1.
Unit 5 –
E-Commerce
Technologies
MOBILE COMMERCE

2.
◼Mobile commerce (m-commerce,
m-business)—any e-commerce done in a
wireless environment, especially via the
Internet
▪Allows direct access to information on the go
▪Can be done via the Internet, private communication
lines, smart cards, etc.
▪Creates opportunity to deliver new services to existing
customers and to attract new ones
WHAT IS M-COMMERCE
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3.
◼ Asia-Pacific along with the Middle East and Africa were global leaders in 2014 when it
came to the usage of mobile for online shopping, according to a report by ystats.com.
◼ Over half of online shoppers in these regions made purchases through mobile devices.
In South Korea, close to a third of shoppers did so on a weekly basis, with the share of
m-commerce on total online sales topping one-third in the third quarter of 2014.
◼ In China, the number of mobile shoppers grew to more than 200 million, while in India
the share of mobile shoppers on online buyers in the cities increased from just over
20% to more than half.
◼ Meanwhile, in the Middle East and Africa, m-commerce sales in the UAE grew at a
triple-digit rate in 2014, and in South Africa close to a third of smartphone users
already had experience with mobile shopping.
GROWTH OF MOBILE-COMMERCE (1/4)
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4.
◼ In the U.S. the share of m-commerce sales through smartphones was below that of
tablets and is forecasted to decrease in the coming years. A similar trend is
observed in the UK.
◼ Both in Germany and France, the share of m-commerce was a small double-digit
figure, while in Russia m-commerce sales were estimated to double last year and in
Brazil they reached double-digit share of sales of large online merchants.
◼ Ecommerce companies worldwide benefit from the boom in m-commerce growth,
with shares of mobile sales at double-digit figures. Amazon and eBay saw over
60% of their total traffic from mobile devices during the last holiday shopping
season, while China-based ecommerce giant Alibaba increased the mobile gross
merchandise value on its marketplaces by more than three times.
GROWTH OF MOBILE-COMMERCE (2/4)
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5.
◼ According to a study by PayPal and Ipsos, m-commerce, (purchases made on tablets and
mobile devises) will grow 42% annually.
◼ Research carried out by PayPal and Ipsos indicates that mCommerce growth (purchases
made on smartphones and tablets)will triple that of eCcommerce worldwide. Over the
last few years, m-commerce has grown approx 42% annually, compared to 13% for
e-commerce in general (mobile included).
◼ "We are on the cusp of the mobile era”, says Anuj Nayar, Senior Director of Global
Initiatives for PayPal. “At PayPal, we have seen our mobile growth too.”
◼ The study, which researched the online shopping behavior of more than 17,500 consumers
in 22 countries, shows that Mexico and Brazil are leading this trend towards mobile
commerce.
GROWTH OF MOBILE-COMMERCE (3/4)
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6.
◼ In Brazil, the estimated average growth of m-commerce since last six years is 46%. This figure is in contrast to
the 17% average growth in e-commerce purchases by Brazilians during the same period.
◼ In Mexico, Generation Y (young adults between 18 and 34 years old) leads this trend with 88% of purchases
made on smartphones. This year, Mexico will record a 39% increase in m-commerce and 19% in e-commerce.
◼ Globally, 64% of mCommerce users have made a purchase through an app and 52% through a web
browser. In general, those that have used both prefer shopping through apps (47%).
◼ The most common activity of shoppers with smartphones worldwide is to search for information.
◼ According to the PayPal study, 36% said that they searched for product information on their Smartphone, 27%
sought information about a store or business, and 25% read customer reviews.
GROWTH OF MOBILE-COMMERCE (4/4)
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7.
◼ Mobile Health Services, includes the practice of medicine and public health
supported by mobile devices. The term is most commonly used in reference to using
mobile communication devices, such as mobile phones, tablet computers and PDAs,
for health services and information
◼ The mHealth field has emerged as a sub-segment of eHealth, the use of information
and communication technology (ICT), such as computers, mobile phones,
communications satellite, patient monitors, etc., for health services and information.
◼ mHealth applications include the use of mobile devices in collecting community and
clinical health data, delivery of healthcare information to practitioners, researchers,
and patients, real-time monitoring of patient vital signs, and direct provision of care
(via mobile telemedicine).
MOBILE HEALTH SERVICES
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8.
