Mobile E-Commerce Share Shift

Go back five years and the concept of mobile gross merchandise volume (GMV) was hardly a dot on the commerce map. It was more of a speculative vision without a substantial user base to determine if mobile was worth investing during a time when budgets were already being allocated to the rapid Web development.

No one knew quite where mobile fit into the e-commerce ecosystem, but growth was on the horizon. Just like any new technology, it was up to analysts’ projections to determine how much mobile would capture of the e-commerce market. Now in 2015, the picture is much clearer. Mobile has started to ignite the payments industry on a new level, but how has it gotten there? Taking a look back into some key stats from the major e-commerce reveals how the market has grown and gives an indication on where it is headed.

Just looking at the three e-commerce marketplace masters — Amazon, Alibaba and eBay — and the timeline of mobile growth and attention toward the device shows a different path for each player. But once you dig into the full-year earnings reports about company development, the picture becomes clear as to how an increase in mobile usage translates into mobile sales volume, which means a boost in revenue and profit.

Alibaba | Driving Nearly All of China’s Mobile GMV

Take a look at Alibaba, who, as a starting point, has the competitive edge of operating in the massive mobile-loving population of China. With a consumer base where online shopping is second nature, Alibaba was able to grow into Asia’s dominant e-commerce company that posted the largest IPO ever, clocking in at $25 billion. Paying attention to online development and mobile commerce might just be what gives it its edge when it comes to producing rapid growth in mobile GMV.

The past two years alone show a staggering change, even when looking from quarter to quarter. Data from Statista shows that in the second-quarter of 2012, when it began tracking the metrics for Alibaba, the e-commerce company’s mobile GMV made up for 4.6 percent of total GMV. That figure rose roughly 1-2 percent each quarter for a year. By Q4 in 2013, mobile GMV accounted for 19.7 percent of total GMV. That jumped again to 27.4 percent by the next quarter and by the end of 2014, Alibaba reported that mobile GMV accounted for 42 percent of total GMV.

By the time Alibaba went public, its mobile GMV for the twelve months between Sept. 2013-Sept. 2014, it recorded $95 billion in mobile GMV transactions. Alibaba’s mobile GMV grew to 53 billion mobile transactions in the fourth quarter, which was a 213 percent increase from the year prior. That figure is even more dominant in terms of overall market share across China.

“Alibaba leads the China mobile commerce market with 86 percent share of total mobile GMV, according to iResearch. And our Mobile Taobao App continues to be the No. 1 mobile commerce app, and in fact, one of the most popular mobile apps in all China,” said Alibaba Executive Vice Chairman Joseph Tsai in the company’s latest earnings call last month. “This strength in mobile commerce demonstrates our ability to attract mobile users with strong commercial intent on a scale that we believe is unrivaled by any of our peers in China globally.”

With plans to expand its commerce options internationally, China is likely to be one of the dominant mobile players both in its home country, but also eventually into the U.S., where Alibaba has been increasingly laying groundwork in. That alone would add a fiercer competition to the mobile GMV landscape and likely drive other e-commerce companies to invest in similar ways.

Amazon | Killing It Online – But Mobile?

Turning toward America’s e-commerce leader — Amazon, the mobile-first focus isn’t quite as clear, at least not from the statistics its top execs chose to focus on during any of its earnings reports for the past five years. And if Amazon could have used anything during the past year, a focus to appease shareholders would have done them well. Now, with higher recorded profits — finally breaking into the black after a few quarters deep into the red — Amazon is poised to show where it can grow its mobile commerce strategy. The question is: How will it bank on mobile to drive its growth during a time when Amazon is already in a heavy investment mode?

From reviewing its past five years of fourth-quarter earnings releases, it’s hard to form a conclusion since mobile wasn’t used once as a key talking point for the company’s earnings statements. Nor did they release any specific figures. Mobile GMV figures? Not once. It appears Amazon hasn’t been able to create the same buzz for mobile commerce as its Chinese counterpart. But then again, comparing China’s mobile e-commerce ecosystem to the U.S. is a bit slanted as the scale has to factor in the population differences and amount of consumers dialing into mobile shopping — an area where the U.S. lags far behind China.

