E-Commerce vs M-commerce

Name: Pritam Roy Chowdhury

Institution: SIBM PUNE

Abstract

Gone are the days when customers queued in front of retail stores or cash counters to purchase a book or a movie ticket. With the emergence of the 21^st century consumers have adopted easier and more convenient ways of shopping. They have responded to the technological advancement by demanding for more convenience and ease. The transition from in-store shopping to online shopping has taken centuries, but the shift (partial) from electronic commerce (e-commerce) to mobile commerce (m-commerce) has merely happened within a decade or two. But at this point all the three modes of commerce co-exist but they are in a never ending tussle (especially the e-commerce and the m-commerce) to overthrow each other as the largest communication channel. Although the two platforms have a common purpose they still possess different features, advantages and obstacles. These are highlighted in details in this paper.

Introduction

With the increase of competition in the business environment companies are striving to keep up with the pace, else they might face the dire consequences of getting devoured by a stronger player. In order to sustain this competition companies are developing better and newer products and services for the clients and customers. With advancement of cutting-edge technologies and state-of-the-art tools, traditional commerce is facing titanic shifts with respect to customer behaviours. One such behavioural change which has taken shape in the business environment has been the demand for portability and mobility. This would help the customers enjoy services and access information wherever and whenever they want. With the recent emergence of the wireless and mobile networks, a new platform for companies to trade their products and services, known as m-commerce is beginning to gather attentions from businesses. The access of internet is necessary for e-commerce but m-commerce connectivity can be established wirelessly in a mobile environment using mobile devices.

Fig 1: Similarity and differences between e-commerce and the m-commerce

From E to M Commerce:

There has been an exodus from e-commerce to m-commerce due to a number of inherent factors:

· Time cost: In case of m-commerce services are provided at the point of need but in case of a traditional e-commerce, customers had to move from a work environment to a computing environment.

· Convenience cost: Due to the fact that the different m-commerce platforms are integrated to the work environment there is no transition required. One can access it from anywhere. Since mobile devices are easy to carry it offers more ubiquity and convenience. Moreover text messages through mobiles are considered to be powerful marketing medium compared to web marketing as it never requires any internet connectivity.

· Customizable: Given that mobile devices are usually owned by individuals and not shared between different users, m-commerce allows the services to be catered towards the users’ needs (e.g. ring tones).

· Increase in number of devices: With the sales of iPhones and Galaxy tabs the potential mass market for m-commerce is sky rocketing. With a shift in the medium of communication from PC’c to tablets and smart phones there is a parallel transition from e-commerce to m-commerce.

Fig 2: Online mode of commerce to overtake in-store mode of commerce

The up gradation of different web technologies have brought about a significant change in the way business is done, and commerce in particular. Customers are more informed about the latest trends in the market and can browse through all the different samples available before finalizing on something. Moreover one does not need to visit the retail outlets for buying stuffs which do not incorporate the factor of decision making, like buying a magazine or buying a recharge coupon. Online shopping is just a part of the e-commerce picture. Other types of businesses like auctions, ticket bookings, online banking and transactions, trading of goods and mere information transaction also constitute a major slice of the e-commerce platform. But consumers are not completely satisfied with this; they want to negate the anywhere anytime paradigm. For example if a person wants to purchase a birthday gift for his friend while on a bus the situation should not be a deterrent. Instead of postponing the time of buy he can purchase it using his mobile phone. The search for the perfect gift can be narrowed by the age, price, type and other factors. This ease of transaction gives the m-commerce an upper hand when compared with e-commerce.

Facts and figures about the purchase using the m-commerce platforms

Here are a few facts and figures:

59% men prefer to make purchases on their phones (and 54% women) while 77% women prefer tablets for shopping (and 74% men).
Men are expected to spend more than women; the projected 2012 m-commerce spend for males is $677 and for females, it is $489.
51% of people aged between 18 and 34 shop on their phones; only 18% of those between 55 and 64 have shopped on their mobile phones.
Smartphone users spend more time on mobile apps than on mobile sites. Users spend 74% of their time on games or social networking apps.
$1 out of every $10 in discretionary spending is spent online.
1 out of 5 people research products on mobile devices while watching TV.

