What’s ailing mobile commerce in India?

Telecom Lead Asia: Inadequate mobile broadband — 2G, 3G and 4G — and mobile payment ecosystem have affected India’s mobile commerce dreams.

This is despite India’s 800 million mobile population and flood of e commerce companies.

Ericsson in a blog post says India has recorded 3.34 million mobile banking transactions in June 2012 – counting for as much as Rs 3067 million. But this did not translate into the success of mobile commerce.

M-commerce can be a huge success for the Indian market but this requires a complete ecosystem, partners must be synchronized so that the best benefits go to consumers and their confidence is assured.

Strategy Analytics, which has done a study in the U.S., U.K., and China recently, says mobile connectivity is a challenge and opportunity for under pressure brick and mortar retailers.

The mobile industry has focused on technologies such as NFC for payments, rather than creating a successful value proposition for consumer and retailers.

Meanwhile, consumers in the U.S., U.K., and China are already using mobile technology in stores to find better deals elsewhere, locating competing retailers and comparing prices with online stores.

E-retailing firm HomeShop18 pegs mobile commerce to contribute more than 25 percent of the total traffic in e-commerce (online shopping) by 2015 in India.

“In the next three years mobile commerce will constitute more than 25 percent of the total traffic in e-retailing,” said HomeShop18 CEO and founder Sundeep Malhotra.

Currently 70 percent of people in India have feature phones, using them daily for primarily calling and SMS, but many of us don’t know how to use the technology for greater personal benefit. Mobile money will trigger mobile commerce.

Herwig Stockl, M-commerce’s Head of Design & Deployment at Ericsson, said in a blog post: “Bringing mobile money to India is a challenge but I strongly believe in there is a good chance that we will see it there quite soon. And in an economy like India, the opportunities for mobile commerce are fantastic.”

The Infonetics study says smartphone owners are much more likely than feature phone owners to use their devices either while shopping or for shopping. Usage at home demonstrates that smartphones are frequently used for research on products.

Sixty one percent of smartphone owners use the device for shopping at home. Usage while out and about shows a very similar pattern to usage at home, although slightly more users overall have used their smartphone while out and about (67 percent compared to 61 percent). The least popular shopping activity on all devices is the actual point of purchase itself.

David MacQueen, Director of the Wireless Media Strategies research program, said: “Brick and mortar retailers are not waiting for carriers or OEMs to roll out mobile payments and are leveraging mobile solutions already in the market, such as mobile advertising, couponing, loyalty cards and alternative payments, to drive footfall in stores, and convert that footfall into revenues.”

Infonetics’ Mobile Contactless Payments forecast predicts 158 million mobile payment users, or 2.9 percent of total cellular users in 2017.

Nitesh Patel, senior analyst at Strategy Analytics, said: “A lot of the mobile industry’s focus on mobile’s place in the retail environment has been around contactless payments enabled by NFC technology. The ramp up is extremely slow and even years from now we are expecting only a minority of consumers will use mobile payments.”

According to Internet and Mobile Association of India (IAMAI) and IMRB, India is expected to have close to 165 million mobile Internet users by March 2014, up from 87.1 million in December 2012 as more people are accessing the web through mobile devices and dongles.

Arvind Krishna

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