ASSIGNMENT - 2

SUBJECT CODE: MB861.1 NAME: MANAGEMENT INFORMATION SYSTEMS TOPIC: E- commerce & M- commerce SUBMISSION DATE: 5th September 2013

Submitted To: Mr. Pranav Desai.

Institute: Indukaka Ipcowala Institute of Management (Changa)

Prepared By: Group 1 ID: 12MBA001 To 12MBA020

INTRODUCTION OF M-COMMERCE
Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device. M -Commerce represents a enormous opportunity for business owners to increase sales and customer loyalty. This is especially true in a dreadful economy that has seemingly remained stagnant for the past 3 years. Where does this opportunity lie exactly? How about in he fact that while 80% of Americans own a cell-phone, only 7% of them have purchased goods or services with their cell phone, according to Nielsen. While M Commerce is still years from being universal in a mass-market industry, those businesses that become early adopters and position themselves ahead of the curve will stand the best chance to reap the benefits from future M- Commerce trends and innovative technology.

ADVANTAGE OF M-COMMERCE
1. Providing wider reach 2. Reducing transaction cost 3. Streamline business processes 4. Competitive pricing 5. Reducing time to order 6. Flexible to Access 7. Easy connectivity 8. Convenience 9. Expansive Target Audience 10. Personalization 11. Time Saving 12. Increasing Productivity

EASY CONNECTIVITY Another great thing with Mobile Commerce is, it is available on an easy connection. As long as your network signal is available, it is easy that your mobile devices get connected over to internet. It not needed to look for modem and wi-fi connection anymore. Any number of transactions can be made with a single mobile network.

CONVENIENCE And obviously the convenience! It is obvious that with a handy device via m-commerce, convenience is assured. Wherever you are, with merely few clicks on your mobile device, it is pretty convenient to do shopping, banking and download your favorite media files.

EXPANSIVE TARGET AUDIENCE The wider your target audience, the sooner your business growth. Conducting business transactions via Mobile commerce helps in increasing the number of users. By connecting to a larger number of audiences you are able to generate higher sales and therewith enjoy increased profit returns.

PERSONALIZATION One reason why users fall for mobiles is the personalization option they enfold. Each device is personal to the person who is using it. With mobile commerce, any user would be able to modify the theme, change the setting, modify the contact information and have the very control of sending emails, e-payments and so forth.

TIME SAVING For making an m-commerce transaction it is not needed that the user needs to plug in his laptop or PC and wait for the system to reload. It is enough that you just hit a single button on your mobile device.

INCREASING PRODUCTIVITY The productivity aspect of businesses will certainly witness enhancement with mobile commerce. It is not possible for an employee of a concern to sit for 24X7 hours in office and at any time, any instant he would have to leave his office. But, it is not assured that whether the work is done properly or not. With a m-commerce solution, this sort of issues can be over dealt resulting to productivity/sales enhancement.

DISADVANTAGES OF M-COMMERCE
1. Small screens of most devices still limit types of file and data transfer (i.e. streaming videos, etc.) 2. Standards guiding applications and technology development and connection 3. WAP and SMS limited to small number of characters and text. 4. Use of graphics limited 5. Less functionality for mobile Internet over mobile phones and existing generation of handhelds than for mobile computers (laptops and next generation handhelds) 6. User interface is often difficult to learn how to use 7. Limited bandwidth 8. Limited roll out of higher bandwidth mobile networks and devices (i.e. 3g networks and wireless broadband networks are predominantly located in cities) 9. Cost of establishing mobile and wireless broadband infrastructure 10. Technology constraints of mobile devices (memory, processing power, display capabilities, input methods) 11. Security of data moved across some mobile and wireless networks 12. Businesses investment in hardware and infrastructure is seen as riskier as rapid evolution of mobile and wireless technologies continues.

CHALLENGES OF M-COMMERCE When focusing more on the mobile shopping experience, many of these barriers for mcommerce can be overcome. The three issues that concerned Smartphone users and prevented them from using their devices to engage in m-commerce revolve around: 1. Safety and security. 2. Connectivity. 3. Screen size.

