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Kiwi mobile commerce to hit $10 billion by 2019

01 Oct 2014

New Zealanders will buy nearly $10 billion in goods via mobile channels by 2019 – up from nearly $4 billion this year – according to a new Frost & Sullivan report.

The analyst firm estimates total expenditure via mobile devices at $3.9 billion in 2014, a figure expected to hit $9.6 billion by 2019.

The report, New Zealand Mobile Commerce Market 2014, says services, such as travel and financial services, currently account for the largest category of expenditure at $2.2 billion, followed by the purchase of physical goods, at $1.2 billion.

Expenditure on entertainment is estimated at $0.2 billion and media purchases, such as tickets, e-books and other digital content, is estimated at $0.3 billion.

Entertainment, however, is expected to be the fastest growing segment going forward, with a CAGR of 26% - above the overall CAGR of 20% - propelled by strong uptake of paid music, movies and TV shows, and games.

“Online news, online magazines and e-books will also display very high growth as a significant proportion of consumers move to view written content on mobile devices,” says Phil Harpur, Frost & Sullivan ANZ senior research manager for the ICT Practice.

Physical goods is expected to be the second highest growth category, experiencing 24% growth.

“Eighty-three percent of New Zealanders over 15 years of age currently own a smartphone, up from 73% in 2013 and 64% in 2012,” Harpur says.

“Fifty-three percent of New Zealanders aged between 14 and 65 now regularly use a tablet.

“Frost & Sullivan expects that expenditure will be propelled more by a greater willingness of consumers to transact on mobile devices than by further increases in mobile device penetration, as usage of smartphones and tablets is already approaching saturation.”

Frost & Sullivan says 45% of all New Zealand consumers aged between 15 and 65 have made at least one mobile commerce purchase in the last 12 months.

Harpur says New Zealand shoppers are using their mobile devices to research products, check where they can buy them and whether they are in-stock, get feedback from friends via social media and purchase products.

He says 21% of consumers frequently conduct research on products and services before going to a retail store.

However, in a note of caution, Harpur says many New Zealand retailers are failing to capitalise on the move to mobile devices, particularly tablets.

“Mobile devices are becoming an integral part of omni-channel retailing as its immediacy allows online retailers opportunities to engage shoppers with relevant offers when and where they are making buying decisions, encouraging impulse buying.

“Tablets are also a very important tool in assisting retailers with their customer service and selling process, though a large proportion of New Zealand retailers are not capitalising on the benefits possible from using tablets as a tool this way.”

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