Impact Of Mcommerce On Overall Indian

Published Date: 02 Nov 2017

Abstract:

Mobile commerce of M-Commerce refers to the ability to conduct the commercial transactions using mobile devices. M-Commerce is being used by various industries in India and abroad such as retail industry, financial services, travel services, emergency services, telecom services etc. There are a number of advantages customers as well as the retailers can get with the M-Commerce. The customers can purchase the products or services whenever they want and the retailers use M-Commerce as a great way to promote their products and services. There are some disadvantages of M-Commerce too that will be analyzed in this paper.

Introduction:

Mobile Commerce or M-Commerce is the ability to conduct the commercial activities using a mobile device (Jaimes, 2013). M-commerce represent a substantial part of the e-commerce even if there is still a lever operated by sub-distributors. The sales of mobile devices will continue to rise from 2 billion in 2012 to almost 5 billion in value in 2015, representing just over 7% of e-commerce, according to a study published by Xerfi-Precepta. The study is relative, however, revealing that the majority of purchases made really would not fall as m-commerce made so sedentary. By cutting the purchases of substitutions, m-commerce will surely generate 1 billion euros in sales in 2012, according Xerfi-Precepta (Jaimes, 2013). There is still untapped potential for retailers when the consumer is still moving and has not used his phone for shopping before. The more important fact is that e-commerce may gradually lose momentum, reaching its full potential in 2018. The average online shopper basket should stabilize between 2013 and 2015 to 87.5 Euros (Jaimes, 2013). If more and more retailers are launching their mobile application or website, the study notes that "the functionality of preparing purchase orders and payment are proposed as half of the signs." Mobile sales are up by 58% in 2013 in the United States. 72 million m-shoppers spend 37.44 billion dollars in 2013 in the United States on their Smartphones and tablets, according to eMarketer. The mobile is not just to make a purchase decision and is conclusive on another channel. Travel and ticketing aside, American consumers spend 37.44 billion U.S. dollars via their Smartphones and tablets in 2013 against 23.72 billion in 2012, or 58% more, according to eMarketer (Jaimes, 2013). The number of consumers making purchases on the mobile channel reached 72 million people in the United States this year and will grow by 65% to reach $ 119 million in 2016. More broadly, the number of mobile users using Smartphones or tablets during the buying process will rise in 2013 to 118 million consumers, who represent 62% of shoppers. This proportion will reach 85% in 2016 (Jaimes, 2013).

M-Commerce in India:

65% of the population of India are below the average age of 26. Online shopping and availing internet based services are common with people of this age group as young people are more net savvy. Also, though just 10% of the Indian population have personal internet connectivity (as per the WorldPay Global Online Shopper report), according to the GSMA, the number of 3G connections in India will be greater than 100 million within 2014 (Singh, 2012). Also, the GSMA has predicted that India will be the second biggest market for mobile internet within 2016 (Singh, 2012). M-Commerce has a bright future in India and people are adapting to this at a very fast pace. More and more people are using mobile phones for shopping and using different online applications instead of using computers. The fact that new high end mobiles and high speed mobile internet connections are available easily today has enhanced the popularity of m commerce in India.

Fig 1: Mobile subscribers in India.

Source: Singh, S.K. (27th August, 2012). Future of mCommerce Services In India. India: InsightVAS.

The above figure shows the graphical representation of trends in mobile subscription in India over the years. It can be seen clearly that in between March 2003 and August 2008, the number of mobile subscribers in India has increased in a huge way. The trends suggest a future projection that shows that by March 2013, the number of mobile subscribers in India will be 638 million. This is a huge consumer base for retail companies, financial institutions and telecommunication companies.