◼ E-commerce payment systems can also benefit from wireless technology. One
scenario involves a consumer not having to stand in line to make a purchase, but
simply paying for an item though a wireless device. Final payments might even be
billed to a telephone company.
◼ Wireless technologies like Bluetooth, NFC, RFID may enable a list of available
services to be generated automatically on a device when a user walks close to a
wireless-equipped cash register.
◼ Wireless technology is well suited for bringing e-commerce to automobiles and
other forms of transportation. Traffic advisory systems can warn of impending
traffic jams. Cars will eventually be able to report potential problems to service
centers themselves. The service center might even make minor adjustments to the
car online. Car-mounted devices will eventually allow regular Internet access,
although safety issues of “browsing while driving” must be addressed.
WIRELESS APPLICATIONS (1/3)
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9.
◼ While most initial mobile commerce applications seem to be aimed at the
business-to-consumer market, business-to-business and intranet applications are also
appearing.
◼ Service technicians can be dynamically assigned new tasks and sent problem
information while they are traveling.
◼ Sales people can go literally anywhere in the field and access product information
and customer accounts, although the applications right now are still subject to the
constraints of current wireless devices.
◼ Organizations must address the issue of designing complex, robust applications that
work well within these current (and any foreseeable) device limitations. Flexibility
can be integrated into designs to enable future functionality.
WIRELESS APPLICATIONS (2/3)
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10.
Wireless
Features
Cellular WLAN (Wifi,
WiMax)
GPS Satellite-base
d PCs
Ad-Hoc &
Sensor
Networks
Application
Area
• Field Service
• Sales Force
• Field Audit
• Vending
• Public Safety
• Stock Trading
• Airline
Activities
• Bill paying
• Transportation
Industry
• Retail
• Warehouses
• Healthcare
• Telediagnostics
• Students
• Hospitality
• Office
Applications
• Manufacturing
Industry
• Surveying
• Car Rental
Agency
• Robin Toll
Collection
• Sports
• GPS
• Multimedia
• Telemetry
• Battlefield
Surveillance
• Environmental
Sensing
• Machinery
Prognostics
• Roller Bearing
Diagnostics
• Roadside
weather
conditions
• Bio-sensing
• Bridge damage
detection
WIRELESS APPLICATIONS (3/3)
Table : Potential applications of different wireless services.
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11.
TECHNOLOGIES FOR M-COMMERCE
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12.
◼ GSM - Global System for Mobile communication, wireless network technology developed
in Europe that is used throughout most of the world. GSM phones make use of a SIM card
to identify the user's account.
◼ GPRS – General Packet Radio Service, is a packet-based wireless communication service
that promises data rates from 56 up to 114 Kbps and continuous connection to the Internet
for mobile phone and computer users, it’s a 2G Cellular technology, yet also available on
3G network.
◼ EDGE- Enhanced Data GSM Environment is a faster version the Global System for
Mobile (GSM) wireless service designed to deliver data at rates up to 384 Kbps and enable
the delivery of multimedia and other broadband applications to mobile phone and computer
users.
ABBREVIATIONS (1/3)
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13.
◼ LAN - A local area network is a computer network within a small
geographical area such as a home, school, computer laboratory, office
building or group of buildings.
◼ MAN - A metropolitan area network is similar to a local area network
(LAN) but spans an entire city or campus. MANs are formed by connecting
multiple LANs, yet it is smaller than the area covered by a WAN (Wide Area
Network).
◼ UMTS - Universal Mobile Telecommunications System, UMTS is a
third-generation (3G) broadband, packet-based transmission of text, digitized
voice, video, and multimedia at data rates up to 2 megabits per second (Mbps)
ABBREVIATIONS (2/3)
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14.
◼ WiMAX (Worldwide Interoperability for Microwave Access) is a wireless
communications standard designed to provide 30 to 40 megabit-per-second data
rates, with the 2011 update providing up to 1 Gbit/s for fixed stations.
◼ UWB - Ultra-WideBand is a class of technologies that transmit on a large range of
radio frequencies at the same time for what are typically very short durations.
Generally the technology is aimed at short range, high bandwidth applications use,
and is often mentioned along side of Wireless USB.
◼ RFID - Radio-frequency identification is the wireless use of electromagnetic fields
to transfer data, for the purposes of automatically identifying and tracking tags
attached to objects. The tags contain electronically stored information.
