The mobile commerce boom set to accelerate in the holidays

December 1, 2021

hristmas gift box, New Year winter sale discount.
Jonathan Bennett, Chief Commercial Officer

Jonathan Bennett

Chief Commercial Officer

Holidays and festival seasons worldwide are expected to cause a global spike in eCommerce transactions as consumers rush to buy digital goods and services online.

Real time digital payment software specialist ACI Worldwide[i] predicts that global eCommerce transactions between October and December 2021 will rise 14% year on year. The trend will be led by considerable rises in the volume of transactions associated with ticketing (up 414%) and travel (up 113%) as many countries left free of the economic lockdown restrictions that limited tourism and concerts twelve months previously.

The company attributed a 12% increase in eCommerce transactions related to Singles Day, the unofficial holiday and shopping season that celebrates people not in relationships. The event is marked predominantly in China and by people of Chinese descent in other countries. Chinese retailers Alibaba and JD are reported to have totalled a record US$139bn of online sales between them on 11th November.[ii]

ACI Worldwide predicts even more significant gains for Thanksgiving, which is expected to see transaction volumes rise 20% year on year, Christmas Eve (up 14%), Christmas Day (up 15%), Boxing Day (up 12%) and New Year’s Eve (up 10%). Retailer led sales promotions are also expected to accelerate eCommerce spending on Black Friday (up 22%) and Cyber Monday (up 21%).

Digital payments expand

Increased consumer engagement with eCommerce is also expected to drive digital payments. ACI Worldwide predicts that the volume of transactions associated with electronic wallets is expected to surge 87% year on year, for example, with mobile payments up 18% over the same period. The value of those payments will also grow, up 12% for eWallets and 17% for mobile payments.

A large proportion of those digital transactions will replace previous purchases made with cash and checks as consumers continue to prefer contactless payment options in the wake of coronavirus health concerns and lockdown restrictions. Global consultancy Accenture expects 2.7tn transactions will shift from cash to cards, interbank payments and alternative payments instruments between 2020 and 2030, representing a US$300bn opportunity for payments providers.

Continued mCommerce boom

Mobile commerce (mCommerce), which include transactions initiated using a mobile device such as a smartphone, will account for an increasingly large proportion of the online shopping total, again more so during the October to December period. The 2021 edition of the E-commerce App Report compiled by Sensor Tower and Adjust suggests that mCommerce companies can expect a steady rise in app installs and usage, leading to higher sales during the holiday season.

Market intelligence firm eMarketer estimates that as much as 67% of total eCommerce sales are expected to come from mobile in 2021 and is forecasting a there will be a close correlation between successful retailers and mobile apps in the US this year.[iii] The company expects the value of mCommerce purchases will increase 19% year on year to US$97bn by the end of the festive period, with the majority of that activity flowing through apps rather than mobile web browsers.

Adjust and Sensor Tower noted that eCommerce apps had retained the users acquired for the first time during pandemic-related lockdowns. In many cases, they have engineered further growth and expansion of their customer base. Increasing engagement with social commerce has helped drive that trend, with platforms like Instagram, Snapchat and Twitter introducing new shopping features that enable users to make direct purchases from their smartphones.

A prime example is a recent partnership between TikTok and eCommerce platform provider Shopify. The collaboration allows a select group of retailers in the US, UK and Canada to embed a new shopping tab and product links within the video-sharing app’s interface (more in my earlier blog TikTok Shopping expands social commerce through Shopify partnership here).

Multiple payment channels required

The easing of lockdown restrictions in 2021 will clearly impact how and where people buy goods and services this winter and what they choose to buy. A surge in travel and ticketing was arguably inevitable given the newly restored freedoms of the year.

But two other digital goods and service categories expected to attract significant online spending according to ACI Worldwide include telco (where transactions will increase 11% year on year) and gaming (up 7%), with the value of both forecasts to expand 5% and 27% respectively. And merchants tapping into that demand will need a flexible approach to payment acceptance that embraces as many different channels as possible to suit their customers’ preferences.

[i] Global Ecommerce Transactions Expected to Grow 23 Percent Between Thanksgiving and Cyber Monday, ACI Worldwide, 22nd November 2021

[ii] Alibaba, JD smash Singles Day record with $139 billion of sales and focus on ‘social responsibility’, CNBC, 11th November 2021

[iii] Why mobile retail apps are one key to holiday 2021’s winners and losers, eMarketer, 13th October 2021

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