International Journal of Technical Research(IJTR)

Vol 1, Issue 2, Nov-Dec 2012

ISSN 2278-5787 Page 32

M-COMMERCE AND ITS GROWTH: AN ANALYSIS Ms. Seema Grewal

Lecturer, D.N.P.G College,Hisar seema76544@gmail.com

Abstract--Driven by a widespread understanding of the

Internet's capabilities, the power of electronic commerce,

and advances in wireless technologies and devices, mobile

commerce (m-commerce) is rapidly approaching the

business forefront. Mobile commerce well known as M-

commerce is the subset of E-commerce which includes all E-

commerce transactions by using hand-held devices (a mobile

handset (cell phone), PDA, Smartphone and other emerging

mobile equipment.) and wireless network. It is the next

generation wireless e-commerce that needs no wire and

plug-in devices. It is gaining increasing acceptance amongst

various sections of the society. 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. As the Internet started to

proliferate in many parts of the world, the mobile phone

penetration in terms of voice communication and online

commerce started to grow rapidly. This simultaneous rapid

growth has caused a new phenomenon of convergence of

Internet computing and mobile communication where M-

commerce has its root. The m-commerce industry is

predicted to have huge growth, and we are now experiencing

the second wave of m-commerce born out of consumer

expectations and convenience. Use of mobile phone has

increased so much that it is not just a device to make calls,

but an important medium to fulfill all the financial needs for

friends and family. Now, mobile phone technology has made

another leapfrog to pave its way for a new trend called

mobile commerce where the financial transactions are made

using mobile devices.

Keywords--M-commerce, E-commerce, Mobile phones,

Banking and Technology

1. INTRODUCTION

M-Commerce is a by-product of the technology convergence

of Information Technology (IT) with the telecommunication

technologies (TCT), which is jointly referred to as

Information and Communication Technologies (ICT). M-

Commerce may be thus regarded as an extension of

Electronic Commerce (E-Commerce) to wireless mediums.

This convergence, however, enables some unique, location-

based services, which is not possible in E-Commerce. These

innovative services are made possible by the convergence of

these two technologies. Today, the scope of M-Commerce

encompasses almost every walk of life. Mobile services are

reported from the fields of content, entertainment, travel,

banking and marketing. After the internet revolution the

mobile revolution is all set to sweep the Indian soil. This

concept has guided the Indian business world to shift their

focus towards the ignored rural markets. There is

tremendous opportunity for mobile technologies based

business models to explore the market around the rural poor,

and translate it into a business opportunity to serve around

75 million rural population in the country. Unlike the e-

commerce based business models, mobile technology based

businesses can overcome barriers of literacy, availability and

cost. The new mobile devices are feature rich and user

friendly so as to enable an illiterate to operate. M-commerce

is difficult to define and can be interpreted in a variety of

ways. This is because M-commerce is a fairly new

phenomenon and several definitions of it exist. M-commerce

can be defined as “all activities related to a (potential)

commercial transaction conducted through communication

networks that interface with wireless devices”. Another

definition of M-commerce is “the use of wireless device to

communicate, interact, and transact via high speed

communication to the internet’’ (Shuster, 2001, p. 2).

Angsana (2002) emphasizes on three elements of M-

commerce – a range of activities, devices, and network types

– and defines M-commerce as “all electronic transactions

(e.g., communication interaction, purchase, payment) that

use data-enabled wireless device connection to the internet

or to a vendor’s private network”

2. M-COMMERCE

Mobile Commerce is the use of information technologies

and communication technologies for the purpose of mobile

integration of different value chains a business processes,

and for the purpose of management of business

relationships. It is also said that it is the next generation

wireless e-commerce that needs no wire and plug-in devices.

Mobile 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.

International Journal of Technical Research(IJTR)

Vol 1, Issue 2, Nov-Dec 2012

ISSN 2278-5787 Page 33

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. Basically m-commerce is like

e-commerce except m-commerce transactions typically take

place through a mobile Web page or a text message. These

can show up as barcodes on mobile phones. It involves new

technologies, services and business models. It is quite

different from traditional e-Commerce. Mobile phones

impose very different constraints than desktop computers.

