GENEVA — A large percentage of the projected $1.7 trillion in new investment by major mobile operators over the next five years is expected to go toward upgrading broadband networks to higher transmission speeds, such as 4G mobile, a report by an international expert group said.
The upgrade is also expected to boost the number of mobile broadband subscribers worldwide and with it, the possibilities for growth in m-commerce, including in fashion and apparel, especially in the Asia-Pacific region.
The new investments “will clearly boost more e-commerce sales,” said Torbjörn Fredriksson, chief of information and communications technology at the U.N. Conference on Trade and Development. “But 4G allows for quicker downloads and better quality, and migration to mobile broadband will also improve the number of consumers.”
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The “State of Broadband Report 2015,” compiled by the Broadband Commission for Digital Development, a grouping which includes political leaders, top industry executives, academics and international agencies, estimates mobile broadband will reach 3.5 billion people by the end of 2015 (nearly half through smartphones), or nearly half of all mobile subscribers. That number is expected to climb 85 percent of all mobile subscribers by 2020.
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“Smartphones now dominate broadband devices, and will continue to dominate for the foreseeable future,” the report said.
Phillippa Biggs, senior policy analyst at the International Telecommunication Union, and a lead author, said Asia-Pacific now accounts for half of the world’s mobile broadband subscribers.
The study highlights that China’s 3G user base declined in the first half of 2015 to 214.8 million, down from 245.8 million at the end of 2014, while its 4G customer base more than doubled to 189.7 million from 90.1 million six months earlier.
E-commerce experts believe this also augurs well for growth in online retail sales.
Tim Kelly, lead information and communications technology specialist at the World Bank, said, “E-commerce is continuing to grow at a pretty rapid rate,” pointing out business surveys that show apparel is second in popularity for online purchases after electronics.
“Apparel does pretty well in China and India, though not so well in the Middle East and Latin America,” Kelly said.
A report by the management consultants A.T. Kearney on the 2015 Global Retail E-commerce Index estimated retail e-commerce sales worldwide rose by 21 percent to $839.8 billion in 2014 and expects them to expand this year by 18 percent to $994.5 billion. The study, which ranked the top 30 countries in e-commerce sales, also revealed that of online buyers surveyed, on average, 76 percent bought fashion and apparel in the past three months, the second-highest category after electronics with 77 percent.
The online fashion and apparel purchase rates included China, with a high 97 percent; Germany, 88 percent; the U.S., 87 percent; the U.K., 85 percent; India, 84 percent; Brazil, 75 percent; Japan, 66 percent; Nigeria, 65 percent; Russia, 64 percent, and South Africa, 47 percent.
However, experts said there remain serious impediments to even faster growth in e-commerce.
Kelly said the main barriers are on the supply side (low use of credit cards in many countries), but also noted on the demand side (few countries have well-developed delivery mechanisms for home delivery, and some countries lack proper house addressing systems). He said an emerging development is “cash on delivery” type arrangements, which started in China, and are now growing in popularity in Africa.
But cash on delivery online retail does not offer the convenience that credit card-based e-commerce does since the consumer has to be home when delivery is made, Kelly said.
Similarly, Fredriksson said that an average of only 47 percent of countries have consumer protection laws addressing online sales. In Africa it’s only about one-third of countries; for Asia-Pacific, 37 percent; Latin America, 54 percent, and in developed countries, 86 percent, he said.