Mobile Commerce

(Course: Digital Marketing & e-Commerce)

Dr. K.B.C. Saxena

Fortune Institute of International Business

New Delhi
July 2, 2015

Developments in Mobile Technology

1st Generation (1G): First analog cellular system commercially
introduced in USA in 1978.
2nd Generation (2G): This generation replaced the analog
signal with digital signal. Two major developments took place:
GSM and CDMA technologies.
3rd Generation (3G): This technology developed with the
concept of packet switching instead of circuit switching for
data transmission.
4th Generation (4G): Introduced technology advancement like
WiMAX and Long Term Evolution (LTE) in 2009.

Mobile Commerce

Mobile Commerce (m-commerce)

The buying and selling of goods, services and
information without any location restriction by
mobile devices between all the 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 such as mobile banking, payment
information, and marketing services.
Mobile Commerce

Differences between m-Commerce & eCommerce

The m-Commerce and e-Commerce business environments
and activities have a lot in common, as they have much of the
same functionality in terms of facilitating business
transactions.
But some differences exist in:
The mode of communication (wired LAN versus wireless)
The types of Internet access devices (laptops versus cell phones, PDAs)
The development languages and communication protocols (HTML
versus WML/cHTML)
The enabling technologies used to support each environment (cookies,
JAVA, Active Server Pages, etc. not available in m-Commerce)

Mobile Commerce

M-Commerce vs 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
and logistics etc.

Mobile Commerce

Characteristics of Mobile Environment

1.
2.
3.
4.
5.
6.
7.

Ubiquity of services
Accessibility of services
Reachability
Context-awareness
Identifiability
Localization
Personalization

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Ubiquity of Mobile Services

Mobile services are available wherever the user feels
the need.
Anonymity. It also allows use of service at locations
where no one can observe the customer.

Mobile Commerce

Accessibility of Mobile Services

Mobile services are available at any time and
immediately.
Users can use them in niche time, and have shorter
usage pattern compared to on-line PC users.
Typical on-line PC use is 30 minutes or more per
session, whereas mobile users sessions average less
than two minutes.

Mobile Commerce

Reachability of Mobile Services

Mobile services allow connection with a user, with
his permission, anywhere and anytime.
This allows immediate interaction in common
applications and furthermore enhances the
possibility to contact all partners for multi-partner
transactions.
From a service-provider point of view, it enables the
transmission of time-critical information (e.g. betting
information, flight departure time change, etc.) to
interested persons.
Mobile Commerce

Context-awareness
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.

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Identifiability
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).

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Localization
Mobile services can be customized to the users
location (mobile).
This allows better targeted information and
transaction-based services (e.g. weather at the local
place, market price at the local place).

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Personalization
Mobile devices allow user interface to be customized
to one specific person.
Personalized services create strong customer
relationships; thus encouraging transactions while
preventing users from switching to different serviceproviders.

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M-Commerce Value Network

Customers

Service
Providers

Content
Providers

Mobile Commerce

Network
Operators

Technology
Vendors

Application
Developers

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M-Commerce Service Technologies

Short Message Service (SMS): Simplest and most useful
means of mobile communication.

Wireless Application Protocol (WAP): A

communication standard that enables portable electronic
devices to receive and interpret data. Help enabling access to
Internet from a mobile device. As there are more mobile users
than Internet users, it has made information delivery quicker,
convenient to users and businesses and available to more
people.

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Types of m-Commerce
Mobile shopping
Mobile retailing
Mobile ticketing

Mobile entertainment
Mobile gaming
Mobile music
Mobile video

Mobile financial services

Mobile banking

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Mobile Shopping
Mobile extends users ability to make transactions across time
and location and creates new transaction opportunities.
Requires special mobile user interface because of the small
size of the screen.

Mobile Retailing: This might be even more appealing

because there is no need to spend time to boot the Laptop!

Mobile Ticketing: 24x7 hours service availability. Value

proposition? Bookmyshow.com example.