The number of people using mobile phones in India is greater than the worldwide average numbers (Singh, 2012). Thus, retailers can use this medium to reach out to a massive consumer base. According to WorldPay's Global Online Shopper report, 72% of the Indian respondents own smartphones (Singh, 2012). Also, 40% of them have used their phones to buy something online or avail some service. This is two times the worldwide average of 19%. The number of people using their phones to shop online is increasing day by day. 54% of the respondents stated that they had plans to buy something or the other through smartphones within the next 1 year. They also stated that they had already equipped their smartphones with an average of 5.5 shopping applications per person (Singh, 2012). The digital products like mp3s, games, etc. are highly in demand as people get to download content almost instantly. The Indian consumers are evolving and are adopting m-commerce very fast. With this new kind of consumer base readily available, the retailers and other businesses should tweak their web based operations. According to WorldPay's Global Online Shopper report, 49% of consumers in India have preference for shopping from a mobile commerce enabled portal. It also reported that 37% of the consumers had the preference for shopping using a mobile application (Singh, 2012).

India has taken the example of the success of Kenya’s M-PESA which introduced countless people to mobile banking (Happach, 2012). The financial institution RBI and the service provider TRAI have teamed up to provide m-Commerce in the villages of India. SBI and ICICI bank have collaborated with a mobile company, "EKO" to provide mobile banking options (Happach, 2012). Most other Indian banks are following their footsteps and introducing a wide variety of mobile banking facilities. A report by Boston Consulting Group (BCG) highlighted that, presently, there are more than 800 million mobile users in India. Of these, 240 million people have bank accounts, and 20 million use credit cards. Also, India has 88,000 branches of different banks and 70,000 cash points. However, almost half of the Indian population does not have bank accounts (Zahaf, 2010). Of these people, 42% own mobile phones (Happach, 2012). This scenario is perfect for the development of m-Commerce and banks and mobile companies can create excellent platforms for mobile shopping. According to the BCG report, the mobile commerce revenues from the Indian market can be higher than even $4.5 billion within 2015. Thus, m-Commerce surely has a bright future in India (Happach, 2012).

Spread and use of M-Commerce in various industries:

Mobile commerce has taken the retail industry by storm. The reasons behind the success of M-commerce are comfort of shopping on the go, simplicity in using the applications, speed of transactions etc. There are a number of business segments get benefits by mobile commerce.

Retail Industry:

Most of the retail businesses get benefits by setting up the M-Commerce stores. The customers can browse the M-Commerce websites whenever they want and choose the items they want to buy (Mehra, 2011). The customers can place the orders easily and make the payment using credit or debit cards through the online secure transaction process. The retail industry in India has experienced a growth of 23.7% due to introduction of M-Commerce and the 51% customers feel comfortable making purchases from their mobile devices. The advantage of using Mobile commerce in retail industry is that customers can easily purchase everything conveniently wherever they want. The disadvantage of using mobile commerce in retail industry is the payment issues. Sometimes the payment is unsuccessfully completed in mobile commerce transactions.

Financial Services:

Customers can pay the monthly installments of their loans through M-Commerce whenever they want. Customers can also pay their utility bills such as electricity and telephone bills through the M-Commerce (Mehra, 2011). The financial services have seen a growth of 15.4% in India in 2012 compared to the previous years due to introduction of m-commerce. Almost 19% of total mobile users pay at least one of their utility bills through mobile commerce (Turban, Lee, King, Warkentin, & Chung, 2002). It saves time as people need to stand in queues for long time to pay their bills manually. The disadvantage of using m-commerce for paying the bills is that the transactions are not done instantly. It takes some time to get the money deposited to the receivers’ account. Almost all the banks such as Axis Bank, ICICI Bank and other private financial services provide m-commerce app to pay the bills in India today. Various government organizations have also introduced the mobile commerce apps to help people pay their bills conveniently.

Travel Services:

Booking railways, flight and bus tickets through mobile have become quite common now a day. With such a mobile commerce services, the travel agencies can reach greater number of customers. Almost all the travel agents in India have their own mobile app which is designed for booking flight tickets or hotels. Customers can easily book their flight tickets in these apps whenever they want. They can pay through the several payment options available. The Indian railways have also developed their mobile commerce app to help the passengers book their tickets through mobile phones. In the year 2012, it has been seen that almost 11.2% of the total passengers travelling in flights have booked their tickets through mobile phones (Telecom regulatory authority of India, 2010). The disadvantage of booking tickets through mobile is that the chances of failed transactions are huge due to poor network connectivity in mobile connections in India.

