Mobile Commerce (E-commerce)

 In this chapter we will cover the following topics

Mobile Commerce (mCommerce)

Introduction to mCommerce

Benefit of mCommerce

How does it work?

Implementation of it in our day to day life.

Market study and future of mCommerce

Mobile Commerce is on a growth track. It is gaining increasing acceptance amongst various sections of the society. This growth can be traced back to technological and demographical developments that have influenced important aspects of the socio-cultural behaviour in today's world. The need for mobility seems to be a primary driving force behind M-Commerce applications such as Mobile Banking, Mobile Entertainment and Mobile Marketing etc. A major role is thereby played by the ever increasing convergence of computers and mobile telecommunication devices e.g. cell phones.

M-COMMERCE

Mobile commerce, or m-commerce, refers to the purchase of products or services from a mobile terminal. Most of the early hype surrounding wireless technology was related to m-commerce. Companies envisioned consumers everywhere using mobile devices to purchase products. With the success of e-commerce for many types of purchases, it just made serise that m-commerce would be at least as successful. At the time, new wireless Internet technology was just coming to market, bringing with it enormous expectations.

Hurdles in the success of m-commerce

It is essentially the same as e-commerce without the constraints of a wired connection. To meet these wild expectations, wireless operators paid billions of dollars for wireless spectrum licenses so they could upgrade their networks to meet the upcoming demand. For example, in Britain, the auctions for wireless spectrum raised $35 billion (U.S.). This equates to several hundred dollars from each person in the country. Other countries followed suit, selling their wireless spectrum for billions of dollars as well. But there is one problem: The wireless operators cannot cover these costs based on current revenue, and voice and wireless Internet access do not even come close to compensating for the expenditures. The idea was that m-commerce would help grow revenue for wireless carriers as well as the service providers. Unfortunately, as of early 2003, this has not yet come to fruition, and many operators are in serious financial trouble. The idea of making purchases from a constrained device is not that attractive when there are so many other avenues available to make the same transaction. Making the purchase at a physical store location or even on a desktop Web browser is much more productive and enjoyable than using a wireless device, especially when the device is a mobile phone. mCommerce is best suited where the consumer has a sense of urgency, when they are required to have their goods or services immediately for upcoming functions and events. For product purchases, the sense of urgency is overcome by the fact that the consumer will still have to wait for the product to be delivered. In the near future, this limits m-commerce to products and services that can be obtained instantly, such as movie tickets or information services. We are still far from the time when consumers will be using their mobile devices to purchase appliances or to apply for a mortgage. Thankfully, there are some m-commerce offerings that show potential.

The following solutions should help to drive the m-commerce market in the coming years:

DIGITAL PURCHASES

The most suitable purchase for a mobile user is for a product that can be downloaded and used immediately. The two biggest markets for digital applications are ringtones and games. Many carmers allow users to download new ringtones for their devices for a nominal fee. This provides users with a way to personalize their device. Another sure-fire success is mobile and wireless games. The advances made in mobile de-vices make them great vehicles for game playing.

MOBILE BANKING

There are two benefits to mobile banking that a wireless device can provide. The first is providing access to personal bank accounts to view account history and execute transactions. This is an extension to Internet banking that has been very successful The second is using a mobile device for payments, essentially acting as digital cash. A great deal of interest has been expressed about this area, so expect it to become a reality in the near future.

INFORMATION SERVICES

Although mobility has many advantages, mobile users often feel out of touch with their daily routines. Information services help address this by providing information that the user is accustomed to having, such as stock quotes, weather information, and sport scores. With the mobile messaging technology growing in popularity, many forms of information can actually be pushed to the user in the form of an alert or notification

LOCATION-BASED SERVICES

The ability for merchants to capture and react to a user's current location and require-ments can be a powerful tool for selling services. Location-based services allow consumers to find the precise information they need at the exact time they want to use it. This will be an important enabler for m-commerce solutions, although privacy concerns will have to be addressed before location services are widely utilized.

MOBILE SHOPPING

Most forms of shopping are not going to be popular from mobile devices anytime soon. It is impractical to surf for items using constrained devices, making other meth-ods of shopping much more productive and enjoyable. At the same time, there are some forms of purchases that lend themselves well to m-commerce. For example, having the ability to purchase movie tickets for a show playing the same evening can quite valuable. Mobile devices can also be used for comparison-shopping. Before making a purchase, a shopper in a retail store may want to first see what the current price of a product is from an Internet vendor to ensure they are getting a good price.

