Professional Documents
Culture Documents
Mobile Commerce Part
Mobile Commerce Part
BY
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Table of Contents
1. Introduction ........................................................................................................................ 3
Keyplayers ........................................................................................................................ 12
7. Business Applications........................................................................................................ 13
Standardisation ................................................................................................................. 18
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1. Introduction
The ability to conduct commerce using a mobile device such as a mobile phone, PDA or a
smart phone is termed as M-Commerce/U-Commerce (owing to the ubiquitous nature of the
services offered. The definition of M-commerce is as follows
The birth of M-commerce goes back to 1997 when mobile phone enabled Coca Cola vending
machines were installed in Helsinki, Finland. Ever since then M-commerce has grown rapidly
and steadily in various forms such as mobile phone banking service (1997, Merita Bank,
Finland), digital content sales as mobile phone downloads (1998, Radiolinja, Finland), m-
payment systems (1999, smartmoney, Phillipines), mobile internet platform (1999, DoCoMo,
Japan), mobile parking, mobile train ticketing and even mobile air ticketing.
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2. Mobile – Changing the people lives
Over the past 10 years mobile phones have changed the way that we live and work. What is
the nature of this change?
On one hand, it’s a change in personal freedom. The mobile phone seems to give us more
power as individuals to do what we want and be who we want to be. Many people consider
mobile phones as extensions of themselves. This is shown by the wide variety of mobile
phones available and the myriad ways of transforming each phone into a truly personal
device.
These days it’s more likely that you’ll forget your keys than your mobile phone when you
leave home in the morning. As technology advances, mobile phones are able to be used to
extend the reach of the person and delegate many functions that would previously have been
more time consuming or would have to be carried out in person. As individuals, we expect to
be able to do things whenever we want to and mobile phones are core devices enabling this
expectation to be fulfilled. This means that there is a fundamental shift in our perception of
space and time - of what is possible where and when.
On the other hand, mobile phones are connecting people more than ever before and becoming
new glue holding together social interactions and relationships. A mobile phone makes us
available to others, be they businesses or individuals, 24 hours a day, 7 days a week. This is
an enormous break with the past, when we needed to know where a person was in order to
contact them. It gives enormous opportunities for businesses to really connect with and
understand consumers and for consumers to have more meaningful relationships with
businesses.
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3. Mobile Phones- Revolutionary Devices
Mobile phone manufacturers have developed mobile devices that can serve many functions
beyond voice communication such as taking photos and listening to music. Mobile network
operators are offering services that give greater value to subscribers, such as portable email
for business users. In most markets; phones with the characteristics below are already
becoming available:
• A communicative device
The mobile phone will continue to be a device that is used to communicate with
others. Although this may be extended beyond voice to instant messaging and email,
it is important not to forget communication is a central strength of mobile devices.
• A connective device
Mobile phones enable people to connect to other sources of data anytime, anywhere.
This is what is happening with mobile email. As data on the web becomes more
structured, mobile devices will become more and more powerful as entry points to
tasks that have moved from offline to online but are currently still only available
through fixed computers.
• A transactional device
Mobile phones are ideal devices to be used for payments and transactions. There are a
wide range of applications that aim to transform the mobile phone into an electronic
wallet that can be used as a payment device.
• An intelligent device
Mobile phones are a place where multiple applications can meet and fuse. Mobile
devices that integrate a phone, a camera, a location finder (GPS) and a connection to
the internet make it possible for a user to request context-dependent information such
as finding out where a store selling a product they want to buy is located. As usage
increases, mobile phones can become agents of change, tools that facilitate connecting
things in the physical world to information about them in the digital world.
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4. M-Commerce Technologies
Mobile commerce (m-commerce) is built on several key technologies. Some are very well
established, others are much newer and less common.
Mobile phones have gone through a number of changes in the standards that they use:
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M-commerce: 3G phone technology focused
Wireless application protocol (WAP) enables mobile devices to browse the internet
because the web browsers built into these devices support hypertext markup language
(HTML) and extensible markup language (XML) - the key languages used for internet
content.
WAP-enabled devices run microbrowsers. These are applications that suit the:
Another important m-commerce technology is short message service (SMS), also known as
texting. This popular service allows short text messages of up to 160 characters to be sent
from and to mobile devices at a low cost. This has a wide application in m-commerce
technology. Improvements to the service, such as T9 predictive text to help you type faster,
have helped to improve the service, and a number of enhancements such as enhanced
messaging (EMS) led to multimedia messaging service (MMS) messaging.