But they also open the door to a slew of new applications

and services. They follow you wherever you go, making it

possible to look for a nearby restaurant, stay in touch with

colleagues, or pay for items at a store. M-commerce (mobile

commerce) is the buying and selling of goods and services

through wireless handheld devices such as cellular

telephone and personal digital assistants (PDAs). Known as

next-generation e-commerce, m-commerce enables users to

access the Internet without needing to find a place to plug in.

Wireless Application Protocol (WAP) is the emerging

technology behind m-commerce.

3. DEVICES USED IN M-COMMERCE

M-commerce is not just about using mobile phones as end

user devices. The following list gives an overview of

different kinds of mobile devices.

Mobile phone

PDA (Personal Digital Assistant)

Smart phone-the smart phone combines mobile

phone and PDA technology into one device.

Laptop

Earpiece (as part of a personal area network)

4. MERITS OF M-COMMERCE

1. Mobility- as users can carry their cell phones or other

mobile devices easily.

2. Broad reaches ability/ Ubiquitous computing- people

can be contacted anywhere and at any time. It is also

convenient and provides instant connectivity.

3. Ubiquity-information can be accessed easily and in a

real-time environment.

4. Convenience-as the devices facilitates storage of data

and has Internet, intranet, extranet connections so it is

convenient.

5. Localization of products and services-knowing where

the user is located at any given time.

6. Very personal-Device owner has an exclusive access to

the contents/services and the service providers keeps the

identity of the owner.

7. Varied users-Elementary school students, grandpas,

grandmas are the varied users that uses m-commerce

and from varied location.

8. Ambidextrous -Work & Play: Business purpose +

Personal fun.

9. Willingness-People seem willing to pay for mobile

services

5. DEMERITS 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(s)

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. Consumers fear for their privacy.

7. Easier for information to get stolen.

8. It has taken a while for businesses/consumers to accept

m-commerce

9. It prevents face-to-face customer service. (less personal)

10. Not all cell phones are capable of m-commerce yet.

(new technology)

11. User interface is often difficult to learn how to use

12. Limited bandwidth

13. Cost of establishing mobile and wireless broadband

infrastructure

6. FUTURE OF M-COMMERCE IN INDIA

The mobile service charges are at an all time low in India

compared to the world, enabling even the low-income

groups to own and operate mobile phone. Pro-active rather

than reactive public policy and regulatory initiatives are

needed in India to fully utilize the opportunities offered by

mobile technologies and facilitate an exponential growth of

this sector. Mobile Commerce is the activity of commencing

commercial transactions between both B2C and B2B entities

via mobile devices. Indian retail market has experienced

high growth over the last decade with a gradual shift towards

modern retailing formats. With growing numbers of mobile

devices and mammoth wireless subscriber base, the focus is

slowly shifting to mobile platforms. Leveraging on enhanced

reach like MVAS and diverse features like of e-commerce,

m-commerce is poised for greater adoption across India, in

the coming years. Although mobile commerce market in

International Journal of Technical Research(IJTR)

Vol 1, Issue 2, Nov-Dec 2012

ISSN 2278-5787 Page 34

India is in nascent stage, m-payment and m-banking

segments have shown significant growth over the last few

years. Initiative taken by the government and financial

organizations to reach India’s un-banked population can

ensure tremendous growth in the latter segments. There are

around 600,000 territories that require banking facilities but

only around 89,000 bank branches are there in the country.

As a vast segment of the Indian population who neither had

a landline nor a bank account today have made a generation

leap and not only do they own a mobile handset, but are also

slowly attempting to transact on their mobile phone. With

this reality, the estimated market size of the m- commerce in

the country is pegged to be around 400 crore. The total

potential revenue opportunity through mobile commerce can

reach 20 billion in 2015, according to the IAMAI 2011

survey and this is only the beginning. So, clearly mobile

commerce has rapidly emerged as a major growth area for

mobile operators. Kalyan Banga, manager, product

development, Net scribes India says, “Although mobile

commerce market in India is in nascent stage, m-payment

and m-banking segments have shown significant growth

over the last few years. Initiatives taken by the government

and financial organizations to reach India's unbanked

population can ensure tremendous growth in the latter

segments.”