MOBILE ADVERTISING

As mobile users start to take advantage of m-commerce solutions, mobile advertising is sure to follow. The mobile operator has access to several types of information that is attractive to advertisens, such as where users are located and what they use their mobile phone for. With this type of information, advertisers can send out personalized messages. The biggest obstacle to mobile advertising is customer backlash. If users start to get unsolicited messages and advertisements on their devices, they are likely to switch service providers, or worse, stop using their device. For this reason, in the near future, we will most likely only see requested advertisements, such as the near-est gas station or restaurant

The lack of m-commerce acceptance can be blamed on both technical and business issues. On the technical side, the devices and networks do not have compelling features for consumers to use them for purchases. The interface on most phones is inadequate for any real data entry, and the wireless networks only recently have the capacity for the content that is associated with making a purchase. Greyscale images do not do a great job of selling a product. There are also security concerns that need to be addressed.

Consumers are not convinced that e-commerce is secure, so confidence in m-commerce security still has a long way to go. On the business side, there are two major issues. The first is the lack of compelling applications. There are no killer m-commerce applications that are driving adoption. The second revolves around billing. The wireless industry has to address billing and pricing policies between the consumer and the company providing the service. Most consumers are not looking to establish billing relationships with every service provider they do business with. All of the billing has to be managed through a central source (most likely the wireless carrier) for adoption of new services to increase

M-Commerce will eventually succeed. It is just taking longer than most people expected. Devices are steadily improving in both performance and usability, and wireless networks now offer communication speeds surpassing traditional desktop modems. At the same time, wireless operators continue to offer new products and services that are suitable for mobile users. Finally, as mobile devices start to be used as digital wallets, a new form of m-commerce will emerge. Devices have the potential to replace credit cards as the primary means of making purchases. So rather than using the wireless Internet to purchase a product that will be delivered at some point in the future, it can be used to pay for a product at a physical store location, just as you would currently use cash or debit cards.

Mobile Commerce refers to wireless electronic commerce used for conducting commerce or business through a handy device like cellular phone or Personal Digital Assistant (PDAs). It is also said that it is the next generation wireless e-commerce that needs no wire and plug-in devices. Mobile commerce is usually called as 'm-Commerce' in which user can do any sort of transaction including buying and selling of the goods, asking any services, transferring the ownership or rights, transacting and transferring the money by accessing wireless internet service on the mobile handset itself.

The next generation of commerce would most probably be mobile commerce or m-commerce. Presuming its wide potential reach all major mobile handset manufacturing companies are making WAP enabled smart phones and providing the maximum wireless internet and web facilities covering personal, official and commerce requirement to pave the way of m-commerce that would later be very fruitful for them.

Mobile phones hold a lot of promise for the conduct of business. However, the starting point to achieving this promise is to understand the concepts behind the application of mobile phones to business.

Here we will discuss the concepts and characteristics of m-commerce and the principles which underpin m-commerce adoption and also the trends in mobile commerce.

M-commerce has been considered as being either one of these concepts a technology, product or service - or as combination of the three

Technology

It is the use of mobile hand held devices to communicate, inform, transact and entertain using text and data via connection to public and private networks

Product

M-commerce is a commercial application offered on an electronic medium of business transaction being deployed on a platform.

Service

M-commerce is any transaction with a monetary value that is conducted through a mobile communication network

Integration of technology, product and the service - The buying and selling of goods, services and information without any location restriction by mobile devices which uses a wireless connection to establish communication between all necessary parties to complete the transaction.

M-commerce is not just a transaction, but it extends to provide services and information.

For example m-commerce is seen to possess some mobile applications which are used to provide a number of services These services include mobile banking, payment, information and marketing services.

M-commerce us M-business

M-business is the use of mobiles or wireless devices in the conduct of all business activities of a firm both internally or externally in relation with its customers, suppliers, partners and other stakeholders.

M-business covers the application of mobiles to finance and accounting, marketing, human resources, procurement, manufacturing, transport & logistics etc.

Features of Mobiles

Ubiquity/Immediacy

Identifiabilty/Personalisation

Context Awareness/Localisation

Ubiquity represents the idea that users of the device can access needed resources from (in theory) anywhere

Identifiabilty represents the idea that mobile devices uniquely identify their user. In order to access the mobile network, both smartphones and tablets utilize the cellular network and use a Subscriber Identification Module (SIM card)

Context Awareness is enabled by the fact that mobile devices can be geolocated. In other words, modern smartphones that incorporate a Global Positioning System (GPS) receiver can communicate their position to any software application running on them

Benefits of Mobiles

Operational

Relational

Strategic

Operational benefits are associated with the reduction in coordination and search costs in delivery of products, goods and services in the marlurt place.