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ABBREVIATIONS (3/3)

15.
Wireless, by definition, means RF (Radio Frequency) and absence of physical
security safeguards. All the vulnerabilities that exist in a conventional wired
network apply to wireless technologies.
• Malicious entities may gain unauthorized access to an organization’s
computer network through wireless connections, bypassing any firewall
protections.
• Sensitive information that is not encrypted (or is encrypted with poor
cryptographic techniques) and that is transmitted between two wireless
devices may be intercepted and disclosed. Whatsapp messages are encrypted
end-to-end.
SECURITY ISSUES IN CELLULAR
TECHNOLOGY (1/2)
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16.
• Malicious entities may steal the identity of legitimate users
and masquerade on internal or external corporate networks.
• Malicious entities may, through wireless connections,
connect to other organizations for the purposes of launching
attacks and concealing their activity.
• Interlopers, from insider or out, may be able to gain
connectivity to network management controls and thereby
disable or disrupt operations.
SECURITY ISSUES IN CELLULAR
TECHNOLOGY (2/2)
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17.
• Data may be extracted without detection from improperly
configured devices.
• Viruses or other malicious code may corrupt data on a wireless
device and be introduced to a wired network connection.
• Malicious entities may be able to violate the privacy of
legitimate users and be able to track their actual movements
through GPS.
• Handheld devices are easily stolen and can reveal sensitive
information.
◼ Sensitive data may be corrupted during improper
synchronization.
DEVICE LEVEL SECURITY ISSUES
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18.
Malware - Mobile devices may contain malware. Consumers may download applications that
contain malware. Consumers download malware unknowingly because it can be disguised as a
game, security patch, utility, or other useful application. A wave of malware on Android
phones is currently affecting China and Russia, with reports suggesting these countries are
seeing a 40 percent infection rate.
Access Security - Many devices have the technical capability to support passwords, personal
identification numbers (PIN), or pattern screen locks for authentication. Some mobile devices
also include a biometric reader to scan a fingerprint for authentication. However, anecdotal
information indicates that consumers seldom employ these mechanisms. Additionally, if users
do use a password or PIN they often choose passwords or PINs that can be easily determined
or bypassed, such as 1234 or 0000. Without passwords or PINs to lock the device, there is
increased risk that stolen or lost phones' information could be accessed by unauthorized users
who could view sensitive information and misuse mobile devices.
DEVICE LEVEL SECURITY ISSUES
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19.
Operating systems may be out-of-date. Security patches or fixes for mobile devices'
operating systems are not always installed on mobile devices in a timely manner. It can take
weeks to months before security updates are provided to consumers' devices. Depending on
the nature of the vulnerability, the patching process may be complex and involve many
parties. For example, Google develops updates to fix security vulnerabilities in the Android
OS, but it is up to device manufacturers to produce a device-specific update incorporating the
vulnerability fix, which can take time if there are proprietary modifications to the device's
software. Once a manufacturer produces an update, it is up to each carrier to test it and
transmit the updates to consumers' devices. However, carriers can be delayed in providing the
updates because they need time to test whether they interfere with other aspects of the device
or the software installed on it. In addition, mobile devices that are older than two years may
not receive security updates because manufacturers may no longer support these devices.
Many manufacturers stop supporting smartphones as soon as 12 to 18 months after their
release. Such devices may face increased risk if manufacturers do not develop patches for
newly discovered vulnerabilities.
DEVICE LEVEL SECURITY ISSUES
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20.
Software on mobile devices may be out-of-date. Security
patches for third-party applications are not always
developed and released in a timely manner. In addition,
mobile third-party applications, including web browsers,
do not always notify consumers when updates are
available. Unlike traditional web browsers, mobile
browsers rarely get updates. Using outdated software
increases the risk that an attacker may exploit
vulnerabilities associated with these devices.
DEVICE LEVEL SECURITY ISSUES
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21.
eCommerce 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 realized 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 - 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. Moreover, due to their mobility and
affordability, even tablets are high in demand in India.
REASONS FOR SUCCESS OF MOBILE
COMMERCE IN INDIA (1/3)
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22.
2. 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.
3. High Offerings for Data - Mobile data tariffs in India are the cheapest in the world.
Unlike PC Internet affordability of 3G & 4G connectivity has improved significantly.
Jio has created data revolution in the Indian Telecom sector.
