Major m-commerce opportunities in Eastern Europe

Strong telecom infrastructure, an IT-savvy population and a dependence on mobile telephony are factors driving a booming mobile commerce (m-commerce) sector in Eastern Europe. Large markets such as Poland and Russia offer lucrative opportunities for businesses in mobile gaming, payments and messaging services as smartphone penetration edges upwards. The local m-commerce start-up scene is blossoming, although funds from London corporate finance and other Western investment hotspots are restricted into big markets such as Russia and Ukraine due to instability and sanctions.

Eastern Europe has the more advanced mobile Internet landscape and larger household disposable incomes by comparison to other emerging regions, such as Asia Pacific, Africa or Latin America, which means m-commerce services are adopted on a greater level and the amount of transactions per individual are higher. Over a third of Eastern European mobile subscribers had a mobile Internet subscription in 2014, compared to around half that in the Asia Pacific region.

Unlike in developed nations, where paying via bank cards or online payment gateways for goods and services is commonplace, a large number of underbanked Eastern European consumers are reliant on cash payments. This landscape facilitates payments via a mobile: consumers top up phone credit with cash and use this resource as an electronic wallet. This system is partially successful due to the extremely high penetration rate of mobile telephones in Eastern Europe.

Mobile payments and mobile gaming have been the most vibrant m-commerce segments in the region. The option to pay for utility bills, cinema tickets and traffic fines, among others, via mobile payments is common. Mobile gaming has taken off as data plans have declined in costs and smartphone penetration has surged.

Eastern Europe’s relative ICT development, a growing rise in mobile Internet penetration and smartphone uptake will unlock greater opportunities in app downloads, mobile gaming and mobile money. Russia is set to be the outstanding market going forward, boosted by new laws on electronic payments that came into force in 2012, which have brought greater organisation and optimisation to the segment.

Ukraine is expected to be the major underachiever. Despite holding the second largest total of mobile subscriptions in Eastern Europe and a cash economy that lends itself well to mobile money operations, the country’s violent protests throughout February 2014, near-bankruptcy status and an uncertain political future offer limited potential in the medium-term development of the m-commerce market.

While smaller in size, Poland has the more mature and forward-thinking m-commerce landscape. In mid-2013, six of the country’s top banks teamed up to develop a single mobile payments system, which could go on to rival international payments systems such as Visa and offer opportunities to businesses that can incorporate mobile payment platforms for local consumers.

 

 

 

A conversation is never wasted. We’re confident that we can give you all the help you need, but we’ll tell you if we think there’s a better option for you.

Get in Touch Get in touch now