Dawn of the super-app: Optimise your e-commerce business for in-app purchases

Mobile app e-commerce growth in Asia has been driven in part by a historical lack of domestic desktops to access the internet, paired with increasingly cheaper smartphone devices and data plans. In Indonesia, mobile commerce is growing at a compound annual growth rate of 45.2 percent,¹ with apps accounting for 75% of purchases. India is another notable example, with app store downloads growing by 165 percent between 2016 and 2018.² In-app transactions now account for 82.4 percent of all completed mobile commerce transactions.³

Great app experiences are becoming essential to reach UK shoppers

The UK mobile commerce market is worth €91 billion,⁴ accounting for 51 percent of the total business-to-consumer e-commerce market.⁵ In terms of scale, the UK mobile commerce market dwarfs all others in Europe. The pace of mobile commerce growth also makes this segment impossible to ignore and it is expected to outstrip overall UK e-commerce growth and expand at a compound annual growth rate of 20 percent over the next three years, to become a €188.8 billion market by 2021.⁶

Making in-app shopping experiences enjoyable, secure and simple will be critical for any brand looking to gain traction in this market as 43.5 percent⁷  of mobile commerce users shop via this method. Merchants who use these channels should look at solutions such as easy-to-use payment platforms that integrate seamlessly with apps and social media channels and offer strong security measures.

Explore card-on-file and tokenisation as key enablers for this market

Payment methods such as cards and digital wallets (e.g. Apple Pay and Google Pay) are well suited for in-app transactions. In particular, card-on-file arrangements, where a company stores a customer’s card details are likely to become more popular, as they allow greater convenience and one-touch payments.

A key enabler for card-on-file is tokenisation, or replacing your customer's payment account data with a token (a value that cannot be converted back to card or account information within your network). The token functions within your internal systems just as the actual card number would and allows you to avoid storing sensitive data.

Integration with super-apps should be a part of your platform strategy

Merchants should monitor the rise of ‘super-apps’ in Asia. Chinese social network WeChat, which spans a large range of e-commerce and lifestyle services, also has its own payments system. International merchants targeting China should consider integrating their shopping functions with WeChat Pay, a form of digital wallet that allows both peer-to-peer transactions as well as direct payments with vendors.

Tokopedia, which is Indonesia’s largest e-commerce platform, has recently agreed a partnership with local mobile payment platform OVO. If merchants are not set up for these all-encompassing platforms, and their preferred payment systems, then they could get locked out of growing Asian markets.

Three takeaways for e-commerce merchants offering mobile app experiences

1. App usage is increasing in both growth markets in Asia and e-commerce front-runners such as the UK

2. Merchants that can offer strong end-to-end security while maintaining a frictionless payment experience will be well-positioned to win customers

3. Developments in digital wallets, tokenisation and super-apps should be a part of your customer experience strategy