M-Commerce in LatAm – the challenges and opportunities, Filipe Roup Rosa

Filipe Roup Rosa, MEF LatAm Chair and Business Director of Latin America for Boku, takes a look at the future of m-commerce in LatAm, and the crucial role MEF has to play in the region.

About ten years ago the mobile device was primarily used for voice calls and text messages. We have seen the industry rapidly evolve to a point where mobile devices are no longer just an occasional communication tool, but a form of expression, personality and socialization.

This customization was facilitated in large part by the explosion of mobile content such as ringtones, wallpapers and games. The evolution of smartphone technology allowed easy access to mobile content. This created new revenue streams for many companies, especially those in the media industry, record companies, developers and obviously mobile operators.

Today, one of the most significant changes in the industry is the use of cell phones not only as a means of communication, but also as a means of engaging in m-commerce which has its origins in the consumption of mobile content and digital entertainment. We are now at a time where m-commerce covers the purchase of almost any digital product, virtual or physical, through a mobile device.

New business models

Filipe Roup Rosa and Andre Andrade at MEF Americas 2012

This does not mean that mobile entertainment market is declining. While products sold at the beginning of this market, such as ringtones and wallpapers, reached a plateau in terms of revenues, more than ever mobile entertainment is being consumed which is monetized through new business models (e.g. freemium or advertising-based, such as advergames).

Consumers are becoming increasingly open to the idea of ​​making purchases of a variety of goods and services using the mobile phone. Recent studies have indicated that the majority of respondents feel comfortable with using their mobile device for financial transactions. In 2012, sales of physical goods purchased via mobile devices surpassed $ 2 billion in the U.S. alone. On a worldwide basis, it is expected that the market transactions of goods and services purchased via mobile devices will reach $ 199 billion in 2015, equivalent to 8% of all e-commerce transactions.

Part of the exponential growth of m-commerce is attributed to the explosion of mobile applications for smartphones, which have expanded the way consumers discover, interact and access content, services and products. This has led companies from diverse industries to create applications that also enhance m-commerce, thus creating a virtuous cycle of new payment methods and new revenue sources.

But m-commerce is not just about buying applications. The concept is much broader and refers not only to mobile payments, but also to a variety of services including coupons, deals, location-based search, mobile wallets, just to name a few.

Privacy concerns

As within any fast growing industry, m-commerce also presents big challenges. Perhaps the greatest challenge to its growth is the consumer’s concern about safety and privacy of data.

Thus, the mobile industry within the coming years will focus on increasing consumer confidence, creating standards and security mechanisms, at least at the same level of those found nowadays in e-commerce transactions… and that is were MEF can play a crucial role, shaping, connecting and monetizing this huge opportunity for all the parties of the value chain.

Filipe Roup Rosa is MEF LatAm Chair and Business Director of Latin America for Boku – connect with Filipe