Latin America is an attractive region for MNOs to explore the m-commerce space beyond m-payments, due to the increasing presence of mobile merchants and the strong base of mobile users.
According to Pyramid Research, the increasing market of mobile users in Latin America is one of the main reasons for the high interest of mobile merchants in the region. Mobile subscriptions rose to 735 million in Latin America at the end of 2014, while almost 200 million mobile handsets were sold, 62% of which were smartphones. Marcelo Kawanami, senior analyst at Pyramid Research, says: “Mobile device users in Latin America are very engaged in mobile apps and social media, which is rapidly becoming a key channel for m-commerce marketing.”
Regional and international mobile merchants are planning to expand their operations aggressively in Latin America. Mobile-based merchants such as Uber competitor Cabify and high-end clothing discounter Showroomprive have already announced interest in expanding their operations into Latin America, and Rocket Internet has recently launched the new beauty market space Vaniday in Brazil.
With mobile merchants expanding their operations in Latin America, mobile operators can explore new sources of m-commerce revenue beyond m-payments. Setting up a mobile app store or providing value-added services such as analytics tools that support the needs of mobile merchants in the pre- and post-payment stages of customer experience presents a big opportunity for MNOs in Latin America. "Operators need to understand that the payment stage is simply transactional and, although important, it is not a key attribute for customers when they research and select products,” says Kawanami.
Currently, mobile operators are closing partnerships with mobile merchants, leveraging their brands through their own mobile app stores or by embedding mobile merchant apps into all their smartphones. Kawanami adds: “By acting as aggregators, MNOs support mobile merchants’ marketing and communication efforts and can profit through the apps sold via their mobile app stores and increased use of data services.”