SECURITY AND SAFETY CONCERNS

CONSEQUENCES FOR M COMMERCE The primary issue revolved around security. Users feared that their devices would be attacked by viruses, resulting in the theft of personal data. Those people using Blackberry and Android feared the interception of their data the most. People interested in e-commerce seemed to be most comfortable doing so at home. The home setting gives the buyer familiarity. The software and technology sitting on a desk at home feels secure and protective and keeps the bad guys out. That security is recognizable, and it works. On the other hand, users of mobile media havent yet given the thumbs up to the security featured in mobile devices. The survey also found that smart phone users felt exposed in public, concerned about someone peaking over their shoulder as information is keyed. This is why people felt more secure buying from sites where their buying data is already stored.

MOBILE COMMERCE AND THE LIMITS OF SMALL SCREEN SIZES Users didnt like the small screen size. The primary compliant cantered around the inability to get a good look and feel for the product. Unless a buyer is familiar with a product or the products appearance doesnt matter, users are hesitant to buy an item on a smart phone. Screen sizes and the behaviour of smart phone users are not taken into account enough in general, whether it concerns e-commerce, mobile websites or mobile email. THE MOBILE USER EXPERIENCE AND THE SPEED CONCERN Users also voiced concern over slow or unstable connections, fearing they would be cut off in the middle of an e-commerce transaction. This is another reason why buyers prefer buying from home. These are matters that remain a challenge to businesses that want to sell products to buyers on mobile devices. The small screen size on smart phones will probably not be solved soon.

INTRODUCTION OF E- COMMERCE
E-commerce has revolutionized the concept of conducting business by providing equal chance to all the businesses to mark their global presence. It has also eased the customers with online shopping and easy transactions. With the introduction of e-commerce business, communication has become effortless and has also changed a lot in recent years for the better. Still, there are people who think that conventional business practices are far better than the e-commerce business. Here, we are bringing you some of the benefits and limitations of e-commerce that will make you aware of the certain aspects of this new trend of conducting business. SWOT ANALYSIS OF E COMMERCE AND CHALLENGES OF E COMMERCE STRENGTHS What do you do better than others in your industry? Do you offer a unique comparison method? Do you have less expensive shipping? Are you able to offer cheaper products of the same quality as your competitors? Do you offer niche products that arent available elsewhere? These are your competitive advantages. Typical e Commerce strength is having lower operational costs than a brick-and-mortar retailer. WEAKNESSES Unlike a typical retail store, e Commerce must take into account shipping times. Because of this, there is no immediate satisfaction from the customer. Shipping also creates additional headaches with heavy, perishable and awkward items. Online payments still cause some hesitation with some customers, so security and fraud concerns may make people reluctant to make purchases. PayPal is a widely-accepted form of secure online transactions and may help minimize this concern.A typical e Commerce weakness is the customers inability to touch the products. This can include proper fit for clothing, the functionality of an electronic device, the size of an item, etc.

OPPORTUNITIES You should always be asking yourself What new methods can I utilize to help grow my business and maintain an advantage over my competitors? and Where are my competitors vulnerable? The rate of change for e Commerce has seen a steady incline over the years. New technologies and features have made it easier for brick-and-mortar retailers to compete with online-only merchants. Fortunately for online-only retailers, software

improvements have made shopping cart technology faster, more secure, and more userfriendly. Live chat options for customer service have revolutionized instant-gratification for customer concerns and questions. Social media now provides a free platform for promotions and advertising and customer relations. In order to take advantage of these e Commerce opportunities, the online merchant needs to stay current and be willing to adopt new features as they arise. THREATS Any good business owner knows how important it is to keep up-to-date on industry shifts that may affect growth. Often we think of these shifts as new technologies, consumer behavior, etc. What can get overlooked are legal and regulatory changes. For example, AODA compliance may affect online retailers in Ontario starting in 2014. The ease with which companies can start an e Commerce site is a constant threat. People can now sell via Facebook, eBay, Etsy all without setting up a whole website at all. The big names in e Commerce like Amazon will always have more room for undercutting their competition on price. Thankfully, there are up-and-coming technologies that make cheaper shipping and lower costs available for online merchants so they can compete with the big players. Offering niche products are also a way to diminish the threat from sites like Amazon.

