10 reasons why Mobile Commerce in India may get bigger than Online Commerce

mcommerce-olinecommerceeCommerce industry is booming in India, and mCommerce is following its lead. With both big and small online businesses developing special mobile websites and apps, it is evident that even they have realised how prominent this platform is. In a country where there are over 930 Mn mobile subscribers against 160 Mn Internet users (Including 86 Mn mobile Internet users) it is quite possible for mCommerce to become even bigger than eCommerce, because of the reasons mentioned below :-

1. Affordability of mobile devices

It is no denying fact that mobile devices like cellphones and tablets are far more affordable than desktops and laptops, and an average Indian consumer doesn’t have much disposable income in his hand to buy high end devices. Plus, one doesn’t even really need expensive smartphones to shop online or make mobile transactions. According to a report by Avendus, there were over 36 Mn smartphone users in India, but over 431 Mn Internet capable mobile devices in use in India as of December 2012, thus forming a strong consumer base for mCommerce. Moreover, due to their mobility and affordability, even tablets are high in demand in India.

2. Doing things on the go

Mobile devices give the freedom to do things like shopping, booking tickets, making hotel reservations etc. anytime anywhere. And in India, there is a large young consumer base, who want fast instantaneous processes on the move. One doesn’t need to wait to reach home or to a cyber cafe to pay bills or make an urgent purchase online.

3. Mobile Internet connectivity

mCommerce customers are not bound by limited wired and WiFi Internet connections. In the last 3-4 years, the number of users who access the Internet through a 3G connection has grown to round 22 Mn. Now compare this with the 15 Mn fixed line broadband connections accrued over the last 17 years, there is a notable difference. Even though eCommerce has spread its roots throughout the country, it still hasn’t reached the places where people have no broadband or no computer. mCommerce could and will change this.

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4. Mobile Payments

Mobile Payments is a new mode of payment as an alternative to traditional methods like cash, cheque credit cards etc. A customer can use a mobile phone to transfer money or to pay for goods and services. A mobile payment could be made by an app, data connection, IVR and even SMS, so anyone who has a bank account can make a transaction. This could aid in reducing cash-dependencies of people, particularly in rural India.

5. Security

Mobile platforms are still relatively free from viruses and other threats. And even in case of a fraudulent activity, credit tracking by GSM/GPRS/GPS is easy and quick. Thus increasing the credibility, and giving better assurance to the sceptical India population. Also, seldom do people part from their phones, so there are less chances of misuse of login information that may happen on computer systems.

6. Bridging the gap between eCommerce and conventional stores

Brick and mortar stores are getting a lot of heat from online stores,which are luring their customers away by offering better product prices and discounts. When a person goes out for shopping, mobile acts as a conduit between the two poles, people compare prices online before buying something. This could be, and is being used by retailers to their benefit by offering location based services, barcode scanning, and push notifications to improve the customer experience of shopping in physical stores.

7. Greater target audience for advertisements

The problem with online advertising is that people have to be ‘online’ to view it. Several eCommerce players in India have come out with TV commercials to advertise their websites. However, mobile is a better platform to do the same. Even with Government’s regulation on bulk messaging, companies could still target a mass of people collectively by sending promotional content via SMS if a user hasn’t activated the DND service or wants to receive those ads.

8. Low tariffs-High revenue

Mobile data tariffs in India are the cheapest in the world. Unlike PC Internet affordability of 3G connectivity has improved significantly. For instance, Airtel reported its 3G price to be INR 0.25 per MB last month, which is less than the global average of 3 cents or INR 1.89. Such low rates will encourage people to use more of Mobile Internet, and eventually engage into mCommerce as well. Considering the large mobile user base in India, the government could work with mobile companies to increase the overall revenue, by increasing Average revenue per user (ARPU).

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9. Government policies

To bridge the digital gap in the country, in September this year, the Indian government had proposed a scheme to spend INR 7860 crore to distribute 2.5 crore mobile phones and 90 lakhs tablets specifically to the rural population. Plus there is another initiative to give tablets to the college students. As mentioned earlier, these devices are more affordable than computers but still serve the primary functions. If these schemes are successfully implemented, then the mobile device user base will further grow and in turn increase the customer base for mCommerce services.

In addition to this, since reducing cash-dependencies of Indians is one of the biggest challenges of the government to alleviate the status of Indian Rupee, mobile transactions could come as a big relief. As RBI is already encouraging people to use credit cards and debit cards, together with mPOS systems, mCommerce has a bright future in India.

10. Personalisation

In a true sense Personal Computers are not really personal. Desktops and even laptops are shared by multiple people living in the same family or working together in an office. However the same isn’t true in case of cellphones. Whichever strata of the society a person may belong to, a phone has become an indispensable extension of oneself. People are more comfortable using their phones for various activities, as it gives them a sense of privacy and security, while offering easy usability. Since already there are way more mobiles in India than computers, mCommerce could gradually grow bigger than eCommerce.

To contact the author, write to sugandh.dhawan@wirefootindia.com

  • Vikas

    While the mobile subscriber base is quite large and hence the mobile internet base, lack of Indian languages and focus on only English reduces the addressable market significantly

  • rakesh kumar

    It is all a Dream come True wish list and table talk based on peripheral facts. Even if 100% of Mobile users start using internet on the Go, only a few percentage will make a commercial transactions. In India, internet services on Mobile majorly means using social media, games, music, videos. Even if people visit ecomm sites on mobile, it is just to seek information, there is a rare chance that will ever shop. If you disagree with my views, I request you to conduct a survey about all e-comm purchases in India with a clear comparison between % of shopping done on Mobile Vs computer/laptop. It is not just few years but it can take a couple of decades for a sizeable percentage of people to use ecomm on Mobile

  • shalinisingh

    i disagree with the headline..it will take few years say five or more to popularize mobile commerce. ecommerce is yet to take off and the big wicket here is COD which is a new as compared to the other part of the world. Yes, Mobile Internet will help in the growth of ecommerce – and if a transaction it will happen on a Laptop/ desktop/ tablet for sometime to come.