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Online Shopping Experience

Personal & Environmental Factors
Demographic, personal, cultural,
sociological, economic, legal,
environmental, etc.

Marketing Stimuli

Web Experience

(Traditional Marketing
Mix)

Online Controllable
Marketing Factors

Buyers Decision Process

Search, Trust-building, Evaluation
of alternatives, Choices, Post
purchase behavior

Buyers Decision

Mobile Commerce

Product choice, Brand

choice, Dealer choice,
Purchase timing

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Barriers to Adopting m-Commerce

Security challenge

Limited display on mobile device

M-Commerce requires secure transaction environment
Difficult to browse on-line catalogue
Contains highly personalized and confidential information

Customer trust in m-Commerce

Mobile devices have limited computational power, memory and
battery life.
Wireless networks have limitations in bandwidth, connection stability,
and function predictability.
These networks have relatively high operation cost, lack a
standardized protocol, and data transmitted wirelessly is more
vulnerable to eavesdropping.
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Customer trust components in mCommerce

Mobile technology

Customer trust in
m-Commerce

Mobile vendor

Enhance customer familiarity (publicity, advt)

Build vendor reputation
Deliver high quality information
Elicit third-party recognition and certification
Provide attractive rewards (free trials, gift cards)

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Branchless Banking & Financial Inclusion

The poor do not have access to banking services
because of the high transaction costs, which is
because of the need of establishing a physical
infrastructure to deliver the service.
Branchless banking is a way of banking that has
eliminated the need of physical infrastructure and
employees, and replaced it with technology.

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Mobile Banking
Mobile banking is a form of branchless banking that
depends on the mobile phone and mobile networks
to deliver financial services. It utilizes the mobile
network channels to deliver financial services to the
ones who have no access to bank accounts
(unbanked).
It offers new opportunities for banks to provide
added convenience to their existing customers, as
well as reach a large population of unbanked
customers.
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Mobile Revolution in Emerging Markets

The 7 billion people in the world have 6 billion mobile phones
but only 2 billion bank accounts. Emerging markets are in a
unique situation with low penetration of bank accounts but
high adoption of mobile phones.
In Bangladesh, 57% of its 150 million inhabitants have a
mobile phone, but only 13% have a bank account.
India has a population of 1.2 billion with 900 million mobile
phones but only 250 million bank accounts.
Governments in developing countries see mobile technology
as a vehicle to achieve financial inclusion, especially among
the rural poor population.
For-profit businesses view this as an opportunity to grow and
reach new customers.
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Types of Mobile Banking Services

SMS Banking
Application or Software oriented
Browser (Internet) based model
Mobile Applications (developed for smartphones)

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Mobile Banking Models

Bank-led m-Banking Model: only customers of the
bank can avail the m-banking services from the bank.
Mobile Network Operator-led m-Banking Model: all
mobile customers, even those who do not have
access to a traditional bank account, can do banking
transactions through their Mobile Network Operator
(MNO).

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Bank MNO Partnership

Many banks are forging partnership with MNOs.
A bank MNO partnership could potentially benefit
both parties banks could reach a large and
untapped market at low cost, and MNOs could
improve retention rates of their customers, most of
whom are typically prepaid customers with very high
churn rate.

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Business Correspondents (BC)

To extend the reach of banks, Reserve Bank of India
has relaxed its regulations to allow banks to appoint
agents, called business correspondents (BC), who can
act on behalf of banks to provide financial services to
customers.
These agents could be individuals, NGOs or for-profit
start ups.

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Mobile Banking Services provided by

some Banks

State Bank of India: FreedoM, SMS Banking, USSD

Union Bank of India: SMS Banking, Umobile
PNB: SMS Banking
ICICI Bank: iMobile, SMS Banking, M-PESA, mRupee
HDFC: SMS Banking, App Based, Browser Based.
AXIS Bank: Phone Banking, Internet Banking on
Mobile, SMS Banking.

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Mobile Social Commerce (ms-Commerce)

Can there be mobile social commerce ?

Whats the need?

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