Fig 3: Commodities which users/customers prefer to buy online

Limitations of M-Commerce over E-Commerce

Although the M modes of commerce are gaining popularity there are still a few areas of adjustments which would give it further acceptance among the customer fraternity when compared to the E modes of commerce:

· Attraction: Since the customers are not fixed to a single location while browsing for a particular commodity they look for the nearest store and also for any special offer which prevail in the nearest store. So it very important for the retail stores to clearly mention about the locations and the prevalent offers while promoting their stores on the m-commerce platforms.

· Visibility: Since the screen/visibility and scope of a mobile device is limited as compared to that of a PC, the app (applications) should also be different. Most of the times it is difficult for a customer to browse through the entire catalogues using a mobile app, hence it should be compact, the focus should be more on the important aspects of the catalogue and the impact should be more.

· Light pages: Compared to the e-commerce communication channels, the m-commerce channels suffer from latency and low band width. Hence the page should be lighter so that it can be opened and accessed even when the connections/signals are weak.

· Payment: The payment transactions and the exchange of sensitive data should be made more secure. Online payments are a great deterrent in the successful path of online purchase platforms. If it can be ingrained in the minds of customers that the transactions are safe and secure there might be a significant increase in the number of customers using the online route rather than the in-store purchase route.

Chart 1: M-commerce vs. e-commerce: Number of transactions

The number of transactions made on mobile devices increased by around 600% between July 2010 and July 2011. The increase in e-commerce transactions over the same period was around 70%.

Chart 2: M-commerce vs. e-commerce: revenue

The percentage rise in mobile fee and provision revenue generated through the Zanox¹ network has also been much higher – a 480 percent increase for m-commerce compared with 35 percent in e-commerce.

Chart 3: M-commerce vs. e-commerce: affiliate programme with and without revenues from m-commerce

In July 2011, 58 percent of all affiliate programmes in the Zanox¹ network generated revenue from the mobile channel – compared with only 37% in July 2010.

Chart 4: Comparison of performance by device

Owing to the amount of revenue from each transaction, the iPad is the top revenue generator in m-commerce.

1 Note: Zanox is an unlisted public company, the internationally designed e-commerce – and online marketing services offers.

Obstacles in the path of E-Commerce and M-Commerce

Despite the growing number of e-commerce sites, conducting e-commerce operations is still challenging. A number of obstacles exist. The reoccurrence of any of these obstacles can spoil the experience of a novice user.

· Relevant web sites for the required transactions needs to be identified

· The web sites and applications should be attractive and easy to access

· Security concerns should be taken care of

Even mobile applications have their own set of obstacles. Firstly with the emergence of new mobile technologies and types of mobiles it is very difficult for the companies to develop apps which are compatible and met their business and service expectations. The screen size is a very important factor while designing an app and since each model has a different shape and size the “one size fits all” formula does not work in this case. Hence this translates into an additional burden on the app developers.

The Road Ahead

Although these e-commerce and m-commerce platforms offer a lot of ease and convenience they can never replace some of the factors which can only be experienced through physical purchase. Users are mainly kept separated and everyone is shopping as if they were alone in an empty store. One can never touch the textile to measure its quality or get a feel of its texture. One can never experience the light fragrance of a newly printed book while purchasing it. One also misses the consultation one has with the person who displays the sari; for example, which colour would complement her jewellery or which type of sari would be perfect for the given occasion. These aspects of personalized handling, trust, and face-to-face interactions can only be experienced during physical shopping. The expectation from the newer generation of commerce systems would be to be able to merge both the social and the technological aspects of commerce in the same framework.