BENEFITS
Expands the reach of your business to the global market: The foremost advantage of e-commerce is that it empowers the business to reach the global market. E-commerce caters to the demands of national as well as international business simultaneously and brings your business activities out of geographical boundaries. With e-commerce, even small businesses get the access to the global market. Round the clock availability: E-commerce has abolished time restrictions on business activities because with this you can execute business transactions 24X7. The time factor significantly turns into the increment in sales as well as profits. Gives freedom to make choice: It also gives customers an opportunity to look for cheaper and better quality products. With e-commerce, consumers can search the specific product or service they require and can even find the direct manufacturer from where they can purchase products at comparatively less price. Shopping online is time saving and convenient. In addition to it, you also get to see the reviews of other consumers that will help you in making beneficial purchase decision. Cost effective: E-commerce is proved to be highly cost effective for business concerns as it cuts down the cost of marketing, processing, inventory management, customer care etc. It also reduces the burden of infrastructure required for conducting business. You can also collect and manage the information related to the customers efficiently, which in turn will assist you in developing efficient promotional strategy.

LIMITATIONS
Technological and inherent limitations: The technological limitations of e-commerce have restricted a large number of people from using this revolutionizing technique. The major disadvantage of e-commerce is the limitation of the Internet, as it still has not touched the lives of every individual. Lack of knowledge restricts large number of people from using the internet and understanding online transactions. Some people refuse to trust the legitimacy of online business and some are not comfortable about disclosing their 9

personal and confidential information online. Authenticity of e-commerce businesses has always remained in question. Not suitable for perishable commodities: The biggest limitation of e-commerce is that it is not suitable for perishable goods and food items. For purchasing such items people prefer the conventional way of shopping. Along with that, the time period also plays a significant role in delivering goods to the customers. Customers may need to make lot of phone calls and e-mails for getting the products within the desired timeframe. Moreover, it becomes really troublesome to return the product or get refund in case if you are not satisfied with the product. Pestle Analysis of E-Commerce: (PESTLE Analysis)

Political

Economical

Social

Technological

Environmenta l

Legal

The E-commerce is affected by above group of factors. E-commerce provides the infrastructure and environment that enables the e-business. Therefore the environment scanning is very much crucial. The detailed list of factors affecting the E-commerce is as under, Political Factors: Number of government initiatives that promotes development and use of new technologies. Public policies of the Government for the support to the growth of electronic transactions and processes. For example, supporting e-filing of tax returns Economic Factors: Economic growth Average income Cost of technology (hardware and software) Innovation in business models Cost of access to telecommunication infrastructure Advancement of banking in payment system 10

 Commercial infrastructure Social Factors: No. of online users Level of education It skills and computer literacy Willingness to adopt new technology Skilled workforce

Technological Factors: Backbone infrastructure and architecture Internet service provider Range of services provided (e.g. ASDL, ISDN) Access to new technology developments Bandwidth Speed of development and implementation of new technology by industry sector Speed of internet

CHALLENGES OF E COMMERCE 5 key challenges that Indian e-commerce startups will face in the coming years 1) Finding a Niche In a conversation with Mukesh Bansal, Co-Founder and CEO of Myntra, he had stated that finding a niche in e-Commerce means finding people who will be willing to transact over the internet for a specific product. Contrasting to this approach, is Snap deal, which goes full out on assortment and having everything under the sun on their online catalog. Kunal Bahl, the co-founder of of Snap deal places assortment above all else. While Snap deals approach is going to need a lot of funding (an investors worst nightmare), a niche ecommerce site is something that a startup can take up. But there are too many niche e-Commerce players in the market and finding a large enough market willing to buy online is going to be the first and foremost challenge for a startup.

