According to a recent announcement among top industry players, Brazil isn’t reaching its full m-commerce potential.
Some of the top players in the mobile commerce industry in Brazil have now revealed that this channel is being held back by limited profit margins and unstable broadband service in the country for medium and small sized retailers.
Moreover, there is also an overall lacking in terms of the awareness of the potential of m-commerce in this sector.
This, according to the primary mobile commerce complaints that were brought up during the Mobile+ forum which held panel discussions in São Paulo. Among the top problems that were identified during these discussions were the low profit margins that could be expected by retailers who participated in promotions such as “deal of the day” strategies. According to the CEO of the Kekanto city guide service, Fernando Okumura, “Sometimes the price of the ticket you can charge from a small retailer is not enough to be profitable.”
This shows that it is very difficult for smaller businesses to keep up with the requirements of mobile commerce.
The issue isn’t necessarily with the methods that are available. Instead, it is in the understanding of the m-commerce channel, as a whole. For example, it was pointed out that it seems that small retailers may not be realizing that these daily deal coupons are designed to be used as an opportunity to advertise to a vast audience, as opposed to actually being an opportunity to profit from that specific sale.
For example, many businesses use daily deal smartphone marketing coupons to get consumers in through the doors of their businesses. While they may not profit on the specific sale associated with the coupon, those same consumers may purchase something else while they are there, or they may learn about the businesses and return again another time, becoming a regular shopper.
Therefore, while this mobile commerce technique should be considered to be an advertising expense, it is being misinterpreted by some businesses and their opportunity is, therefore, being lost. This illustrates a clear need for greater education of businesses with regards to the use of mobile marketing and shopping offers and the way that smartphones can generate greater sales in-store.