Public utilities and emergency services:

The emergency services such as emergency medical services, fire services can reach people quickly by receiving requests from people through the mobile applications (Mehra, 2011). They can save huge number of lives in emergency situations by providing their services. Different government organizations as well as non-government organizations have developed their mobile commerce applications or they have enrolled them in other mobile applications to help people during emergency. In cities like Delhi, Bangalore, Mumbai etc. people can seek help from ambulance services or fire services through m-commerce.

Telecom services:

Customers can now pay their mobile bills quickly through their mobile phones without standing in queues for hours. They can also choose the value added services they want through the M-Commerce websites. Almost all the telephone operators such as Airtel, Vodafone, and Reliance etc have their own mobile commerce applications and it can be used for paying the bills or purchasing any value added services etc. Today, more than 30% users like to pay their mobile bills through their mobile phones as it saves time and the process is quite convenient too (Stafford & Gillenson, 2003). Government organizations such as BSNL also provide mobile commerce app to their users to pay the bills and to keep track of their accounts.

Entertainment industry:

M-Commerce is widely used in entertainment industry. People can book the movie tickets, party entry tickets etc through the mobile apps available today. It saves time and the industry can also reach a greatest number of viewers in shortest possible time. Some of the popular companies providing online movie ticket booking such as Bookmyshow, TicketNew etc have developed their own mobile commerce platform where customers can buy movie tickets on the go whenever they want (Siau & Shen, 2003). The only disadvantage of the process is that the customers need to collect the ticket from the counter before the show starts and sometimes the customers need to pay some extra charges for availing the services.

Advantages of M-Commerce to industries:

Any business can make highest possible sales through the wider connection the business can make to their target markets. So, all the industries can maximize benefits from the current technology. Mobile commerce is the latest addition in the current business scenario. Mobile commerce can be simply referred as the business transactions that are made through mobile devices (Mehra, 2011). There are plenty of M-Commerce applications used by the industries today and with these mobile commerce applications, businesses as well as consumers are benefitted from several ways. Apps used for baking, location mapping, mobile shopping, mobile file sharing are on higher demand.

The analyze applicability of mobile commerce through three ‘P’s, products, payment, promotion.

Products:

All the products cannot fit for mobile platforms. Most of the mobile commerce applications are based on the convenience or impulse. High prices items are not usually sold through mobile commerce because customers require more research on these items and a huge a number of people are concerned about the security involved in mobile transactions (Tiwari, Buse, Herstatt, 2006). These items include machinery, equipments, jewelry etc. Even though these products do not fit in the mobile platform, the customers can still their mobile devices to research.

Promotions:

One of the important benefits of mobile commerce is to send real time promotions. It has been extended to offer-location based promotions. The brick-and-mortar presence of businesses can push the promotions to customers when they are in your store or near to your store (Tiwari, Buse, Herstatt, 2006). In case of online businesses, the promotions of the products can be done based on where the consumers are shopping. The famous mobile commerce website Amazon.com has an iPhone application which search the bar code of any product to check out whether there is any Amazon offer available on that product (Tiwari, Buse, Herstatt, 2006). There are many businesses that offer instant discounts immediately after scanning the bar code. The businesses are able to attract huge number of customers through this.

Payment:

Ease of payment is another major benefit of Mobile Commerce. The businesses do not need to involve them in the payment process. There are various payment gateways available through which all the transactions in M-Commerce are done. The businesses can save money and time both with the help of such payment gateways (Tiwari, Buse, Herstatt, 2006). The businesses can avoid the PCI compliances and cut the data entry on the keyboards for billing (Tiwari, Buse, Herstatt, 2006).

Various businesses build their mobile presence today to generate more revenue and it also increases the site traffic that eventually leads to more revenue. Mobify and Wapple are two popular companies that help businesses to make their mobile presence by developing various mobile commerce applications (Tiwari, Buse, Herstatt, 2006).

Disadvantages of M-Commerce to the industries:

There are a number of disadvantages that are faced by the companies as well as the users of M-Commerce.

