Enhancing M-commerce Adoption in Asian Countries - Case Study Example

Problem opportunity One of the areas in the new wireless economy is the expansion of m-commerce or mobile commerce which involves the use of a handheld mobile device to conduct transactions through the wireless network (Shim & Shim, 2003). M-commerce was characterized by novel, location-based services delivered by a variety of hand-held devices such as Personal Digital Assistants (PDAs) and enhanced alphanumeric communicators such as Blackberry devices (Dholakia, Dholakia, Lehrer & Kshetri, 2002). Meteoric growth of mobile phones in the 1990s urged the mobile phone companies to integrate m-commerce technologies into their business models. This technology has seen rapid development and it has increased an organization’s ability to reach its customers regardless of the geographic distances due to which even farmers in India and Bangladesh made use of this technology. This in turn has created more demand for more advanced mobile devices with advance features. However, the success of m-commerce lies on mutual trust as trust plays a vital role in acceptance. It has become vital to the economic growth of a nation. Context While more than a third of mobile users in Japan had already used their phones to buy goods by 2003, m-commerce was introduced in Thailand only in 2005 (ATM Marketplace, 2003). It has been found that countries like Korea and Japan experience widespread penetration and success while another important Asian country – namely Thailand lags behind in e-commerce penetration. Literature Review Developing countries have an advantage in adopting technology or ICT as they just have to follow the leader and thereby avoid costly mistakes (Gray & Sanzogni, 2004). Thailand has been competent in every respect, including political stability and financial robustness in introducing technology but it did not succeed. Penz (2006) contends that differences in behaviour and response pattern differ across culture and societies. Individuals group together through shared beliefs, emotions, lifestyles and consumption patterns. These perceptions, ideas and representations become the social creations and people base their responses accordingly. The attitude of the Thais has prevented new technologies from being accepted by the community at large (Gray & Sanzogni, 2004). This is because they do not tolerate failure and they do no readily accept ideas from the younger generation. This is also the reason that the government was slow to acknowledge the importance of internet for the progress of the nation. The Thai culture is based on trust and relationships with others, and the decision making is not a team approach. Subordinates do not dare to make mistake, take initiatives and just accept the decision taken by the people in authority. Besides, the study by Penz found that m-commerce was not really necessary although helpful in daily life. People who want to save time have their own concept of time. Mobile phones signify pleasure or freedom thereby determining people’s significance within special groups but in Thailand, the people would not even think of adopting m-commerce unless it has been approved by their bosses or elders. In contrast, in Korea and Japan the younger age groups have more exposure in wireless and mobile technology with no regard to culture. The younger people replace their handsets every six months. Japan and particularly NTT DoCoMo lead the telecom market in content for mobile data service with i-mode (Lembke, 2002). Cell phones in Japan are no more phones but have become a way of life. It has pervaded their culture and has changed the way people think and act. They use their cell phones or mobile wallets (Anonymous, 2007) to get e-coupons for discounts on food and entertainment, pay bills, apart from checking and replying to emails while traveling to work (Faiola, 2004). Cell phones are an extension of their self and have become a part of their identity. Both in Korea and Japan, the younger mobile users associate the mobile phone with social status. The success of m-commerce in Japan can be attributed to building a mobile internet strategy to focus on the ability of the users to pay via their device (Ding & Hampe, 2003). At the same time, it is important that merchant and users recognize the perceived benefits like reduced transaction time, reduce transaction cost as well as being able to solve a problem. The current situation does not meet these parameters and people use it for lack of a better alternative. This corroborates with the study by Penz which found that that m-commerce was not really necessary although helpful in daily life. In Thailand, people seldom use mPayments as only 45 percent own credit cards and even those that own it, have serious antipathy towards using it because of mistrust and potential fraud (Ding & Hampe). This again can be related back to the culture of the nation where the society forms the norms. Cultural values determine the appropriateness of the contents in mobile internet, according to Dholakia and Kshetri (2002). The i-mode users in Japan use it for such trivial sites like downloading Pokemon characters or caller tunes that may be considered offensive in Thailand. This demonstrates the difference in their attitudes and behavioural intentions. The Japanese mobile phones work not only as credit cards but as music players and train tickets (Rising Sun Of Nihon, 2006). They even use it to access the internet while they travel to work. It is no wonder that m-commerce in Japan is way ahead of other nations. The Japanese society wants to save time and prefer to use technology even while traveling (Baldi & Thuang, 2002). Japanese culture forbids them to make calls in subways which have helped to make data services popular. Mobile phones represent their status and they use different phones for different occasions. The individual culture forms the basis of values of the individual and their attitude towards lifestyle and comforts. Japan has the highest number of 3G users than any other country in the world, with South Korea a close second. This is because in Japan and South Korea, major wireless operators like NTT DoCoMo and SK Telecom have been successfully implementing m-commerce. In Japan particularly, with 65% of mobile penetration, the mobile phones are doubling up as mobile wallets which imply that they also perform the function cash and credit cards (Voice&Data, 2006). This combined with other services such as GPS and location-based targeting that have been able to open up new market possibilities with new revenue streams. Another reason why Japan has high concentration of m-commerce is because of