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Markets

The technology behind every payment choice

Bango operates in large, structurally growing markets.

Using our virtuous circle business model, Bango enables merchants around the world to maximize their revenues.

We estimate a total addressable market of ~$20B, comprised of $18B in Payments and $1.2B in Marketplace.

Long term industry growth rates across both sides of our business remain strong, with the expansion of mobile commerce and the restriction of advertising data providing tailwinds.

Payment Market

$170B Spent in App Stores
$24B Spent using Alternative Payments
$18B Bango Target market

Bango Audiences Market

$76B Spent on app install marketing
$23B App Developer spend relevant to Bango
$1.2B Bango Target market

Forces impacting our markets:

Twenty years ago, Bango predicted the prevalence of mobile devices being used to access the internet for entertainment and social uses, for commerce and for business. Today this is the reality. An increasing share of activity at home and in the workplace is online, and the pace of growth in mobile commerce shows no sign of slowing down.

Taking a step back from mobile commerce, the global e-commerce market was $4.13 trillion in 2020. This represents c.18% of total retail sales. To put that in context, in 2019 e-commerce spend represented just 13.6% of total retail sales. By 2024, e-commerce is expected to grow further to $6.39 trillion (21.8% of total retail sales) [5].

Within e-commerce, mobile commerce spend was $2.9 trillion in 2020 [1]. This is expected to grow by 22% over the course of 2021 [1], in part, due to the continuing increase in smartphone ownership. In 2020, the number of global smartphone users was 6B, up from 3.7B in 2016. This number is expected to grow further to 7.3B by 2024 [2].

The increase in online commerce means customers have access to more choice than ever before when deciding where to make their purchases. One of the factors affecting online commerce is convenience., Three out of four consumers say they buy from their smartphones because it saves time [1]. This is a benefit that is amplified by the availability of alternative payments. A telco or wallet provider already has your payment information, meaning you can check out with different merchants at the click of a button, with no need to re-enter your payment information time and time again. As customer preference moves away from cash or credit cards and towards the convenience and simplicity of alternative payments, merchants are having to adjust the payment methods they accept in order to keep up.

More than just keeping up, by offering alternative payments, merchants can open-up an otherwise inaccessible customer base – customers without bank accounts or credit cards.

Alternative payment providers are innovative and agile, boosting engagement by targeting customers with relevant offers, adverts and discounts on products and services. Telcos, in particular, differentiate their services by offering rewards of desirable third-party products for customers choosing to charge payments to their phone bills.

The ever-expanding ecosystem of payment methods available and the need to ensure customers can pay via whichever route is most suitable to them means, increasingly, merchants are choosing to partner with a provider who can facilitate and manage these payments for them.

Pioneered by early wallet providers such as PayPal, LinePay and Alipay, alongside telcos offering “billing on behalf of others”, alternative payments are fast growing and ubiquitous forms of payment. The graph (below) shows how, over the next 3+ years, when it comes to e-commerce payments, mobile wallets will continue to win share from almost all other payment methods. In many regions telcos are an integral part of the wallet distribution process, promoting digital and financial inclusion.

Global e-com payment methods

Digital/Mobile Wallet
2020
44.5%

2024*
51.7%

Credit Card
2020
22.9%

2024*
20.9%

Debit Card
2020
12.3%

2024*
12.0%

Bank Transfer
2020
7.7%

2024*
5.3%

Cash on Delivery
2020
3.3%

2024*
1.7%

Charge & Deferred Debit Card
2020
3.3%

2024*
1.6%

Buy Now Pay Later
2020
2.1%

2024*
4.2%

Direct Debit
2020
1.2%

2024*
1.0%

Pre-Paid Card
2020
1.1%

2024*
0.5%

PostPay
2020
0.9%

2024*
0.5%

PrePay
2020
0.4%

2024*
0.2%

Other
2020
0.4%

2024*
0.4%

Source: Global Payments Report [3]
* forecasted

As customer loyalty becomes harder to retain, offering innovative and convenient payment methods becomes all the more crucial.

For many global businesses, accessing customers without a credit or debit card is a real issue. Uber is a great example of a company that operates in many countries where the majority of people do not have access to a credit card. In some of these countries, Uber accepts cash, however alternative payment mechanisms such as carrier billing or mobile wallets provide a simpler, safer and easier solution.

Globally, card adoption is slowing down to almost steady state while new users are attracted by the flexibility of telco billing and wallets, and, with buy now, pay later schemes, consumers do not need banks to take advantage of purchase credit.

Over-the-top (OTT) media services are internet-based services that enable consumers to stream video and audio content to any device, without the need for a satellite or cable tv subscription. Examples of OTT media services are Netflix, Amazon Prime, Disney+ and Spotify. In recent years, the growth of these services has been huge. Since 2010, revenue has grown by over 1,700% from $6.1B to $106B and is expected to grow further reaching $129B in 2021 and $210B by 2026. [6]

However, as more and more services emerge, the fight for customer attention and customer spend increases. Between November 2019 and Jan 2021, a multitude of new services were released including; Britbox UK, Disney+, Apple TV+, HBO Max, Peacock and Discovery+.

The COVID-19 pandemic has boosted demand for OTT content. However, the difficulty facing OTT service providers is in how to sustain the impressive growth figures they have been achieving.

The answer pointed to by several researchers, including Ampere and Omdia, is Bundling. By integrating with telcos and PayTV providers, these subscription platforms gain access to a much larger pool of customers.

We’ve also seen physical retailers doing the same. Large, national chains, keen to increase their engagement with customers, are encouraging purchases via their own store cards by offering rewards, including bundled subscriptions.

Changing regulations instigated by Apple, quickly followed by Google, means it is becoming increasingly difficult for digital advertisers to rely on targeting data derived from browsing and social media activity. Previously, app developers could track activity from one app to the next, enabling them to learn about customer behavior and who might be worth targeting their app to. However, with Apple and Google locking down this information, app developers are flying blind with their marketing efforts.

For context, $100B was spent in mobile games during 2020 and is set to grow to $138B by 2025 [4]. In-app purchases account for 95% of all user spend. However, in reality, 5% of users are responsible for 80% of in app spending, so finding and targeting this 5% of users who pay is critical.

The cost to a digital marketer to activate in-app purchases was $43 in 2020. This figure is 24% more than in 2018 [4]. Winning new users for app developers is key, not simply to grow their revenues but just so they can maintain them. In 2020, the average retention rates for the top 25% of casual gaming apps (action, adventure, arcade, casual, and puzzle games) was 31% after one day, which drops to 8% after 7 days and to 2.5% after 28 days [4]. That means to keep purchases coming through, these app developers need to continue winning customers and, more importantly, win paying customers.

With the ever-increasing variety of goods and services available to consumers, it is more important than ever for marketing teams to be able to cut through the noise and reach customers who will make a purchase. There are a plethora of marketing channels available, both direct and indirect, but the question of how effective are they at generating paying customers remains. With over 60% of marketers saying their customer acquisition cost has increased in the past three years [8], the evidence suggests traditional marketing methods aren’t as effective as they could be.

Increasingly, businesses are reviewing their marketing efforts and looking for more than just vanity metrics to prove their efficacy. Recent research [7] shows an increasing frustration with likes, retweets and impressions being used as metrics for successful marketing, with 65%+ of CEOs surveyed labelling them meaningless. Instead, business leaders are looking for evidence that their marketing budgets are having a measurable impact on their bottom line.

In fact, of the same group of leaders, 77% said they would allocate more capital to their marketing budgets if the activity could be targeted directly at those who buy.

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