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Patrice NORDEY, head of Asia at Atelier BNP Paribas, has a front-row seat to observe developments in the mobility market. In this article, he informs us about the galloping growth of smartphones, particularly in China. Mobile systems are revolutionising the way people communicate, trade and exchange information worldwide.

"For years, analysts and experts have been announcing the mobile phone revolution in consumer habits. A change described as a "breakthrough" that will lead retail players and major brands to thoroughly review not only their sales model, but even more so, the way they communicate and interact with their customers.

It is true that in the (short) history of technology, this year the cumulative sales of mobile terminals worldwide (smartphones and tablets) will for the first time exceed those of computers (PCs and laptops) to reach almost 500 million units. This trend reversal is expected to increase sharply in the coming years with more than 700 million mobile terminals sold in 2013 compared to only 400 million computers in the same period (according to KPCB).

Mobile commerce, or m-commerce as the specialists call it, will obviously change the current practices of e-commerce which takes place mainly from home or workplace. But more than that, it will change the uses of traditional commerce, "in-store shopping", which still represents 90 to 95% of sales to individuals in countries where the Internet is the most developed.

The best illustration of the moment is probably the Shopkick company, launched in August 2010 in the USA. The Palo Alto startup offers its users a mobile geolocation application that allows them to earn points and receive promotional coupons if they visit partner stores. In just one year, the startup has recorded phenomenal results. More than 2.3 million consumers downloaded the application, generating more than 2 million physical store entries in a network of more than 3,000 points of sale in the United States. Once in stores, conversion rates to customers ranging from 15 to 20% were recorded depending on whether or not consumers scan product labels with their phones. In total, more than 700 million products were viewed via the application, of which 7 million were scanned during a store visit.

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The new buzzword resulting from these geolocalized services is O2O (Online to Offline): the connection of the physical world with the Internet.

In China, where more than 952 million people are now equipped with a mobile phone (September 2011), the mass adoption of smartphones and 3G is not to be outdone. More than 312 million people are already surfing the Internet with their mobile phone, including 100 million with a smartphone. In the urban areas of Shanghai and Beijing, Smartphone adoption is even reaching 35%. A rate similar to that of large American cities such as New York or Washington. And the pace of adoption is accelerating. China has already become the second country in the world for downloading iPhone applications, just behind the United States. Not so bad when you consider that the App Store was only launched in China in October 2010 !

If the O2O phenomenon started in the United States, we can expect a very large scale amplification in China from 2012, which already has 172 million e-consumers. The era of the hyper-connected consumer can begin! »

L'Atelier, BNP Paribas' technology watch unit, is a place teeming with innovation. It is also a media: daily publication of articles on the web : www.atelier.net A radio programme with BFM... and a research and consulting centre that assists companies in setting up innovative projects. The monitoring and analysis system is based on an international presence (Paris - San Francisco - Shanghai) covering the major innovation zones in the world.

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