One key difference about Amazon is that it doesn’t break down its mobile figures in terms of how it reports publicly. While Alibaba uses mobile as a way to pat itself on the back when sharing its successes, Amazon keeps things close to the vest. This may also be because Amazon hasn’t found a way to capitalize on its mobile products like Alibaba has. Or, perhaps more appropriately, more consumers living in the U.S. have access to PCs and grew up using Amazon online. Amazon’s efforts to jump into a mobile first ecosystem was via its somewhat failed efforts (so far) at the Fire Phone. In speaking about the drop of its mobile wallet, Tom Cook, an Amazon spokesperson, told TechCrunch: “We’ve learned a great deal from the Amazon Wallet beta program and will look for ways to apply these lessons in the future as we continue to innovate on behalf of our customers.”

But that’s pretty much all the company has articulated about its mobile wallet plans and where its mobile commerce strategy fits into its overall revenue and profit strategies. Mobile is used as a general concept, but specifics are rarely detailed. As Amazon continues on the investment track, one can only wonder when an emphasis on mobile will surface.

Tom Forte, a Wall Street analyst who tracks e-commerce trends for Brean Capital, told VentureBeat that the mobile-led market is packed with fast-growing, rapidly changing force that takes time to develop to as the industry sees how consumer behavior adapts to change. While Alibaba is focused primarily on technology and e-commerce growth, Amazon has its hands in many other industries, which could make its development in mobile commerce and attention toward mobile GMV lag behind. But that may also simply be appearance since Alibaba decides to be much more vocal about its mobile strategy.

“To me, what’s different is that we’re in a stage of the Internet cycle where a lot of categories are going to merge. That feigns the appearance that they are exiting products more quickly,” Forte said. “The amount of change is so significant and the pace of change is so fast, it creates the false appearance that they are exiting faster or that there has been a change in strategy.”

EBay | Mobile a Focus and a Key Driver of Revenue

Looking at eBay’s mobile strategy, the figures are a bit easier to track as the e-commerce company regularly reports on mobile GMV and how it aligns with its overall revenue growth. While eBay’s mobile GMV portfolio will change once the PayPal split occurs, for now, the earnings reports for the past five years show mobile and mobile GMV have always been a key metric. Even in 2012, the report stated that total mobile GMV for the full year hit nearly $2 billion. By 2011, its mobile sales hit $5 billion, and growth was cited by the company as an “increased adoption of eBay’s mobile apps and product innovation drove deeper customer engagement across all platforms.”

By the end of 2012, mobile commerce volume grew more than 120 percent to $13 billion, which was fueled by the same metrics but at a much faster pace. EBay’s suite of mobile apps attracted more than 4 million new customers in 2012.

“Mobile continues to rewrite the commerce playbook, and we continue to be a mobile commerce and payments leader,” CEO John Donahoe said in the company’s 2013 fourth-quarter earnings call. “In 2013, we expect each to exceed $20 billion.”

And eBay exceeded that projection, hitting $22 billion in mobile commerce volume in 2013, which by this point mobile accounted for 40 percent of all GMV in the fourth quarter. Mobile payments volume overall for eBay grew 128 percent for the year. Total mobile commerce volume in 2013 grew 88 percent, year over year, and set the tone for eBay’s mobile future. Strong mobile GMV continued into 2014, starting with a mobile payment growth volume at 58 percent in the fourth quarter of 2014 to $45.6 billion, which represented 20 percent of total volume.

“For both businesses, mobile continues to be a major source of innovation. … Mobile GMV was up 42 percent for the year. Mobile GMV at eBay was $28 billion,” Donahoe said, during the company’s 2014 Q4 earnings call. “Throughout all the challenges the marketplace has now and all the operational executions they are focused on, we are still focused on the mobile experience — like live auctions and other things. There is no lack of attention for innovation across all our businesses.”

While that’s still just a fraction of the picture of these three e-commerce giants’ mobile strategies (and only a sliver of what Amazon is doing), it shows that mobile commerce has become a catalyst from growth both in terms of revenue and profit. That’s what mobile innovations in this marketplace is about: growing an e-commerce presence at the tip of every consumers’ fingertips. And for now, until the next big thing comes along, it’s up to companies like Alibaba, Amazon and eBay to show how they are paying attention to mobile and how those strategies have been able to capture a larger share of the mobile GMV market.

We’ve already seen how mobile has changed the e-commerce market, but seeing how the top e-commerce players adapt will give the payments and commerce industries a better picture of what it means to develop mobile-first strategies. And then we’ll really see how mobile can ignite the next big e-commerce innovation.