The weight of apps on Italy’s GDP and the skyrocketing of mobile commerce

The daily use of smartphones for apps and services is a phenomenon that everyone knows is in constant growth. What everyone might not know, however, is that this phenomenon is generating a new economy that now weighs in on the GDP at 1.6%. This is what has been revealed by the Mobile & App Economy… Read more »

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The daily use of smartphones for apps and services is a phenomenon that everyone knows is in constant growth. What everyone might not know, however, is that this phenomenon is generating a new economy that now weighs in on the GDP at 1.6%. This is what has been revealed by the Mobile & App Economy Observatory at the Politecnico di Milano (Polytechnic University of Milan).

The data shows how the development of a mobile ecosystem and the consequent mass diffusion of internet access with smartphones and tablets have generated significant effects in economic terms. The Observatory estimates that the overall value of the mobile & app economy will reach 40 billion euros in 2016 (2.5% of GDP), and leading everything will be precisely mobile commerce and mobile payments, which will generate 6 billion euros each.

Impact of mobile app economy on GDP
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In the lead, are sales of digital content (games, news, etc.) on smartphones and tablets that grew by over 30% in 2013 (mobile content). In Italy, mobiles have created a virtuous circle: tablets and mobiles will reach a quota of 45 and 12 million by the end of 2014; over 30 million Italians will access Internet via mobile; the new LTE networks will cover about 60% of the population. By the end of this year, Italians who navigate monthly via smartphone and tablet will be over 30 million. 1 mobile surfer out of 3 will have downloaded pay applications from a smartphone and 1 in 5 will have acquired at least one product or service, 4 out of 5 will interact with advertising from this device and 1 in 2 will also want to use it as a payment method in place of credit/debit cards.

It is not by chance, therefore, that investments by enterprises and public institutions in mobile software solutions have seen an increase of 23%, and 73% for mobile marketing. Overall, enterprises will spend twice as much in 2016 on these investments as they did in 2013.

The response of users to the new markets accessible via mobile is already very high. About 85% of internet users on smartphones see advertising within websites or applications and half of these clicks on them. Three quarters of mobile surfers are interested in mobile couponing, that is, they would like to receive discount coupons on their mobile phones. As well, over half are willing to substitute their credit cards with their smartphones to make payments in physical sales points. The significant growth of mobile commerce will continue: we estimate that from the current 1.2 billion it will reach over 7 billion euros by 2016, with a weight relative to e-commerce that, if it is equivalent to 12% today, then it could surpass 40% within three years.

Ever more time is spent on Internet via smartphones
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Mobiles are increasingly becoming the channel to concentrate on because each step of the relation with the final consumer and the internal business process can be improved through mobile solutions. The mobile proximity payment market will be developed, that is, payments in proximity made with a smartphone: though today there may only be a few experiments, by 2016 it could reach a value of 4 billion euros.

There is also the mobile POS market, or rather, transactions linked to goods and services that will be accepted by mobile devices, which is estimated to reach 2 billion euros. But the opportunities will not stop within the realm of smartphones. The biggest bets are being placed on the “intelligent objects” market: some of the sectors that have already begun (most notably with intelligent vehicles) will be raking in a value of 1.6 billion euros by 2016 (+80% in 3 years). And many other things can be added to applicative sectors like, for example, the creation of wearable objects and the development of new solutions for citizens and health care, as has been demonstrated by some interesting international experiments. And helping enterprises with all of this innovation are startups: of those operating on the market, over 600 were financed at an international level in 2013. Their role is very important in creating new business models aimed directly at final consumers and in supporting businesses in their digital and mobile transformation process.

So even young, very young, people have begun to take part in an ecosystem that is helping, above all, the country. Beyond the direct effects on the GDP that have been calculated for the mobile & app economy, there are other indirect benefits that could be added – commented research leader Marta Valsecchi. Some examples are: the increase in the productivity of mobile workers (an estimate can be made of 10 billion euros for the Italian work force in 2013); the positive impact of the use of mobile information channels for offline sales; the beneficial effect of mobiles in increasing the internet user base, that is, in reducing the Italian digital divide.