M-Commerce in Singapore

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Executive Summary

M-commerce is growing increasingly popular among Singaporeans. This stems from the high mobile penetration in Singapore, fast-paced lifestyle of Singaporeans and features of m-commerce that deem it favorable. Furthermore, Singaporeans are also seeking a coherent channel that offer a shopping experience which comprises online, mobile, social and in-store components. Accommodating to this rising popularity of m-commerce presents opportunities for Starbucks to better engage customers in Singapore and in turn, drive customer satisfaction and loyalty. Also, incorporating m-commerce will allow Starbucks to collect massive amounts of data. This serves as a gateway to understand and track customers’ evolving taste preferences and behavior on the mobile platform. Information collected will allow Starbucks to better market to customers in Singapore, an apparent growing market with great revenue potential, in its future marketing campaigns. As such, this report proposes that Starbucks should incorporate m-commerce features onto their existing mobile app to leverage on this rising trend.

Title of Contents

Executive Summary        

Title of Contents        

1.0        Introduction        

2.0        Rising popularity of M-commerce        

2.1        Driving Factors contributing to success of m-commerce        

2.1.1        High mobile penetration in Singapore presents opportunities        

2.1.2        Lifestyle of Singaporeans and features of m-commerce that deem it favorable        

3.0        Proposed Recommendation and Implementation        

3.1        Incorporate m-commerce features onto Starbucks App        

3.2        Implementation and Feasibility        

3.2.1        Implication for the company        

3.2.2        Implication for the customer        

4.0        Key Concerns and Limitation        

5.0        Conclusion        

6.0        References        

7.0        Appendix        

7.1        Mobile Phone Penetration Figures from IDA Singapore        

7.2        Willingness to use in-store Digital Enablement Options on Mobile phones        

1. Introduction

Starbucks has attained global market success with its strategic business model and its strong performance can be attributed to its aggressive outlet expansion within the Café Industry and strong brand loyalty amongst consumers (Starbucks Corporation,2014,p.1). Of late, the Café industry has revealed significant changes.

The competitive landscape within the industry has been aggravated by the entry of new players. More international cafés have expanded into Singapore as consumers are willing to spend on eating out (Euromonitor International,2014,p.1). This has resulted in massive expansion in café outlet numbers which can be attributed to consumer appetite for new experiences. These cafes deliver differentiated café experiences in terms of décor, ambience, and menu offerings to capture the interest of consumers (Euromonitor International,2014,p.1). This poses a threat to Starbucks’ market dominance. It is imperative for Starbucks to better distinguish itself from its competition.  

Starbucks should better capitalize on increased use of smartphones for food and beverage purchases. Previously, Starbucks has already made attempts to differentiate itself from competitors with the release of its mobile app. However, there is still room for improvement for Starbucks on the mobile platform especially with the forecasted increase in demand for m-commerce as highlighted by Wang, Malthouse & Krishnamurthi(2015,p.217). To complement the current virtual existence, Starbucks can consider incorporating new features into their app to cater to demand for m-commerce.

1. Rising popularity of M-commerce

M-commerce is defined as “use of handheld mobile devices with mobile Internet, to facilitate transaction, information search and performing tasks in consumer, business-to-business, and intra-enterprise communications” (Hung, Yang & Hsieh,2012,p.29-30). In recent years, mobile purchases made by consumers have increased substantially (Wang et al,2015,p.217). It is speculated that m-commerce growth will exceed retail revenue growth by 2016(p.217).

Driving Factors contributing to success of m-commerce

High mobile penetration in Singapore presents opportunities

Mobile phone usage, in a retail setting, is highest in Asia-Pacific region among other areas globally (The Nielsen Company,2015,p.9,para.1). Within Asia, Singapore has one of the highest mobile phone penetration due to the well-developed telecommunication infrastructure present and increasing usage of mobile applications as highlighted by Chung & Holdsworth’s research (2012,p.225). Furthermore, Wang et al (2015) cite “mobile lifestyles” of customers who view mobile phones as not just “functional gadgets” but as “cultural objects” in explaining this high mobile penetration(p.218). This demonstrates the popularity of the mobile platform among Singaporeans.