A report from Ericsson (NASDAQ: ERIC) ConsumerLab suggests that Latin America has many of the conditions needed for the growth of m-commerce – transactions conducted through the use of smartphones – including high mobile penetration and a low percentage of banked consumers.
Up to 74 percent of people who are not using m-commerce solutions today would be interested in using such services through their mobile phones, according to the report. As many as 66 percent of non-users are interested in mobile banking, while 42 percent could consider using mobile-wallet services.
The rapid increase in smartphone penetration in the region means that there is increased interest in using m-commerce services for convenience, flexibility and safety.
The majority of the population in Latin America – 61 percent – is unbanked, and there is still a high degree of poverty, the report shows. With almost half of the labor force being casually employed and cash being the most frequent method of payment, there are widespread concerns about security.
Patrik Hedlund, Senior Advisor, Consumer Insights at Ericsson ConsumerLab, says: "Greater use of m-commerce solutions will bring benefits to both the banked and unbanked. Payments, shopping and money transfers can be made instantly, and there is no need to carry large sums of cash or queue at banks."
Hedlund says that the main barriers to the adoption of m-commerce services are a low level of trust, perceived low network performance and a general lack of awareness. Regulation, education and continued investments in the networks are key focus areas to improve consumer trust.
Latin America is a booming consumer market, with the countries covered in the report – Argentina, Brazil, Chile, Colombia and Mexico – reaching an average annual GDP growth of 3.5 percent in 2012. The number of people who belong to the middle and upper classes has almost doubled between 1995 and 2010.
Ericsson ConsumerLab gains its knowledge through a global consumer research program based on interviews with 100,000 individuals each year, in more than 40 countries and 15 megacities – statistically representing the views of 1.1 billion people. Both quantitative and qualitative methods are used, and hundreds of hours are spent with consumers from different cultures. All ConsumerLab reports can be found at www.ericsson.com/consumerlab
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