeme, we will add new technologies to our mobile payment services and strengthen our positioning in this growing market. We will also offer new services, and extend mobile payments to several sectors. Finally, we will offer all these services in our Middle East offices we are in the process of establishing.

[heading style=”1″]M-commerce means free commerce[/heading]

Kubilay Erdoğan, Member of the Board, MOBİLSİAD

M-commerce simply means interchange on mobile, and in Turkey, it is a concept both old and new. Ringtones, wallpapers, screensavers, and games for cellphones are examples of m-commerce dating back to 2005. This old concept has gained new meaning with the adoption of broadband, smart devices, and mobile payment services. Just as it was for e-commerce, what was previously available on another medium is now migrating to mobile devices and payment systems. M-commerce means free commerce.

Several things make m-commerce superior. It is quite fast, independent of location and time, it is right there with the customer at the moment of interchange, and has a growing client base. Another important advantage of m-commerce is to provide alternatives to the dominance of credit cards in e-commerce. As you know, it is very safe to execute transactions up to a certain volume over mobile.

M-commerce may develop much faster than e-commerce

Compared to Europe, m-commerce is in its infancy in Turkey; unofficially we place it at around 6%. However, this number is moving up. As vendors invest in this field, so will the consumers. Turkish consumers are quick to adapt to new technologies; we went through this in e-commerce. We expect a similar growth in m-commerce. Actually, m-commerce may develop much faster than e-commerce. That shouldn’t be surprising when we factor in the 35 million broadband users registered since 2009; currently there are more 3G users than 2G users. Considering that these figures don’t shift so rapidly in Europe, we can tie the quick adoption to the youth and technological curiosity of the Turkish consumers.

All sectors other than food will grow fast

As it was in e-commerce, all sectors other than food will grow fast. I expect personal products, home textiles, electronic goods, food and beverage, entertainment, travel and insurance industries to take the lead. Differently from e-commerce, apps should also come forth in m-commerce.

In Turkey, not only smartphones, but smart TVs too are on the rise. Landline and mobile internet, by convergence computers, cellphones, tablets, and TVs will work together. These all will contribute to the growth of m-commerce.

I expect great growth in m-commerce by the end of 2013, but it will follow a previous surge in e-commerce at the end of 2012. In both e- and m-commerce we have a lot more work to do. Both types of commerce, unlike traditional commerce, operate without national borders. This helps both local and international trade to surge.

I expect mobile commerce, which constitutes 6% of the market right now, to grow to 10-12% by the end of 2013, and 50% in 2015.

[heading style=”1″]Currently, there is no better tool to reach the consumer directly based on the content of your service[/heading]

Hakan Erdoğan, IT Director, limango

Cellphones and tablets are the most important electronics of our day. Nobody does out without a cellphone; and tablets have become an important part of home and office life. We reach for our phones as soon as we wake up. Everyone around us has at least one cellphone; we hear of a new model or innovation daily. The industry shines with its growth. The demand for mobile devices brings the mobile world a step ahead of other channels. Currently, there is no better tool to reach the consumer directly based on the content of your service. That is why I think today and in the future m-commerce and mobile marketing will be one of the most important trends.

Though one shouldn’t really separate e- and m-commerce, the mobile has perks like being independent of time and location. M-commerce can reach customers over phones and tablets anytime, anywhere; not only in front of the computer. This is a new service channel for e-commerce sites with millions of users, like limango. We are still working on improvements. limango is preparing not a mobile site for smartphones and tablets, but apps and campaigns targeted specifically to mobile users.

The purpose of m-commerce is to satisfy the consumer demand as quickly as possible. M-commerce happens in one of two ways. It might start and checkout on a mobile app, or it might start on a computer, and the mobile device comes in only at the payment phase, and everything is again wrapped up on the computer.

The sine-qua-nons of mobile apps

What differentiates m-commerce is practicality and freedom, and we should emphasize a few points. As a start, mobile sites/apps should be reliable, easy to read, and comfortable to navigate. The mobile site’s design and content should not deviate too much from the original website. It should be plain and legible. It should be compatible with multiple devices. It should spare the unnecessary data transfer, and the images should be optimized. To achieve all this, one should consider employing concepts like Mobile First and Responsive Web Design. limango has apps for iPad, iPhone, Android, and Blackberry, which can be used to access the site and shop securely.

Based on TNS’s research on consumer habits, 20% of all electronics in Turkey are sold online, and 20% of that over mobile. According to BTK, mobile internet traffic in Turkey rose by 359% in 2011. The data points at incredible growth over a short period of time, and bolsters the interest in mobile phones and tablets.

limango’s short term goal is to grow stronger in this channel

We expect that in 2013, more will use m-commerce and the number of active platforms will increase, and brands will offer more deals specific to this channel. limango’s short term goal is to grow stronger in this channel. We will keep working to offer the best shopping experience for our customers.

[heading style=”1″]M-commerce creates a radical change in shopping[/heading]

Fatih İşbecer, Founder and CEO, Pozitron

As a result of rap’dly developing mobile technologies, the whole world has become an open market. The entirety of product and service purchases over mobile devices constitute m-commerce. M-commerce is more comprehensive than e-commerce by virtue of abolishing immobility. Along with shopping, m-commerce comprises transactions like mobile banking, payments, and ticketing. M-commerce creates a radical change in shopping by letting customers reach any product and service anytime, anywhere.

Furthermore, m-commerce provides added value to companies through barcode readers, NFC technologies, and location-based services. Marketing activities impossible to realize over the computer, like push messaging, are easily achieved over mobile. In fact, mobile opens the doors of a new and much improved era for commerce.

When it comes to applications…

User experience is very important in m-commerce. It’s very important to design an application that pulls the user in, and pushes them to see and buy the maximum amount of products possible. The checkout should be as easy as possible with the fewest number of steps possible. Every extra step during payment is another chance for the user to abandon the checkout.

Though m-commerce usually ends on mobile, a user who somehow loses the contents of the shopping cart may switch to the computer to finalize the transaction. Additionally, a user who consults a price comparison app might go out and buy the product from a brick-and-mortar store. We should remember that user comments play a big role both on the internet and in mobile.

The consumer is ready to buy as soon as you trigger the urge to shop

M-commerce will let you reach the consumer instantly. The mobile user does not have to go home and sit in front of a computer to buy your product. The consumer is ready to buy as soon as you trigger the urge to shop. Additionally, you can integrate mobile solutions to your store. For example, a mobile user who walks into a store with no intentions of buying something may decide otherwise if confronted with a discount that is offered through a QR code.

In 2013 and the following decade, mobile will be among the most important trends

Mobile ticketing certainly has huge potential. Especially after integrating with mobile payments, apps like Passbook will speed this up and make it an important part of m-commerce. This is relevant for plane or event tickets. People are getting increasingly impatient about waiting. As a result, they want to finish these transactions immediately. Furthermore, the pricing mechanism of tickets incite impulse purchases. Mobile becomes the ideal platform.

M-commerce isn’t about to end its growth. If Turkish e-commerce companies had good mobile strategies in 2011 and 2012, 10-15% of all their sales in 2013 should come from mobile channels. Companies that do not give mobile the attention it deserves are sure to run into setbacks in this intensely competitive market.

This report by Fulya Çimen, originally published in sosyalmedya.co in Turkish, is adapted into English by Süleyman Okan.