Mobile Commerce Part

8/8/2019 Mobile Commerce Part

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PROJECT ON

BY

Aarti Srinivasan 001

Aditya Devireddy 011

Gunjan Bhutani 021

Martin Antony 031

Gauraav Singh Pardhi 041

Priyadarsh Sharma 051

K.J Somaiya Institute of Management Studies and Research

Vidya Vihar , Mumbai 400 077



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Table of Contents

1. Introduction ........................................................................................................................ 3

2. Mobile – Changing the people lives ................................................................................... 4

3. Mobile Phones- Revolutionary Devices ............................................................................. 5

4. M-Commerce Technologies ............................................................................................... 6

M-commerce: 3G phone technology focused .................................................................... 7

5. Mobile Commerce -Size of Market and Key players ......................................................... 8

6. M-Commerce in India ...................................................................................................... 10 Value added services market ............................................................................................ 10

Keyplayers ........................................................................................................................ 12

7. Business Applications ........................................................................................................ 13

Business-to-Consumer Applications ................................................................................. 13

Business-to-Business Applications ................................................................................... 14

8. Factors aiding the growth of M-Commerce ..................................................................... 15

9. Challenges in M-Commerce ............................................................................................. 16

10. Steps to make m-commerce the success story .................................................................. 18

Standardisation ................................................................................................................. 18

Consumer Experience ...................................................................................................... 18

11. Conclusion ........................................................................................................................ 19

12. References ........................................................................................................................ 20



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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

"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."

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.

Today’s communications market is moving quickly toward the promise of communications,

commerce, and content available anytime, anywhere, and on any device. Service provider’sare no longer simply network operators, but are evolving to become providers of rich,

interactive media, productivity services, and retail experiences. Consumer expectations have

also evolved to where the term wireless no longer implies just voice service, but rather

represents a complex infrastructure to which one connects—in real time, from any place—to

be informed, entertained, or engaged in visual or audio communication, or to buy goods and

services. The constant exchange of value among the multitude of constituents is the pulse of

this infrastructure, the underlying and measurable component of which is wireless commerce.



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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 isan 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 emailfor 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:

• first-generation or analogue phones - good for voice calls

• second-generation phones - use digital technology and are typical of the average

phone in use today

• 2.5G digital phones - support the transmission of data using general packet radio

service (GPRS)

• third generation (3G) digital phones - support voice and data transmission at greatly

increased speeds

3G supports services that were not possible with earlier technologies:

• video calls can be made and received from other 3G users

• video and other types of media can be downloaded to play on your phone

• 3G phones often have cameras, so you can take and transmit digital pictures

• location-based services can be accessed in order to see a map of where you are, or

find out the nearest garage, restaurant, bank, etc



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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 internetcontent.

WAP-enabled devices run microbrowsers. These are applications that suit the:

• small screen and small memory size of handheld devices

• Low bandwidths that are a feature of wireless networks for handheld devices.

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.

With an MMS-enabled phone , one can:

• take digital photographs and store photographs on the internet

• send and receive full colour pictures

• add a text message to your picture

• send and receive voice clips

• purchase pictures and sounds from the internet

• have enhanced polyphonic ringtones

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 isshown 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 criticalinfrastructure 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.

Value added services market



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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 theguidelines 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.

• Advertising & Promotion

Key concept: advertising and promotional information is sent direct to mobile phones

• Store Location

Key concept: a map is displayed on a mobile phone showing where consumers can

buy a product

• In-store navigation

Key concept: consumers find products more easily when in a shop

• Comparison Shopping

Key concept: consumers use their mobile phone to access information about product

characteristics and price for related products

• Information & Extended Packaging

Key concept: consumers access additional information about products through their

mobile phone

• Payment

Key concept: mobile phones are able to make payment anywhere, anytime.

• Ticketing

Key concept: mobile phones are used to distribute and redeem tickets

• Coupons

Key concept: mobile phones used both to capture and redeem coupons and discounts

• Recall

Key concept: mobile phones are used to access information about product recall easily

• Interactive TV

Key concept: TV viewers can interact with what’s happening on screen using their

mobile phone



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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

• With increased focus on communication networks, better than average growth

observed in the underlying infrastructure for m-commerce i.e. Mobile infrastructure.

In India itself it is expected to touch 500 million by 2010.• Widespread availability of device, which in this case is Mobile handset.

• The decline in prices of the handset and m-commerce solutions.

• The mobile phone, unlike a PC, is not required to have a live electrical connection to

function. Thus it can open areas with even irregular power supply.

• The increasing improvement in bandwidth availability due to shift from 2-G to 3-G

mobile telephony. It will improve the experience altogether.

• A mobile phone being personal device is constantly with the consumer. This increases

the opportunity to transact. With a mobile phone, the issues of physical presence at

an outlet, access to the Internet, amongst others are eliminated, giving the consumer

the opportunity to transact anytime, anywhere.

• Consumers are already comfortable using the mobile phone for services other than

voice. Thus they won’t show resistance towards m-commerce applications.

• The nature and appeal of the content offered by the m-commerce and the segment that

buys this content is already tech-savvy. Meaning it will be fully embraced.

• Vendor’s push, by way of providing opportunities of the m-commerce.

• Readiness of consumers to pay for the convenience.

• A critical mass of people who are ready to embrace m-commerce.

• The implosion in e-commerce usage per se, which makes them natural consumers for

m-commerce.

• Another reason fuelling the growth of m-commerce is the organised retail sector,

which would like to exploit the market opportunities given by 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

Security of data transmissions and commerce being conducted by wireless devices is

a great concern for businesses and individuals today. The wired Internet is vulnerable

to interception or compromise by unauthorized users' attacks, because wireless

LAN/WAN networks use a publicly available spectrum. Individuals have been wary

of using Internet commerce for fear of having their credit card used improperly. A

prerequisite for the success of m-commerce applications is the legal recognition and

no disputability of any transactions effected.

• 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 thewrong 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 bothtelecommunications 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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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 androbust 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 referredto 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

1. A Mobile Commerce white paper published by GS1,(2008)

2. Why M-Commerce is Struggling by Sarah Perez, (2009)

3. Mobile Commerce, Wikipedia.

4. Mobile Commerce survey, AC Nielsen,(2009)

5. M-Commerce , Wise Geek,(2009)

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

Mobile Commerce Part

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Transcript of Mobile Commerce Part