Mobile shopping
m-Commerce has arrived in Oman in small doses – like when we subscribe to a stock update service or download songs on our cellphone, says Al Tanner
According to Juniper Research, the global mobile commerce market (m-Commerce) will grow to RO34bn by 2009 - a mere fraction of the e-Commerce market, but nice business if you can get it. Research from the ARC Group projects that by the end of this year there will be 12mn m-Commerce users in the US - a small figure compared to the 95mn Americans who made Internet purchases even in 2004 but still a good earner.
Consulting firm Informa predicts that private and business mobile phone users will spend RO58bn on data services, getting the weather forecast, football scores, breaking news - that kind of things - in 2011, compared to RO34bn in 2006. Of that, according to Informa, Asia will contribute RO23.bn, Europe RO19.5bn and North America RO9.6bn.
What have these figures got do with us here in Oman? Are we even ready for m-Commerce? After all, do you know anyone who's been to amazon.com on their mobile and ordered a book? Fair point," agrees Karim Rahemtulla, MD of KOM-based Infocomm. "And while that sort of buying online is one aspect of m-commerce, this is not all it is about. It is easy to be dazzled by all these predictions and figures in the billions when what we should really focus on is just one figure - RO1. That's the value of an average m-Commerce transaction worldwide and actually the figure is often much less. These small payments - micropayments - are powering m-Commerce."
And with Infocomm being a leading m-Commerce provider, Rahemtulla should know what he is talking about. "m-Commerce has definitely arrived in Oman. "Most BusinessToday readers are probably m-Commerce consumers already whether they realise it or not. After all, downloading ringtones or wallpapers is not that unusual, is it? And I'm sure your children have downloaded games or songs on their phones and perhaps you have subscribed to a stock update service on your mobile."
Micropayments are the driving force behind the global surge in m-Commerce. Tower Group estimates that in 2008, 90 per cent of purchases made on the handset will be micropayments for content and services to be used on the phone itself, that is: ringtones, images, games and the like. One estimate puts the value of this spend in 2008 alone at RO9.2bn. This is the m-Commerce wild frontier; its bleeding edge.
Computers or cellphones?
So isn't Internet shopping enough for us? Certainly it will be a while before we use our phone for shopping more than we use our computer. But just think about this: while more people already own a phone than a computer, it is estimated that 800mn more mobile phones will be delivered globally this year. The majority of these handsets will offer little apart from basic voice and SMS services but here's the thing - we don't need an expensive all-singing, all-dancing phone to become an m-Commerce user. As long as the phone has an SMS function, m-Commerce is at our fingertips. It's simple and we can all join in.
Critical mass is not the only m-Commerce driver, convenience is another big factor and let's face it, phones are already integrated into our everyday life. Your phone is with you wherever you go and what's more, it can be used on the go. Importantly, people are not only very comfortable using their mobiles, they are also used to using them for a variety of functions. The phone capability of any handset is just a small part of what we use it for - we use our phones to take and view photos, listen to music, consult maps, play games, make diary entries, wake us up and more. So, why not add shopping to the list?
The driving force
But right now, what's really moving m-Commerce forward is the youth market and its increasing demand for smaller purchases such as the ubiquitous ringtones and games.
Gartner research highlights gaming in particular as a powerful and profitable lure for this sector. As far back as 2001, the Silicon Valley World Internet Centre forecast that we would all fall in line with the Japanese model where the youth are the torchbearers in the m-Commerce market, showing parents the way with applications and devices.
"True," says Rahemtulla. "Young people are really incredibly important in this sector, spurred on by their love of gadgetry and the fact that they have grown up with technology. It is a global trend. Given the size of the youth population in Oman, the degree of mobile penetration here and the relative lack of PC and Internet penetration, the implications for m-commerce are significant."
What then is the future of m-Commerce? Research on the subject, from the Tower Group amongst others, indicates that micropayments for handset-based content will continue to dominate with the streaming of mini-video clips or mini-segments of films or TV shows becoming a big factor in the commercial traffic.
However, games, ringtones and mini-clips are not the end of the story. What is considered one of the most exciting developments in m-Commerce, the next big thing if you like, will be using your phone as a credit card.
Sounds like science fiction? "Well, again it's initially all about small payments," comments Rahemtulla. "In fact, park-and-pay is already well-established in Oman and using your phone, say to get a drink from a vending machine or buying a bus ticket, is not so different or such a big step. And if you use your phone to get a bus ticket then why not a plane ticket? From there it's not that hard to imagine using your phone at the check out to pay at the supermarket or in a restaurant."
In Oman we are not yet geared up for paying for goods and services by swiping a phone over a point of sale terminal, but way back in 2003 at South Korean shops and restaurants customers could pay for goods and services using a new mobile phone that doubled as a credit card. Cha Jin-seok, head of m-Finance for SK Telecom, South Korea's largest wireless operator, was able to say proudly: "In Korea, the mobile phone has become an electronic wallet. There is no place else in the world with such an advanced mobile payments service." Just wait, it's on its way.
Then there's actually buying goods and services via your mobile phone browser - for example, buying a book on amazon.com. Internet shopping has already paved the way here and shopping via your phone certainly has the convenience factor. In fact, it's about to become even more convenient as, according to Gartner Research, many major retailers are considering adding a mobile channel in the next year or two. But the forecasts are that, at least initially, activities such as locating shops and comparing prices will be the more popular ones.
The development of more sophisticated applications, handsets and operator networks will of course also drive the market and engage more of us in m-Commerce transactions. Predictably, Gartner tells us that the youth are more likely to want to conduct a retail activity on their mobile and the popularity of i-Mode in Japan, the fast and cheap m-Commerce success story that everyone wants to emulate, seems to underline this.
The big boys too are showing interest: Google is moving forward with major mobile initiatives and Real Networks, the creators of the real media player, are moving into the gaming market. The future of m-Commerce seems assured. "And by the way," smiles Rahemtulla, "I have bought a book from amazon.com on my phone."