Businesses are also increasingly utilising Bluetooth technology to send out messages to
Bluetooth-enabled devices. Bluetooth server can detect devices and send out messages in a 10
to 100 meter range. A restaurant, for example, can send out discount coupons during lunch
hour or even an entire menu to potential customers. Similarly, a nightclub can send discount
coupons for drinks or a free admission pass for an event in the future.
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5. Mobile Commerce -Size of Market and Key players
Juniper Networks, in its "Mobile Entertainment Markets: Opportunities & Forecasts, 2006-
2011" report has estimated that the global market for Mobile Entertainment Products and
Services will grow at a 35 % cumulative annual growth rate. The growth from 2006-11 is
shown in the figure below:
It is predicted that the less price sensitive early adopters from the 13-25 age group could drive
the initial growth of M-Commerce. Growth in mobile products such as ringtones, games, and
graphics may displace spending on many traditional youth products such as music, clothing,
and movies. This would radically change the dynamics of all visual entertainment and
product-service distribution worldwide so marketers could target end-users with diverse
youth mind sets. The youth market has historically shown rapid viral growth which later
gains acceptance in the mass market. While emerging markets are proving to be the ideal
solution for sustaining revenues in the face of falling ARPU average price per unit, analysts
say the rapid commercialization of 3G services is likely to open up new opportunities in
developed markets.
While mobile commerce is still in its infancy, its market share with respect to e-commerce is
expected to explode over the next several years with the proliferation of Smartphone users. It
is estimated that currently 5-7% of the major online retailers offer an m-commerce site in
addition to their e-commerce site.
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Key players in the Mobile commerce industry around the world are AT&T GoPhone,
Clickatell, DJuice, LISMO, MMode, SendMe Mobile, Digital River and TextJam. These
companies cover the various fields of mobile commerce, such as mobile entertainment,
mobile banking and mobile payments.
It should also be noted that Mobile commerce industry has played a large part where critical
infrastructure like bank branches and high-speed internet is often lacking. In such places,
people use mobile phones for all sorts of things including mobile banking, mobile money
transfer, mobile education, and mobile medicine.
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6. M-Commerce in India
The m-commerce sector is poised for growth in the Indian market owing to its intrinsic link
to the booming mobile telephony sector in the region. While m-commerce is in its nascent
stages, it is slated to boom over the next few years with growing sophistication and lower
prices of mobile handsets. Currently, users of m-commerce perform a wide variety of
transactions via mobile from paying of utility bills and purchase of movie tickets to shopping
and holidays. While the uptake of mobile payments is still gathering pace, services that are
more accessible and easier to use are finding favour.
With the RBI’s support for m-banking and the release of its guidelines on mobile banking
transactions (Sept-Oct 2008), banks have sped up their roll out of m-payment products with
banks such as Standard Chartered, SBI and IDBI Bank launching their services.
The following snapshots give an approximate picture on the growth of the M-Commerce in
India in the coming years.
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GPRS enabled phone users in India
Snapshot of the Indian popular M-Commerce activity for urban Indian mobile phone users.
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Keyplayers
• Obopay Inc., a Californian mobile payment service provider and Bangalore’s mChek
India Payment Systems Pvt. Ltd are among a fast-expanding breed of mobile
payment service providers which have planned offerings that work within the
guidelines and bring the convenience of mobile transactions.
• Paymate powers your phone to instantly send and receive money, pay for retail
purchases, monthly utility bills, flight & movie tickets and so much more with
unmatched ease, speed and safety. Its mobile payment solutions link mobile phone to
any financial instrument of choice, whether it’s an existing bank account, credit card
or a prepaid account.
• Ngpay is downloadable free application on mobile phone and helps to access end-to-
end mCommerce services from over 80 businesses across 10 sectors.
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7. Business Applications
This section gives an overview of the current and potential applications of mobile commerce.
Business-to-Consumer Applications
These applications revolve around making life easier and richer for consumers and deepening
the relationship between consumers and businesses, so that consumers feel they have more
say in what they consume.
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• Interactive Publications
Key concept: Publication readers can retrieve more information using their mobile
phone
• Trial of digital/non-digital media
Key concept: mobile phones are used to trial books, magazines, music and video
• Personal Safety
Key concept: mobile phones are used to alert current location
• Text to voice
Key concept: mobile phones translate text to voice for elderly or visually-impaired
consumers
Business-to-Business Applications
These applications centre on making businesses more efficient and enabling closer
collaboration between business partners.