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2) Customer Acquisition To get people to come on an e-Commerce site and make a purchase involves heavy cost due to advertisement and marketing. This cost is significant and can be brought down to cost per customer. Experts say that the average figure for this metric in the current eCommerce ecosystem is between INR 500 1000 customer, which isnt sustainable for even medium sized companies, let alone early stage ones. This is the next biggest problem that an early stage e-Commerce startup will face. 3) Reliable Logistics and Supply Chain This is a good problem to have. If youre facing problems with respect to logistics and supply chain, there are transactions that are happening at your portal. However, failure in this area can mean detrimental damage to a startups future. The average Indian customer poses great trust issues for e-Commerce transactions and this in effect hurts the brand overall. Bad products, which are almost a given when working at scale, also require reverse logistics. The longer a faulty product from an e-Commerce portal stays with a customer, the worse the reputation of the e-Commerce portal gets. Getting this right will be a challenge, and experts who know what to do are far and few. 4) Customer Service Customer service is something that is overlooked in the Indian context. However, in this dense e-Commerce market, quality customer support is going to be a big differentiator. Reassuring customers of a situation or telling them the status of a process is sometimes all that is needed to keep the customer from hitting the panic button and taking to public media. Getting customer support oriented resources in India will be a challenge that a startup can face.

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5) Raising Funds to Scale Once an e-Commerce company has got its traction going, getting the branding right is going to be quintessential. Every e-Commerce success in India has got their branding right and has been an important part of their scaling process. This, however, will require funds. The current funding bodies are once bitten, twice shy about funding e-Commerce companies in India. An e-Commerce company can bootstrap to a certain extent, scaling requires funds. A large majority of them have failed in this phase. So even if youve got your act right, past record in the industry is working against the early stage startup at the cusp of scaling.

DIFFERENCE BETWEEN E COMMERCE & M COMMERCE

Transactions o In e commerce, transactions are done by internet using laptop and desktop while, in m commerce, transactions are done on a cellular and mobile device. Requirement o E commerce not only needs internet but also electricity where as there is no such requirement with m commerce. Use o We can use e commerce to only those places where we have net connectivity, but with m commerce we are free from all such boundaries. Charge o M commerce is usually charged through the callers premium rates, charging the users bill or reducing the callers credit. While, E commerce is charged through the use of swipe machines where you swipe your credit card. Easy to carry o M commerce is very handy and easy to carry while E commerce you cannot always bring with you your computer or laptop anywhere. 13

Faster to reach consumer o In commerce, it may possible that person may not always have a laptop or computer with them while in m commerce, person will always have their cell phones with them. So it allows business to reach consumer even faster compared to e commerce.

Costly o M commerce however is costly compared to e commerce. Video conferencing o It can also be done through m commerce but it is not possible in e commerce. COMPARISON OF E-COMMERCE TO M-COMMERCE The term E-commerce electronic commerce, is the process of buying and selling goods, products and services over electronic system such as internet, telephone and email. M-commerce mobile commerce is the process of buying and selling product and services through wireless handheld devices such as cell phones or PADs. M-commerce v/s E-commerce M-commerce and E-commerce both refer to the field of marketing- buying, selling, distributing and serving different products through commercial truncations on internet with the use of specific devices or computers. M-commerce stands for mobile commerce where in commercial transaction are done using mobile phones that access to the internet. Before there was no M-commerce because phones with internet capability were not available; however, when mobile phones with internet capability were invented, marketing has expanded more. Not only are business transactions done outside and through the internet, but also through mobile phones has sky rocketed. Today, many phones have to the internet. With the rise of some technology, M-commerce is becoming more popular. E-commerce stands for electronic commerce where in business transactions are done over the internet. Usually transactions are done using a computer or a laptop. This has become very popular now, because computers with internet capability have become very accessible to people.

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M-commerce is very portable because mobile phones are very easy to carry. You can do your business transaction anywhere you go as long as you can access the internet on your phone. E-commerce, you have to do your transaction on the computer. Laptop is also portable but not as light as mobile phones. Then you still have to look for a place to do your transaction because it would be uncomfortable using your laptop anywhere or while you are standing. M-commerce is usually changed through the callers premium rates, charging the users bill, or reducing the callers credit, and also through mobile banking. E-commerce is charged through the use of swipe machines where you swipe your credit card. You can also transfer money through online banking and pay for the products you bought on the internet using your credit card number. M-commerce is available anywhere you go even if there is no internet because the internet is available in your mobile phones. E-commerce is not available everywhere because not all place have internet connection. Compared to M-commerce, E-commerce is more limited as it requires the use of a computer and internet connection, while mobiles work on satellites. Video conferencing is now available on mobile phone with 3G and 4G networks, without the hassle of internet. M-commerce however is costly compared to e-commerce.

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