Global M-Commerce Opportunities - Essay Example

Global M-Commerce Opportunities Introduction M-commerce is a process of buying and selling of goods and services over the internet with the help of wireless devices like mobile phones, personal digital assistants and many more. The technology intervention behind the development of M-commerce is the use of Wireless Access Protocol (WAP). It is also known as the next generation e-commerce. This emerging technology has enormous opportunity in Germany, as the web ready browsers are more common here than any other countries. Germany is considered as the largest economy of Europe. It has a large market economy with highly skilled laborers and large capital market. In this context, the Gross Domestic Product (GDP) per capita of Germany was 38291.62 U.S. dollars according to the record of 2013. Hence, the position of Germany is fourth in the world economy according to the total GDP. Moreover, from 1970-2013, the GDP per capita of Germany averaged to 27811.79 US dollar. The highest GDP was recorded in the year 2013, which was 38291.62 US dollar and the lowest GDP of Germany was recorded in 1970, amounting to 16932.49 US dollar. As per the economy is concerned, the service sectors of Germany contributes to about 71% of the total GDP, the industries contributes to about 28% and the rest 1% to the agriculture. So on the basis of the economy and the economic condition of Germany, it can be said that m-commerce has great opportunity in Germany (Trading Economics, 2014). As per census report, Germany is considered as the 16th most populated country with a high growth rate creating opportunity for m-commerce. Overview of M-commerce in Germany Over the entire European continent, Germany accounts for nearly 9.9 million of m-commerce users. As per the information by the European Information Technology Observatory (EITO), the amount of total revenue generated through the mobile internet and other related services amounted to less than 19 million Euros in the whole Western Europe in the year 2002. However, in the year 2004, the M-commerce turnover in Germany alone was 280 million Euros. Primarily the revenues were generated by paid-for services that were sold to the mobile subscribers. Over 92% of the bank customers in Germany showed their demand for such mobile services and of them 75% were ready to pay for the services (Tiwari & Buse, 2007). The reason behind such development is due to innovation in technologies, mobile devices equipped with better computing facility, more storage space and easy user interface. From a survey, it is found that, among the total population of Germany using mobile devices, 57% of them are using the facility of M-commerce to purchase goods and services. Among them the people between the age groups of 18-39 were ranked highest. Young generation people are more tech savvy so they prefer to purchase online through their mobile phones rather than going to market and purchase (Telecompaper, 2014). For understanding the convergence between M-commerce and E-commerce, it is very important to understand the two terms in details. E-commerce E-commerce refers to buying and selling of goods and services or transfer of funds or data over the internet. E-commerce may be conducted by using different forms of applications like fax, e-mail, online shopping carts, Electronic Data Interchange and more. The form of e-commerce that is mainly prevalent is business to business, where the companies are using the communication medium of email and fax for promoting advertisement to consumers, sending e-news letter to the subscribers, which are viewed in the form of spam. The benefits of e-commerce is its 24/7 availability, easy accessibility with good speed and variety of selection of goods and services. In order to ensure privacy and security in e-commerce, the business transactions should be authenticated, communications should be encrypted and there should be a control over accessing the resources. For example, the registered and selected users can only have access to them for security. With the help of e-commerce, almost every type of products and services of various categories are available at our door step with just a single click of a mouse (Tiwari, Buse & Herstatt, 2006). M-Commerce M-commerce is also known as Mobile e-commerce as buying and selling of goods and services are carried out over the internet wirelessly by using a mobile or a Personal Device Assistant (PDA). As a result of the increase in adoption of e-commerce, the concept of m-commerce is gaining its popularity. The rapid growth of M-commerce is possible due to the increase in the number of mobile customers that has led to the demand for applications, high security and privacy. It has also led to the adaption of online commerce and advancement in technology by increasing the need for manufacturing wireless handheld devices with high computing power and advanced capabilities (Tiwari et al., 2006). Thus, it can be stated that E-commerce and M-commerce are closely related with each other as the services provided by both are electronically handled and are accessible through telecommunication networks. The only difference is that in M-commerce, the accessibility of telecommunication networks is made with the help of mobile devices. The cost of establishing the infrastructure for M-commerce in any country is very high because it involves the use of advanced technology. For this various expensive technical equipments are required that will ensure a well built infrastructure for carrying out different m-commerce activities. However, due to high economic growth and large economy it would not be a problem for the German Government to set up the infrastructure in their country. From business point of view, the online sites have to spent money to buy spaces in different websites for the purpose of advertisement to sell or promote their activities (Tiwari et al., 2006). From the identification of the importance of m-commerce it can be stated that the market for the same is increasing. Moreover, the development of m-commerce is developing with great pace with the help of advanced technology. Development of M-commerce in banking sector M-commerce is gaining its popularity among different sectors of the society and this has become possible due to technological and demographical development that is influencing the aspects of social and cultural behavior. There