REASONS FOR SUCCESS OF MOBILE
COMMERCE IN INDIA (2/3)
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23.
4. Government policies - 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. Digital India & Digital Payment mechanisms are supporting payments
through m-Commerce.
5. Mobile payment partnerships - Most of the mobile service operators are having
tie-ups with leading banking service providers to provide mobile payment facilities.
For instance, Bharti Airtel and Axis Bank have a partnership for providing banking
services through the Airtel Money platform. Similarly, Idea-Vodafone India has
signed agreements with ICICI bank to launch mobile payment services. Such
collaborations and partnerships are expected to grow and will support the market to
grow.
REASONS FOR SUCCESS OF MOBILE
COMMERCE IN INDIA (3/3)
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24.
◼ Managing Director, Google India: "India adds five million new internet users
a month and all are on mobile." He believes there are 230 million internet
users out of which 130 million are mobile internet users. "Three years back
less than 2% transactions were on mobile; now half the transactions are on
mobile apps, particularly for e-commerce companies. By the end of 2020, I
see 70%-80% transactions via smartphones," he says.
◼ Companies are realizing that the mobile may soon become the most important
way to talk to customers. Many of them are in fact building a 'mobile first'
strategy, where products and services are first made available through mobiles
before they find their way into other conventional channels.
PRESENT STATUS AND FUTURE
PROSPECTS
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25.
At the other end of the spectrum are a bunch of successful companies like
MobiKwik, PayTM, Ezetap, FreeCharge that birthed all their businesses only on
mobiles.
Ezetap, which counts State Bank of India, Amazon and Myntra among its customers
sells a Rs 3,000 device which syncs up with mobile phones to complete credit and
debit card transactions. E-tailers offering cash on delivery and even Delhi traffic
cops use this device to facilitate mobile payments. "Our device is helping accelerate
use of m-commerce," says Sanjay Swamy, co-founder and chairman, Ezetap.
Ezetap bagged an order from SBI for its terminal this June. "SBI subsidizes the
device for small merchants (like kirana shops) to double up as an ATM or accept
credit cards," says Swamy.
MOBILE PAYMENTS AND MOBILE BILL
PAYMENTS
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26.
Maruti Suzuki is using the mobile to improve efficiency at service stations and
to optimize the customer experience at its showrooms. At Maruti Suzuki service
stations, service managers take down servicing service managers take down
servicing details of a car on a tablet. The information is transmitted to all
departments involved in the servicing engagement.
"This has brought down the visit time by half (from 16 minutes to eight
minutes) and the car is also returned faster after service," says Rajesh Uppal,
CIO, Maruti Suzuki. "People may not buy cars on smartphones; but customer
expectations at our dealerships or service centres are different. We have noticed
this change in expectations in the past two years and are using smart devices
wherever possible."
MOBILE TO IMPROVE CUSTOMER
EXPERIENCE
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27.
Pharma major Lupin is using mobiles to give customers the power to ensure product
authenticity. In an SMS-based authentication programme, 300 million drug packs were
printed with a unique number to authenticate the product. "We are using mobiles as an
anti-counterfeit solution to verify whether anti-counterfeit solution to verify whether a
drug is genuine," says Mayur Danait, CIO, Lupin. The company also uses 3G tablets
for its 5,000 member field force to eliminate paper work, reduce time to generate
doctor call reports (doctor's feedback on a drug), leave, expense and performance
management system.
Not all companies though are making rapid progress. "E-commerce companies and a
few private banks are moving quickly to mobile. Others like auto, pharma, FMCG will
take about a year," says Google's Anandan. "Users are less likely to download a Maggi
or a Kellog's app and more likely to go for a cab rental or m-commerce app."
MOBILE TO IMPROVE CUSTOMER
EXPERIENCE
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28.
But fast food chains are moving ahead. Globally, fast food giant McDonald's
and Starbucks are separately trying out smartphone apps that let customers place
orders and pay for it at a store or before they enter one, eliminating queues and
cashiers. Such apps will find their way into India sooner than later.
McDonald's is already planning to introduce a 'deals' app and a virtual loyalty
programme on its mobile app. Says Kedar Teny, director, marketing and digital,
McDonald's India (West and South): "Globally 25% of our business comes from
online and web ordering." This could move to smartphones now.
MOBILE TO IMPROVE CUSTOMER
EXPERIENCE
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