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If you were to think of the five companies that are making the most of m-commerce, eBay would certainly be near the top of that list.
The auction site was on track to generate $5bn of revenue through its mobile platform in 2011, and is constantly seeking to innovate through its range of apps. Today it announced that its barcode scanning app, RedLaser, has been downloaded more than 2m times in the UK.
But what does the future hold, and how does eBay plan to grow its m-commerce revenues in 2012?
To find out we talked to eBay's senior director of mobile commerce in Europe, Olivier Ropars.
What is eBay’s m-commerce strategy for 2012?
eBay is in a fantastic position right now, as I think we are a market leader in m-commerce and there’s not that many strong players in this market yet.
eBay benefited from its position in auctions originally, because people who bought a lot on mobile last year were often looking at time bound deals, such as auctions or flash sales, where we can play a strong role.
Going forward the market is changing quite a lot and one out of two people now has a smartphone. Stats show that virtually every phone sold now is a smartphone and by 2015 to 2016 nearly everyone will have one.
Now, the kind of people who are getting into this market are not the early adopters that we saw last year, so the big challenge for eBay is to simplify the buying experience and make it easier for those so-called ‘dumb’ smartphone users.
Towards the end of last year we did research looking at how consumers use mobile to purchase, and also the role of mobile along the whole customer journey.
We found that people are using their phones for different reasons, some are using it for research, some are looking to find out where they can buy the goods locally, others will use the phone in-store to compare prices and others will use it just to do the transaction.
But overall the majority of transactions that are happening offline starts somewhere online or on the mobile phone.
How do you plan to increase the number of transactions made through mobile?
Last year $5bn of goods was sold through eBay mobile worldwide, and this year we want to almost double that to $8bn. In the UK, out of every £10 spent on eBay, £1 is spent on mobile phone, so people are doing it more and more.
As with all new technologies there is a level of discomfort with users that they don’t really understand how the phone works and how secure it is entering credit card information onto their phone.
This is changing in several ways, such as people like us making the experience easier and more trustworthy, and by consumers buying things and realising that it is a safe process.
The best way to increase transactions is the use of a password rather than credit card information. Quite often you're using your phone in public spaces and it is very difficult to take out your credit card and enter all the details, as there are people around you looking at you and it’s not a very comfortable experience.
We have PayPal, which is a fantastic asset, so you just enter one password and that’s it.
We see that every time we introduce what we call ‘mobile express checkout’ features in a new country we see a strong increase in mobile sales.
At the same time we see that consumer behaviour is changing very fast. A year ago if you asked people would you be comfortable to give a retailer your location, 70% of people would say no. Now 70% of the people click yes.
With purchasing it is the same situation - when e-commerce started a lot of people felt very uncomfortable entering credit card information, and in fact still a lot of people do in Italy and France for instance.
In the UK people are very comfortable buying items on their desktop and are now becoming more accustomed to doing that with their phones.
The two key aims are to get the people who are currently buying on mobile to buy even more, and getting new users to start buying on mobile as well.
When I started to make purchases on mobile last year, buying bicycles for the kids, you realise once you have used it just how convenient it is.
Now I find myself in the kitchen, just preparing meals for the kids or whatever, and I find that the power adaptor for the computer is broken, and I go on my phone and buy the same power adaptor on eBay. It takes less than a minute to do that.
It’s so much easier to do that then adding it to your to-do list and waiting until you get back to your computer to make the purchase.
This means as time goes on we see the average purchase price going down slightly as people start buying more everyday items, like a cheap power adaptor, or batteries for a scale in the kitchen (which I have done as well).
Which do you think is more effective for eBay – mobile apps or a mobile optimised website? Or do you favour a dual strategy?
That’s a big question, and we spend a lot of time thinking about it.
Today we have the privilege of both - we have the mobile site and actually a whole set of mobile apps, which raises other questions around that. But in my mind both are very important.
There will always be casual buyers who want to come eBay, browse the products and buy them without going through the hassles of downloading an app.
This is particularly true on the Android platform, where it is more difficult to sign-up for the app store, find the app and download it on your phone.
So I think it’s very important to have a strong mobile web experience for all those casual mobile users. And as smartphone penetration increases and we get to these ‘dumb’ smartphone users mobile web is even more important.
The app offers even better functionality than on the mobile web, such as location services, the camera and notifications, which is very important with tailoring the shopping experience to the user’s experience.
So the app is very important for the more advanced buyers, or the enthusiasts for your brand. But then the app isn’t enough on its own, you need to have the mobile web to drive people onto your app.
eBay currently has several dedicated apps, such as Fashion and Motors. Are there any other areas that are key to m-commerce and may see similar focus?
There are a couple of reasons why we have apps for separate verticals.
It is because the shopping experience is very different when you buy a dress, compared to when you buy a car or a computer games, and we want to use these apps to deliver the best customer experience as possible in those verticals.
Today the fashion app is doing extremely well among fashion enthusiasts, offering great innovation with image recognition and the personal closet, but going forward it is a bit impractical to have one app per vertical.
And though I don’t buy dresses, mind you, I will buy power adaptors, batteries and electronics or stuff for the house - and I don’t want to keep going in and out of different apps to buy what I want.
So I think for us the nirvana is to be able to have the tailored shopping experience in each environment, whether that is in an app or on the mobile web or both.
The other great benefit of having the apps is the ability to innovate, so we had image recognition in the fashion app, now it is in the motors app where you can search for a car by taking a photo of the back of the vehicle which works incredibly well.
So it is trying all these different things and seeing how well they work and how people react, and then bringing them back into the core app as well.
You opened an eBay QR code shop near London’s Oxford Street just before Christmas last year. Do you think QR codes are here to stay, or are they a stop-gap technology?
Personally I think that as image recognition technology improves QR codes will vanish.
If we can recognise a pattern with the camera today, we should be able to point it at an advert or a particular billboard and link back to the online environment that is tied to that advert.
So while QR codes are meeting a need today, I wouldn’t say they are the most customer friendly interface that we can think of.
Though the Tesco example worked in South Korea that is a completely different market to Europe, and I haven’t read anywhere else of people having great success with them.
I have read that when they are used on posters virtually nobody clicks on them, but the way we used them in the boutique was different.
They were there so people could get more information and check the price, it was meant to showcase the new technology.
What has impressed you most about eBay’s m-commerce strategy since you joined?
First of all that it has one - a lot of people don’t have one.
What excited me about joining eBay was the position that the company has in m-commerce, but also finding out that m-commerce is actually catching on now.
People have been talking about m-commerce for many, many years, and we have seen things like WAP and telco portals but it has never really picked up until the iPhone was launched.
The overall ease of use of the iPhone meant that m-commerce became a reality and it’s bound to grow significantly as smartphone penetration increases, processing power improves and when 4G becomes a reality.
eBay is already one of the leaders in this market, so for me it was a no-brainer that it was a good place to be and to continue to grow in that market.
I was also impressed with incredible success they have had with their apps, the focus on innovation, the way we partner with different startups for image recognition for instance, and we are always looking for new partners and innovations to bring into our apps.
I was also particularly impressed by the overall strategy going forward, not just m-commerce.
If you look at eBay where we started as a marketplace for used goods and auctions, but now more than 60% of the sales are from fixed price and new items.
The strategy now is more about partnering with retailers rather than going against them, and this is not something that a lot of e-tailers are doing.
We are working hand-in-hand with the likes of Argos and Comet to help them catch their fair share of m-commerce as well through the eBay platform.
Our CEO talks about us being a strategy partner for m-commerce and this is the winning formula.
Rather than competing with the high street we work with them as part of their overall multichannel offering.