Potential of m-Commerce in Indian Market

A lot has been written in recent times about the promise and potential of the e-commerce industry in India. The raise in the mobile broadband with the introduction of low cost smart phones at will act as a overall Internet penetration in India.

Today I was reading an article about the potential of m-Commerce, here is a brief.....

Of the next 300 million Internet users to be added, more than 200 million are expected to be mobile Internet users. This phenomenon will be aided by the growing popularity and affordability of smartphones - the lowest priced smartphone is available today at Rs 3,000.

Though mobile Internet has picked up pace across countries, mobile commerce (m-commerce) has not yet seen the same level of traction. Having said that, there are markets such as Japan where 20% of online commerce is transacted through the mobile phone.

More significantly, China has an m-commerce level of 12%, which has been attributed to the high percentage of mobile-only Internet users there (estimated at over 30%). The number of mobile only Internet users is expected to be over 50% in India by 2015, which, in my view, will make India a very different market.

About 15-20% of overall e-commerce in 2015 happening through the mobile phone is a distinct possibility. While size of display may be a constraining factor for people purchasing on the mobile phone, the medium, especially given its ubiquity, comes with several advantages over traditional e-commerce channels, some of which include:

Anytime, anywhere shopping

Whether it is utilising downtime over a long commute or the ability to add something to your digital shopping cart as and when you think of it, m-commerce offers consumers significant convenience over traditional ecommerce.

Tesco, UK's leading retailer, offers its customers a mobile app through which they can place orders and opt for home delivery if they wish. To add to the convenience, customers can use the app to scan the barcode of a product, when it gets over, to add it directly to their shopping cart.

Location-based services

Another promise of m-commerce for retailers is the ability to engage with their clients based on their location. They can broadcast deals (discounts at restaurants, ongoing sales at retail stores, etc) available in the consumers' vicinity.

They can also offer flexible delivery options to consumers based on their location. Consumers of ASOS, UK's leading online apparel retailer, are informed about the time (in hours) it would take ASOS to deliver to their current location when they shop through their mobile app.

Enhanced in-store shopping

Mobile commerce offers retailers the unprecedented ability to engage and interact with the shopper in the store to influence behaviour, improve the shopping experience and boost spending.

Through the mobile phone of the customer, retailers have the ability to know when you enter the store - you open their app; your purchase history and brand preferences - tied to their loyalty programme; what's in your cart - using mobile scan-and-bag technology; and how you want to pay - using a mobile wallet, mobile payment or NFC technology.

M-commerce in India has already begun to gain traction. India's leading m-commerce player, http://www.ngpay.com/ , has over 1.5 million registered users, who purchase products through their mobile phones. Their mobile mall, as they refer to it, has a daily footfall of 40,000-50,000 unique users, with about 15% of those making purchases with an average transaction size of about Rs 700.

According to an eBay study, Mobile Assisted Commerce (MAC) is set to come to the mainstream in India in 2012. With reductions in smartphone prices and increased 3G penetration, m-commerce is set to increase.

The idea is at a very nascent stage and things are moving slow, but in the right direction. eBay Inc clocked in revenues of 5 billion dollars globally from m-commerce in 2011 and expects to hit the 8 billion dollars mark in 2012. eBay India has seen tremendous demand of m-commerce in India. Indians being bargain hunters uses MAC for price comparison and then do the actual purchase.

A study by digital news website, Mashable, says that 47% of smartphone owners and 56% of tablet owners plan to purchase more products on their respective devices in the future. The market is virgin and with the betterment of e-commerce in general and mobile payment gateways in particular, change in perspective is expected.

Leveraging m-commerce as a channel will become imperative for any retailer aspiring to engage with consumers through the digital medium.