• Ordering
Key concept: Mobile phones are used to reorder products with orders sent to the
supplier in a standard format.
• Delivery Confirmation
Key concept: Mobile phones are used to report or retrieve information about the status
of orders during the transport and delivery process
• Stock control
Key concept: mobile phones can be used to keep track of stock and send updates to a
central database
• Supply Chain Information
Key concept: information about the supply chain processes is available via a mobile
device
• Traceability
Key concept: mobile phones are used to access traceability information about a
product
• Distributed teams/collaboration
Key concept: mobile phones are used by teams to work together more effectively
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8. Factors aiding the growth of M-Commerce
Thus the natural progression of these trends leads to growth in commerce via a device that is
connected, on the person and offers convenience unmatched by any other channel.
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9. Challenges in M-Commerce
• Security
• Wireless Constraints
Developing content for wireless devices requires rethinking the Web experience.
Wireless content developers need to begin from the ground up, developing content for
these new devices. These devices tend to have little real estate available for viewing
content—often as small as 14×7 characters. Wireless devices also tend to be
monochromatic, so images do not render well. Keyboards are difficult to use.
Wireless devices tend to have limited CPU, memory, and battery life. Developers and
designers need to find new, intuitive navigational techniques to overcome these
constraints.
• Privacy
Privacy is another issue not resolved by the growth of m-commerce. The new
connectivity of consumers to the Internet is a great convenience for consumers, but it
also comes at a price. The price is the value of privacy that individuals lose, as they
become hooked-up to the Internet. One part of privacy is that the development of
smart cards for use with cell phones is convenient for consumers wanting to buy or
sell. However, much personal data is enclosed on the card, and it could be used for the
wrong purposes. Many cell phones can be equipped with a global positioning chip
that can identify the location of the user. This new technology would be good for
emergencies but could also be used against the individual for monitoring purposes or
other activities.
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• Continuous Change
A key challenge that companies will face as they build businesses for the wireless
and wired age is that they will need to integrate capabilities and disciplines that are
quite separate in most organizations today. These include creative thinking, seasoned
business skills, a deep understanding of technology and technical issues in both
telecommunications and information systems, an understanding of how all this will
evolve, and well-honed skills in design and branding. Executives will need to begin to
think now about how to assemble these skills and how to create processes for
effectively coordinating them. As they build these new digital businesses, executives
should not underestimate what they already know. The lessons learned from the many
business successes and failures we have seen during the last five years on the wired
Web, apply to mobile businesses as well, and to the integrated wired and wireless, on-
line and mobile businesses of the future.
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10. Steps to make m-commerce the success story
Standardisation
Most importantly there is a need to develop standardization in the mobile commerce
space. By that we mean unified processes of running of m-commerce transaction.
With the number of platforms now available, retailers find building a plethora of
mobile applications not worth the effort, leading to companies not committing
themselves for m-commerce. Mobile applications and shopping opportunities out
there can be tapped only when companies commit themselves, which can come when
marketers see the numbers.
Consumer Experience
Consumer experience and the transaction process must be improved to observe real
growth in m-commerce. It needs to be ensured that services themselves work as
advertised while still simple enough for use by the average mobile phone owner.
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11. Conclusion
As m-commerce applications and wireless devices are evolving rapidly, one will take
forward the other one towards empowering innovation, versatility and power in them. There
are a number of business opportunities and grand challenges of bringing forth viable and
robust wireless technologies ahead for fully realizing the enormous strength of m-commerce
in this Internet era and thereby meeting both the basic requirements and advanced
expectations of mobile users and providers.
There are people, who are ordering things over the Internet while waiting for a bus,
downloading merchant coupons on their PDAs as they enter a store or bidding for the last
table at a hot restaurant by digital phone in a spur-of-the-moment auction. Actually this
process represents a tip of a very big iceberg. The advent of m-commerce, as widely referred
to among the users, has far-reaching implications. But there are many limitations in the
technologies that Once its relevant technologies get matured, widely available and
competent, the host of portable devices will be ready to handle the bigger transactional
activities not envisioned so far successfully apart from these minor activities.
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12. References
6. TRAI Report
7. IMRB Research.
8. www.gs1.org/docs/mobile/GS1_Mobile_Com_Whitepaper.pdf
9. http://www.peterindia.net/M-CommerceOverview.html
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