A parallel that I can draw from the US mcommerce market

No doubt, there is a huge potential for mCommerce for two key reasons. First, electronic transaction markets or e-payment markets are expected to grow at 70% over the next 2 years. Second, there are a lot of basic services such as bill payments for water, power, telephone and other services that are still not conveniently accessible in India. Without any hassles, most of the transactions that are taking place through e-commerce today can be implemented through mCommerce. However, there is still a lot of skepticism in the industry as far as ubiquity of retail transactions via mCommerce is concerned.

My skepticism on the mobile commerce hype is borne out of the following facts.

1. A comparison with USA mobile internet usage.


The following charts depict the

a. USA mobile internet user profile.
b. How often an average American uses the internet over the mobile phone?
c. Mobile commerce scenario in USA.

The US mobile Internet audience (over the age of 13) is about evenly split between those over the age of 35 (48 percent) and those under the age of 35 (52 percent). Additionally, there are approximately as many teenagers using the mobile Internet as there are persons over the age of 55(5.1 million persons age 13–17 and 4.4 million persons 55 and older).

Though it would be unfair to compare the mCommerce scenario in USA and India, we can definitely highlight a few noteworthy points here. The observations are based on the scenarios which exist at this point.

1. In a country such as USA, where technology adoption is much better, (than India) the mobile commerce usage - as far as purchase of retail products is concerned - is not encouraging. In the last histogram, it has been clearly depicted that only 9% of mobile commerce has been actual purchase of products and services. Out of this 9% product purchase we don’t know what percentage is actual product purchase from electronic retailers (Discounting the ticket purchase). We can safely assume that the figure would not be more than 4%.

In fact, a pedagogical deduction can be achieved taking USA as a benchmark. After so many years of the advent of mobile commerce, if in a country like USA – where people just lap up any new technological innovations – where retail product purchase over mobile is so abysmal, in a developing country like India it would definitely take some time (or a considerable number of years)before it becomes a force to reckon with.

2. Many retail goods are high involved purchase. Especially in an Indian context, many retail goods are high involved purchase. Goods such as books, music CDs and non-perishable grocery products are not high involved purchase, whereas apparels, perishable groceries, jewelries, automobiles and electronic items are. In India, mCommerce could be a successful proposition for all the low involved purchases.

3. Smartphone prices still expensive in India. In USA, the iPhone has increased mobile internet consumption by a factor of 13 times. In India, though data plans are available for many types of handsets, but a comfortable and enjoyable internet access over the mobile could only be through an IPhone, BlackBerry or some Nokia handsets. Unfortunately these handsets are still expensive in India and beyond the reach of a common man.

The government is aiding the growth by m-commerce in terms of releasing guidelines on mobile banking transactions. However, the adoption of m-commerce (especially retail product purchase) is abysmally low in India and the deterrent is the consumer purchase behaviour. By weeding out skepticisms and by educating the customers on the potential benefits, we can ensure mobile commerce to be a runaway hit.

To be successful in India

1. Separate thought process and design is warranted for m-commerce user interface. Seamless translation of the website to mobile would not have the same impact. A well designed and usable interface is critical. For example, properly designed mobile GUI would ensure that users can find information that they are looking for, perform transactions, spend time at the site, and return again.

2. Incorporate mobile persuasive tactics (the study of captology) to hook the customers, increase sales and signups and also increase traffic. ( Would pen down my thoughts on captology later)

Just a note here - Content delivery on mobile is going to go through the roof in years to come. Whether consumers would pay for those content - that's something we need to fathom; I personally believe people would. I would write a separate piece on the same.