Improved timeliness and efficiency

Relational benefits are associated to the benefits of improved communication and relationships between actors - buyers, customers, sellers and suppliers involved in a transaction which is conducted through mobiles

Distintermediation-direct communication

Strategic benefits are associated with benefits which increase the market "reach" (access new markets) and the commitment and performance of actors involved in a transaction which is conducted through mobiles.

Deepening of relationships, customer loyalty and retention

Feature-Benefit Model

Feature

Immediacy, Time. Ubiquity, Accessibility

Localisation

Personalisation

Benefit Attribute

Cost Saving, Communication, Convenience

Convenience, Cost Saving

Convenience, Communication

Type of Benefit

Operational

Operational and Relational

Relational and Strategic

Mobile Commerce Services

Voice Services Data Services

text messaging multimedia messaging and internet access

Value-added services: Information, entertainment, marketing and advertising, banking, ticketing, payments

Factors which influence M-commerce Adoption

M-commerce adoption nefers to the process through which mobile technologies and services are selected for use by a user or a firm

Adoption entails the decision to accept and use a particular mobile device or service

Diffusion of Innovation

Diffusion is the process by which an Innovation is communicated through certain channels over time among the members of a social system

Knowledge-person becomes aware of an innovation and has some idea of how it functions,

Persuasion-person forms a favorable or unfavorable attitude toward the innovation,

Decision- a choice to adopt or reject the innovation,

Implementation-person puts an innovation into use,

Confirmation-person evaluates the results of an innovation-decision already made.

Types of M-commerce Adopters

M-commerce adopters or users play a threefold role: as technology users, as network members, and as consumers. Hence, to fully understand individuals' adoption of mobile commerce, these three integrated roles have to be explained.

As Technology Users

Technology users tend to be drawn to the technological features of the technologies they adopt. M-commerce adopters as technology users tend to be influenced by technology characteristics of m-commerce services or products.

AS TECHNOLOGY USERS

4. Perceived usefulness/Functional performance refers to the degree to which an m-commerce adopter believes the m-commerce would provides expected benefits or expected functional performance.

5. Perceived ease-of-use is refers to the adopter's perception of the minimum effort required for the use of the m-commerce service.

6. Acquisition cost is the cost of an m-commerce service or product that adopters have to pay in order to possess or own the service or product. For example, cost of mobile phone or cost of a mobile banking application

7. Operating cost is the cost that occurs when a user utilize the m-commerce service. For example, cost of airtime to make use of mobile voice services.

8. Reliability relates to how free an m-commerce service or product is from malfunctionality, including the useful lifetime of it.

9. Compatibility is the way that the new technology fits with other existing devices or business requirements.

10. Serviceability refers to how long it takes and how expensive it is to repair or reinstate an m-commerce product or service if it goes wrong.

11. Security refers to the state in which an m-commerce service or product is free from unauthorized use, misuse and disturbance during usage by an m-commerce adopter.

AS NETWORK USERS

M-commerce adopters are more than just technology users. These users are usually part of a social-business network of people such as friends, family and co-workers and trading partners.

Networks create subjective norms

1. Social Norms-perform a behaviour because society expects you to do so

2. Peer Pressure-perform a behaviour because members of a peer network expects you to do so

AS CONSUMERS

The consumer role takes place as soon as a user subscribes to a mobile telephony service with a service provider or network provider. This is a prerequisite to using an m-commerce service or product.

Consumer perspective presents two factors:

Characteristics of the mobile commerce service provider or mobile network operator,

The characteristics of the consumer

Characteristics of Mobile Service Provider Network Provider

As consumers

1. Perceived reputation, image or social capital of the service provider

2. Marketing and pricing strategies of the service provider,

3. Network coverage and infrastructure of the service providet

Constrained by

Firm-level characteristics and environmental/external pressure

The characteristics of the consumer

Knowledge of the adopter

Income level of the adopter or availability of slack resources for use on mobile services

1. The barrier effect, which prevents people from owning a phone, or from using shared access phones other than in emergencies.

2. The inhibitor effect, which discourages people from making as many calls as they need to even when they own or have access to a phone.

In effect, a customer's evaluation of factors discussed above can result in either positive or negative outcomes on the adoption of m-commerce services and products

How M-Commerce Applications are Delivered

New Payment Options

Mobile Wallet

The mobile wallet is a service which enables users to store various forms of monetary exchange-as done by the physical wallet, including debit and credit cards, coupons and loyalty cards

NFC Opportunities

NFC (near field communication) enables the exchange of data between mobile devices that ane in close proximity to each other, NFC devices are used in mobile payments as contact-less cards which communicate to other devices to facilitate payments

Implications

Consumers are more likely to spend more time and money in m-commerce if payment op-tions are user-friendly.