M-commerce in India is primarily dependent on network

operators who can effectively enhance and advance the

usage of its services, which has resulted in collaboration and

partnership models in domains like banks and telecom

operators and technology provider. The market expansion in

this domain has to be nurtured, offering a wide scope in

increasing revenue for m-commerce players and telecom

operators. Although m-commerce market in India is still in

its initial phase, but with the growth of Smartphone’s,

tablets, and mobile devices, m-commerce has started to gain

importance in the digital marketplace. Mobile phone

penetration in India is more than 60% and is expected to be

over 90% by 2015.Over the last few years, services like m-

banking, m-trading, and m-shopping segments have shown

significant growth. A recent study shows that 45% of smart

phone owners and 53% of tablet owners plan to purchase

more products on their handheld devices in the future,

predicting a huge opportunity for the service in the country.

7. FUTURE CHALLENGES IN INDIA

The major challenges in implementing M-commerce in India

is that the players in the m-commerce field like mcheck,

obopay, paymate etc. need users to link one of their banking

instruments like the credit card, debit card, bank account to

their mobile phone with the help of software installed on

phone and the common man is not willing to share such

information on the phone as he still think that his

information can be hacked. No doubt it is a big leap in India

but from the security point, it is still at its development

stage. Service providers use WAP and SMS as the medium

for providing services like facilitating people to pay through

their mobile phones. But these services has not reached its

peak as the service providers are unable to link with the

banks also the common people do not agree in sharing their

credit/debit card information. Also GSM services can

provide a secure connection using personal identification

number (PIN),

TRAI(Telephone Regulatory Authority of India), guidelines

had made mandatory for every service provider to identify

customers and this policy is similar to that of opening an

account and getting a debit card in turn making telecom

companies bank rather than the other way round. If a person

starts using his phone as debit card for buying vegetables

and other stuffs the daily banking transaction will

significantly be reduced.

According to the TRAI guidelines the telecom

companies have to pay 6% of annual gross revenue as

license fees to register as Value Added Service providers,

Bank is charging 2-4% from the them and the merchants are

not ready to pay them 7-8% for the services they provide. In

compliance to TRAI norms RBI norms are much simpler in

handling fraud transactions and banking. The solution of this

problem is that to build a MVAS(mobile value added

services), application that can be charged to from the user

account for providing the service. The 2.1.3(iv), TRAI riles

clearly states that the RBI guidelines need to be followed by

the telecom companies.

8. INDUSTRIES AFFECTED BY M-COMMERCE

As content delivery over wireless devices becomes faster,

more secure, and scalable, there is wide speculation that m-

commerce will surpass wire line e-commerce as the method

of choice for digital commerce transactions. The industries

affected by m-commerce include:

Financial services, which includes mobile banking

(when customers use their handheld devices to

access their accounts and pay their bills) as well as

brokerage services, in which stock quotes can be

displayed and trading conducted from the same

handheld device

Telecommunications, in which service changes, bill

payment and account reviews can all be conducted

from the same handheld device

Service/retail, as consumers are given the ability to

place and pay for orders on-the-fly

Information services, which include the delivery of

financial news, sports figures and traffic updates to

a single mobile device

9. CONCLUSION

International Journal of Technical Research(IJTR)

Vol 1, Issue 2, Nov-Dec 2012

ISSN 2278-5787 Page 35

In few years from now the mobile commerce will become

more secured as the cell phone companies are spending more

to protect their customers and also their information from

intrusions and hacking. Mobile commerce has gain a huge

popularity but still it is in its initial phase and can be further

expand to different fields and also can play a huge role in

effecting human life. Its future seems to be extremely safe

and bright and its upgraded version will emerge as the leader

in the 4G technological version. So we can conclude with

this that the future is here and we need to accept it with both

hands. Remember, any M-Commerce strategy should be an

integrated part of a larger strategy. Customers have an

expectation of a consistent experience regardless of which

entry point they access your products and services through,

be it online, the phone, or a physical store. As a business

owner your approach to M-Commerce should be to test

frequently and often, learn quickly, and scale appropriately.

Though M-Commerce is a relatively new space, being

proactive by exploring and learning now will help in

growing your business effectively and afford you the

opportunity to stay one step ahead of your competitors. With

the explosion of smart phones, 3G services and the adoption

of unlimited data service plans, business owners now have

the opportunity to easily connect with their customers in real

time whenever and wherever they might be.

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disadvantages_of_mobile_commerce. 3. M-commerce: The Next Big Hope!

http://voicendata.ciol.com/content/top_stories/112050906.asp.

4. Mobile Commerce in India: BuzzCity's Report http://www.imediaconnection.in/article/806/Research/mobile-

commerce-in-india-buzzcitys-report.html.

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