With the growing popularity of browsing on mobiles, m-commerce is set to boom in India. But there are several challenges companies must tackle before mobile shopping becomes seamless By Jasmine Desai
There are immense possibilities in mobile commerce worldwide, and we have just made a beginning. According to Gartner, global mobile payment transactions surpassed $171.5 billion in value in 2012, a 61.9 % increase over 2011. However, the number of mobile payment users reached just a little above 212 million in 2012, leaving ample room for a large population base to be tapped (global population hovers around 7 billion).
“We expect global mobile transaction volume and value to average 42 percent annual growth between 2011 and 2016, and we are forecasting a market worth $617 billion with 448 million users by 2016,” said Sandy Shen, Research Director at Gartner, in a press release.There has been a powerful transformation from traditional methods of commerce to the online platform in the past few years. And with the popularity of feature-rich mobile phones, this transformation is into the next phase of evolution.
Regulations
As per Neha Gupta, Sr Research Analyst, Gartner, “When it comes to payments, there is no regulatory [limit] for the amount of money that can go through the mobile.” However, for payments involving overseas transactions, there are some checks and balances in place.
Says Akhilesh Tuteja, Partner, KPMG, “The regulatory scenario needs to open up, although a lot of regulations are being refined to make them more consumer and industry friendly. It is a new channel, so there’s need for people to be cautious.”In India, not too many high-value transactions are taking place on the mobile platform, but there will definitely be an increase both in volume and value in the next couple of years. For one, the consumers are still concerned a lot about security. There are glitches, too, involved in the payment system in India, due to which many payments do not go through successfully.
Challenges in mobile
The mobile devices come in various form factors, with different operating systems, interfaces, fonts, etc. This complexity poses a challenge to companies entering into the m-commerce space, be they solution providers, portals or others. In this context, one cannot offer all the features and functionalities of the desktop on the mobile. Companies have to scale down ambitious plans to make the m-commerce experience comfortable and easy for customers. Also, the Internet connection speed on different mobile phones is different, with a majority of phones in use in India still not able to support faster, more stable connections. This proves to be another technical challenge for service providers.
Online and mobile commerce players are tackling these problems by developing custom applications that can support at least those handsets that have a large user base. For instance, Snapdeal.com has benchmarked its application against different internet speeds and has developed a distinct platform that enables it to know the mobile experiences of various users. The company tries to design its application to provide a good experience to about 80-90% of users.
“While designing the application it is kept in mind how the UI element changes with the screen size. We run tests initially to see how things will change,” says Ankit Khanna, VP – Product Management, Snapdeal.com. The third party payment piece, however, becomes a challenge. The company plans to soon launch an iPhone application.The mobile commerce technology has come very close to credit card technology, but interoperability remains a key challenge.
The promise of NFC and analytics
A recent study by Gartner indicated that 50% of smartphones in the near future will feature Near Field Communication (NFC) technology that enables contactless payments.According to Sunil Lalvani, Director, Enterprise Sales, BlackBerry India, “This method of payment has traditionally been achievable through a ‘contactless payment card’, looking much the same as a regular credit or debit card but with the card’s chip housing NFC technology. This is a burgeoning trend, and we hope to see smartphones increasingly take the place of traditional cards for many consumers.”
Another development that is slated to make an impact is the growing use of analytics tools. Says Khanna of Snapdeal, “Analytics will change things a lot. If I am able to understand who you are as a consumer, your interest areas, what kind of a product you are looking for, if I am enable to initiate similar experience on the mobile as on the Web, then I am there…The aim is to personalize customer experience as much as you can for the mobile.”
Khanna goes on to assert that if an organization is not accruing 20% of profit margin from the mobile platform year-on-year, then it is not doing justice to the platform and needs to make changes accordingly. Mobile commerce has a bright future on the horizon. Says Tuteja of KPMG, “There is a lot of potential in India. Presently, the Indian economy has a huge amount of cash in circulation. But RBI is looking very strongly at supporting electronic transactions.”