Carrier Billing

Carrier billing allows subscribers to pay for services and purchase applications on their mobile phone

USES OF M-COMMERCE

In the current commerce industry, mobile commerce or M-Commerce has been entered in finance, services, retails, and telecommunication and information technology services. In these sectors, M-Commerce is not only being widely accepted but also it is being more used as a popular way of business commerce.

Finance Sectors

Mobile Commerce works vastly in finance sector including all big and major financial institutes, banks, and stock market and share brokers. Whenever any user needs money or wants any sort of banking and finance related services, he/she can access the services or register services via voice calling or via Short Message Services (SMS) services. WAP based mobile handsets allow the user to access the official website of the institute.

User can transact money or transfer money, or pay the bill from its bank account using mobile commerce facilities. Banks also provide round the clock customer care services, which can be used any time through voice calling. Some customer care services are also provides non-voice services on mobile that is known as insta-alert facility.

While in the stock market, the user can access the stock market quotes and get in live touch with current trading status on its mobile in two forms either voice (customer assistance) or non-voice (sms alerts) or both.

The share broker sends market trends and tips of trading on their clients mobile. Also broker can suggest the appropriate stock for intra-day trading to their users.

Telecommunication Sectors

Mobile has played a giant role in communication technology through its versatility and superiority. The ubiquity and easy usage has further made it extremely popular across the globe. It has already surpassed the fixed phone in the world. Software platform is essential for operating any mobile and this tool has revolutionized the communication world because of its functioning as a small computer.

The booming popularity has forced the corporate world to develop a new commerce platform that can reach to masses. Mobile commerce has attracted massive traffic because of its unique characteristics. The user can change the service of any financial institute or banks if gets better product and service or user is unsatisfied with the service of the subscribing company.

Besides this several bills can be paid using mobile and user can also check the available balance, the status of cheques, and the status of requested processing and customer care support.

Several dealings can be handled through mobile phones.

Service/Retail sectors

Service and Retail sectors are also among the leading sectors, which have nurtured most from mobile commerce. M-Commerce has proved a major boon for these sectors. Several business dealings no matter how big or small are being finalized on the mobile phone. Customer would be able to book the order, can hire carrier/courier services and above all could also pay the dues related to it through mobile.

Information Sector

After the bursting of dotcom bubble, e-commerce has gone downwards to hell. But the evolution of mobile commerce has again worked as ambrosia for them. A separate sector has been evolved to exercise on this field for the IT experts. The webmasters have skilfully exploited this new area of IT-enabled commerce.

In the IT field, mobile commerce has been used massively to deliver financial news, stock updates, sports figures and traffic updates and many more onto a single handheld device 'mobile'.

TRENDS IN M-COMMERCE

Trends are defined by the new functionalities of the mobile technology, or the features and characteristics of a new class of mobile commerce applications-from which the trend typically takes its name and its impetus.

In India, it is estimated that, there are 70 mobile phone subscriptions per 100 inhabitants, and further, the ratio of mobile cellular subscriptions to fixed telephone lines is 63 to 1.

India now has nearly 74 million Internet users, a 31 per cent increase over March 2012, the report says.

The Telecom Regulatory Authority of India (TRAI) pegged the number of Internet subscribers in India at 164.81 million as of March 31, 2013, with seven out of eight accessing the Internet from their mobile phones

Indian telecom operators added a staggering 227.27 million wireless subscribers in the 12 months between March 2010 and March 2011 averaging at 18.94 million subscribers every month. To put this into perspective, China which currently possesses the world's largest telecommunications network added 119.2 million wireless subscribers during the same period.

Mobile-cellular subcriptions, by level of development

Top Mobile Markets

Top Mobile Makets

30 percent of the world's mobile users live in India and China. As of March 2012, there are now more than a billion subscribers in China, with India not far behind. Both China (1023 m) and India (919 m) have more twice the number of subscribers in third place USA (331 m)

Implications-Scramble for new and emerging markets and more competition

Tablet Commerce on the rise

A study by Adobe Research over the 2011 US holiday period found that tablet visitors spent more per purchase than visitors using Smartphone's or traditional desktops and laptops-tablet users spend 54% longer on sites than mobile users, and purchase over 20% more than desktop visitors.

Implications-Future mobile commerce applications have to be designed to be user-friendly for use on a tablet.

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