has been a development in various sectors like banking, entertainment, retailing, advertising and many more due to the establishment of M-commerce. Among them the main focus can be on the development of banking sector as it holds the major market. With the help of mobile banking, a person can conduct banking and stock market transaction in a quick and easy manner. In this context, it can be stated that m-commerce have developed various attributes in mobile banking, which include mobile accounting, mobile brokerage and mobile financial information (Tiwari & Buse, 2007). Mobile Accounting Mobile accounting is a transaction based banking service, which is based on banking transaction and can be availed through personal handhelds. Mobile accounting can be further divided into two categories which involve Account Operation and Account Administration. Account operation includes monetary transactions that may involve an external account or an internal account. For example, paying any kind of bill is an example of external account and transfer of money between two personal accounts of the same bank is an example of internal account. The services included in Account Operation are, remittance and transfer of money, standing orders for bill payments, transfer of money to sub accounts, and subscription of insurance policies. Due to the innovation of m-commerce these activities can be done effectively and at a rapid pace. Account Administration includes activities that are undertaken by the holder of an account in order to maintain his/her account. The services included in Account Administration are, accessing the administration, changing operative accounts, blocking lost cards and requisition of cheque books. These are again possible with the use of the mobile phones (Tiwari & Buse, 2007). Mobile Brokerage Mobile brokerage refers to the intermediary services that are related with the stock exchange, like purchase and selling of shares, debentures, bonds, derivatives and other financial instruments. Thus, it can be referred to as a mobile financial service of non informational nature. The requirement of informational service is necessary for facilitating brokerage activities. The services that are provided through mobile brokerage are, accessing the administration and order book administration. This aspect is again an opportunity created due to the use of m-commerce (Tiwari & Buse, 2007). Mobile Financial Information Mobile Financial Information may be defined as a non-transactional financial and banking service of informational nature. This service is mainly provided by financial service institutions for providing market information to the customers any time any where via mobile devices. The information may be regarding the market position, shares, securities or other investments made by the customer in the respective bank or other financial institutions. Mobile Financial Information can be further divided into Account Information and Market Information. Account Information includes, enquiries for balance or latest transactions, request for statement, threshold alerts, status of cheques, credit card information, branches and locations of ATM, helpline and emergency contacts and completion status information. Market information includes, rate of foreign exchange, market and bank interest rates, prices of certain commodity, reports and quotes of stock market, product offers and information (Tiwari & Buse, 2007). Thus, mobile banking provides an opportunity to the banks for retaining their customers as well as attracting new customers from different sections of the society by offering them innovative value added services. According to the customer survey, it is proved that the sections of customers mainly belong to the posh class society. Most of the banks in Germany are adopting the concept of mobile banking in order to improve the quality of service they are providing and satisfying the needs of the customers with ease and comfort (Tiwari & Buse, 2007). Factors driving the development of M-commerce There are certain factors that drive the development of M-commerce. Few factors are discussed hereunder: Perceive Usefulness Perceived usefulness is a factor that explains the consumer behavior in the adoption of M-commerce models. This factor helps the consumer to believe that the advent of new technology will increase their work performance. Thus, the perceived usefulness of m-commerce will influence the consumers to adopt the concept of m-commerce because the customers are getting benefits by using this advanced technology (Sadi & Noordin, 2011). Perceived ease of use Perceived ease of use is a factor that explains the level of simplicity and easiness from using a certain technology. This factor is considered as an essential factor in the adoption of m-commerce. There is a positive feedback from the customers regarding the ease of use of m-commerce, which has led to the adoption of the same. It is evident that getting relevant information through the use of mobile is an important innovation for the people at large (Sadi & Noordin, 2011). Speed and Security Purchasing a product or service through mobile device is easy, convenient as well as quicker than any other means. As 4g enabled handsets are being launched in the market, so accessing internet is also becoming faster. Moreover, the online sites are also promising to deliver the products that are ordered in no time. So there is no compromise regarding the speed as well as security with regard to m-commerce. However, while considering security aspect, now-a-days internet is made much secured by implementing the features of privacy so as to ensure safety and security throughout the process. The transactions that are made from reputable m-commerce platforms ensure complete safety. Electronic payments also ensure safety to the consumers as they are from authentic source. Security is important for m-commerce as people make various transactions through the use of mobiles (Demandware, 2011). Innovation M-commerce is an innovative strategy, which has led the consumers to purchase goods and services as well as make transactions by sitting in their home easily through their mobile devices. It also provides creative and innovative payment solutions through mobile. So in this rapid growing market it is required to implement innovation and creativity by every company in order to compete with the growing and changing market trend (Demandware, 2011). Convenience The payment for goods and services can be made in real time, which is convenient for both buyers and sellers. The customers can purchase or sell goods and services at anytime from anywhere due to m-commerce facility. Another main advantage is that, the customer does not have to run to banks or ATM, as they can directly make payments through their debit/credit card through online using mobile phones (Demandware, 2011). Competitive Advantage Integrating the concept of M-commerce in a business can increase its competitiveness along with its profitability. With the implementation of M-commerce, different barriers for opening a business like location, time required for setting up shop and more can be overcome, which may result in the expansion of customer base (Demandware, 2011). Factors hindering the development of M-commerce There are certain factors that hinder the development of m-commerce. The consumers may be unaware of the capabilities of the mobile device for performing the activities of m-commerce or may not have adequate knowledge about the pricing scheme of the transactions made through m-commerce. It is not necessary that all mobile users should know how to use the applications but for the advancement and quick access it is important. There are many people who use their mobile devices only to make and receive calls and messages. There are also some network service providers or manufacturers of mobiles that do not provide access to m-commerce application. So, this may stand as a barrier for the development of m-commerce in countries. Moreover, some people prefer to purchase online or make transactions through their computer, due to faster internet facility or they may feel much expensive to include the m-commerce application to their subscription plan. Another aspect for hindrances is that people are mainly used to physical forms of payments as they can interact with the seller face to face and purchase products. So, all these factors, which are mainly based on customer behavior, may act as a barrier for the growth and development of m-commerce in Germany and globally (Mahatanankoon & Vila-Ruiz, 2007). Success Stories of M-Commerce Mobile commerce is being considered as a success in both banking sector and retail sector. With the help of m-commerce different financial transactions can be carried out easily directly through any mobile device. Buying and selling of shares, debentures, securities, accessing personal accounts, over viewing different financial information, making transactions, through mobile device have become possible as a result of m-commerce. The development of m-commerce has resulted in the growth of retail industry all over the world as retailers can now reach more people at a single time. It has been an added advantage for the retailers as the consumers shop at a higher rate through their mobile due to the ease they are provided with. So, in order to increase the quantity of sales and expand the business it has become essential for every retailer to implement the concept of m-commerce in their business activity (Tiwari et al., 2006). Implications for Business There are certain opportunities for implementing the concept of m-commerce in Germany. Germany is regarded as the fastest growing m-commerce market in Western Europe. The people of Germany are highly quality conscious and due to the good quality service provided by m-commerce, it may act as an advantage to establish m-commerce. Majority of the Germans are tech savvy and they are accustomed to use their mobile device for their day to day needs. So, m-commerce may serve as an opportunity to the people of Germany due to its ease of use and accessibility features. As the people are connected with the internet and mobile, so the promotion of the products can also be made online. Germany is mainly renowned for its technology, thus the adaptability of m-commerce concept in various sectors like banking sector, retail sector, advertisement, would be easy. The banks may adopt this concept to satisfy their customers by providing customers with the facility of mobile banking with the help of which they can perform different financial transaction through their mobile phone. Moreover, m-commerce provides security and the facility to purchase online directly through a mobile device, so it is a preferable medium for any people for purchasing a product without going to mall or other retail stores physically (Tiwari et al., 2006). Conclusion Thus from the above discussion it can be concluded that the concept of m-commerce has great opportunity in Germany. Due to its continuous growing economy, it can serve as an advantage to establish new technologies that may fulfill the needs of people. M-commerce provides with the opportunity to purchase and sell online directly through mobile devices and hence it is highly acceptable as a medium of purchase due to its easy accessibility and security. The concept can be implemented in various sectors like, banking, retail, advertisement, etc. which may serve to the development of the overall economy of Germany. Therefore, from the overall analysis it can be stated that m-commerce have opportunity in various sectors as people are now more tech savvy. References Demandware, inc. (2011). Critical success factors for mobile commerce. Retrieved from http://www.demandware.com/uploads/resource/CriticalSuccessFactorsforMobileCommerce_WP.pdf Mahatanankoon, P., & Vila-Ruiz, J. (2007). Why wont consumers adopt m-commerce? An exploratory study. Journal of Internet Commerce, 1-128. Sadi, S., & Noordin, F. (2011). Factors influencing the adoption of m-commerce: an exploratory Analysis. International Conference on Industrial Engineering and Operations Management, 492-499. Trading Economics. (2014). Germany GDP per capita. Retrieved from http://www.tradingeconomics.com/germany/gdp-per-capita Telcompaper. (2014). Mobile commerce used by 57% of German device owners. Retrieved from http://www.telecompaper.com/news/mobile-commerce-used-by-57-of-german-device-owners--1015808 Tiwari, R., Buse, S., & Herstatt, C. (2006). From electronic to mobile commerce: technology convergence enables innovative business services. Institute Of Technology and Innovation Management, 1-19. Tiwari, R. & Buse, S. (2007). The mobile commerce prospects: a strategic analysis of opportunities in the banking sector. Research Project Mobile Commerce, 1-222. Read More