the technology used. I-mode uses c-HTML which is a simple program language and has contributed to the popularity and success of i-mode (Baldi &Thuang, 2002). Other countries like Thailand use WAP technology which is based on the more comprehensive and sophisticated language WML. While UBC Thailand uses SMS (short message services) to notify customers of the forthcoming programs to be broadcast on their channel, the mobile companies in Japan and Korea offer m-commerce as their core strategy (Manicam, 2003). They offer services including mobile messaging, mobile banking, mobile brokering, mobile cash, mobile shopping, mobile auction, mobile medical report, and mobile passport. However, in Thailand more than 90% of the users use outdated technology like 1G or 2G phones that do not support any data services except SMS and VMS. Besides, in Thailand 70% of the users hold prepaid account and that is considered a detrimental factor for the success of mobile data services. Like Japan, in Korea the efficiency of mobile phone is determined based on its utility. Technology, ease of use, the entertainment it provides. In nutshell it depends on what the mobile companies can offer. All these factors increase the perceived usefulness of mobile phone usage (Cho, 2008). In conclusion, m-commerce signifies freedom, pleasure and comfort although not really necessary in daily life. Attitudes also include mistrust and fraud as in the Thai society. While the Japanese have been innovators, the Thais have been late adopters. The adoption is totally based on the attitude and perception towards life and the recognition of benefits in implementing m-commerce. Conceptual framework Based on the above literature review which determines that attitudes and behaviours impact the use and application of technology, the technology acceptance model (TAM) would be adopted for this study. Tam is a theoretical model useful for predicting if users will adopt new information technology (Saljoughi, 2002). It has also been found to be a valid theoretical model. TAM takes the stand that acceptance and use of IT depends upon an individual’s belief upon the use. Although TAM was basically developed to explain computer usage behavior it has been used for many different researches in the field of IT. Under this model, attitudes predict intentions and intentions predict behavior (Saljoughi, 2002). According to Zhengchuan, Chenghong and Hong (2008) the importance of m-commerce depends upon consumer acceptance of new and well-designed technologies. The TAM model focuses on Perceived Usefulness (PU) and Perceived Ease of Use (PEOU). Source: Saljoughi, 2002 Several variables can arise in this model when trying to research on m-commerce. These include behaviour intention, attitude and perceived usefulness. Behaviour intention – This basically informs of the intention of the user to use a system – here the intention to use m-commerce. It would inform of the attitude that users have towards m-commerce because attitudes have a direct and positive effect on intentions. Attitudes – The response that an individual has towards a stimulus conveys the attitude of the person towards the stimulus. According to TAM, PU and PEOU are the primary drivers of the Attitude construct. Attitude is important because some users may still use m-commerce despite having a negative attitude because the environment warrants the use. This construct would help to ascertain the satisfaction level of the users of m-commerce. Perceived usefulness - PU is the tendency of the people to use or not to use the technology which relies on their faith and belief that it will help them to perform their tasks better. The findings have been validated on m-commerce and it has significant positive effect on usage intention. Perceived Ease of Use – PEOU brings out the difficulty that a person faces in the use of technology. It would depend on whether the performance benefits in using technology can be outweighed by the difficulty in using technology. There are other factors that inhibit people from using technology which include the security and trust issues apart from financial aspect. In this case also the attitude becomes important because at times the user may use the technology under compulsion but gradually realizes the ease of and the importance of using m-commerce. Once this happens, the attitude become positive. This model would help to analyze the human behaviour on using information system. It is IT specific and has been designed to provide sufficient explanation for and the acceptance of the diverse users of technology. This is a quick, inexpensive and user-friendly method. Thus the framework would involve determining the perceived usefulness, the ease of use, the attitude, the behaviour intention and finally the adoption or application in m-commerce. Research design Since Thailand has a lot of migrant community including students, research would be conducted in the educational institutions as the youth are more inclined to adapt to technology. This would highlight the differences between the local youth and the migrant youth as the local youth would tend to follow their superiors, denoting high power culture in Thailand. Questionnaire surveys would be conducted with statements concerning m-commerce ranging from agreement to disagreement over 5-7 different scales. Survey questionnaires would emailed to the students and focus groups. Organizations would also be interviewed – both the public and the private sector. Retail chains, the mobile companies and the government organizations would be focused upon. Open-ended interviews would be conducted so that insight can be gained on the attitudes and behaviours. Discussion – expectations and risks It is quite likely that the responses may not be correct because at times companies are reluctant to share their strategies especially when they have drawbacks and failures. It will be costly to conduct interviews and that is a constraint so sponsorship would be sought. The companies would be selected randomly and emails sent with a request to participate. Some incentives by way of gifts would be given for those willing to respond. Conclusion The attitude in Thailand is very conservative and this affects their behavior and the use of technology for m-commerce. They are still stuck with 1G or 2G technology while Japan and Korea have moved on to 3G. Technology is available even in Thailand but its adoption has been slow due to their intentions and behvaiour. Low power culture in Korea and masculine culture in Japan have aided the adoption of advanced technology thereby enhancing the acceptance of m-commerce. 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