Speed of delivery:

Mobile phones are quite slow in terms of speed compared to computers. So, the mobile commerce applications and websites are needed to be optimized to ensure customer satisfaction but, the companies, using m-commerce, need to remove a number of images that might be vital from the apps or websites (Upkar, 2002). Apart from that the companies cannot include some attractive flash, scripts or plug ins in their m-commerce websites or apps.

Small size screen:

The average size of mobile phones is 2 to 3 inches. It means that the businesses need to reduce the information available on the mobile app (Upkar, 2002). The businesses also need to reduce the steps for checking out and ensure the maximum amount of text and background contrast.

Security:

Security is the major concern for mobile commerce. Mobile phones and other mobile devices are more likely to be stone compared to computers and laptops. So, it is quite important for the companies to ensure that the securities of the customers are not compromised in such cases. Often the customers face trouble while losing their mobile phones (Varshney, 2004). The companies need to ensure that the data encryption and protecting wireless connection from unauthorized access such as hackers and viruses are properly done.

Future of m-commerce:

The future scope of m-commerce is very bright in India due to the increasing number of mobile connections and mobile shopping options. Also, the banks are tying up with telecommunication service providers to offer a huge variety of mobile commerce facilities. More and more people are getting initiated into the world of m-commerce every day. Today, consumers in India can use their mobile phones to pay different kinds of bills. (Buse, 2007) The network providers have introduced different kinds of applications which can be used for paying bills like phone bills, internet usage bills, etc. (Singh, 2012). The government is also trying to ride the m-commerce wave and has introduced mobile payment options for electricity, water, gas, etc. This is in the developing stage right now, but, very soon, consumers will be able to pay all their utilities bills through their mobile phones (Jordan, 2008). This will be highly convenient and will save a lot of time. Transferring money is another aspect of m-commerce that is gaining huge popularity in India. Almost all banks have come up with mobile banking options that enable people to stay connected with their bank accounts through their mobiles. Specific apps have been created for this. While people can check balance and account details via sms as well, applications need to be downloaded and installed for money transfers. Mobile transactions are sure to increase in the upcoming years as the applications are becoming more secure and fast (Singh, 2012).

The most common usage of m-commerce is retail payments. People can use their mobile phones to pay at different malls and shopping centers. This is a fairly new concept and Indians are used to paying through cash or card. But, in future this payment option has huge potential as it is extremely safe. Also, mobile commerce can be used for online shopping too. Almost all the popular Indian retail sites like Flipkart.com, etc. offer mobile payment options. Buying movie tickets through mobile applications has become extremely common in India today. Bookmshow.com, Ticketnew.com, etc. offer such applications based on mobile commerce that enable people to book movie tickets through their phones (Vaidya, 2011). While mobile ticket booking is common for multiplexes, the single screen theaters are still warming up to the concept. But, this concept is all set to become more popular in future and a time will come when people will stop queueing up at the box office and will buy movie tickets only through their phones (Singh, 2012).

Conclusion:

Mobile commerce is the newest invention in the market today. People are quite familiar with the online shopping today but the mobile commerce is the impact of m-commerce on the overall business scenario cannot be ignored. Millions of people in India are using m-commerce. 29% of the total mobile users purchase products or services through their mobile phones. Almost all the industries in India today use mobile commerce such as retail industry, financial services, travel services, entertainment industry etc. Businesses are using Mobile commerce due to a number of reasons. The first reason is promotion. All the businesses are using M-commerce as this is a great platform to promote their products. Many businesses offer discounts on mobile commerce transactions as a promotional activity. The businesses are benefitted by the m-commerce in terms of payments too. They do not need to involve them in the payment process as it is done by the payment gateways. There are some disadvantages too of the mobile commerce such as small size of the screen of mobile phones, security issues etc but the Indian mobile connection providers are doing best for to overcome the issues. The future of M-Commerce is also expected to be good in India as the government has taken a lot of initiatives to enhance the quality of m-commerce in India. A number of companies in India are providing m-commerce services everyday and the number of users of m-commerce is expected to rise in future.