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1. International Journal of Technical Research(IJTR)
Vol 1, Issue 2, Nov-Dec 2012
ISSN 2278-5787 Page 32
M-COMMERCE AND ITS GROWTH: AN ANALYSIS
Ms. Seema Grewal
Lecturer, D.N.P.G College,Hisar
seema76544@gmail.com
Abstract--Driven by a widespread understanding of the
Internet's capabilities, the power of electronic commerce,
and advances in wireless technologies and devices, mobile
commerce (m-commerce) is rapidly approaching the
business forefront. Mobile commerce well known as M-
commerce is the subset of E-commerce which includes all E-
commerce transactions by using hand-held devices (a mobile
handset (cell phone), PDA, Smartphone and other emerging
mobile equipment.) and wireless network. It is the next
generation wireless e-commerce that needs no wire and
plug-in devices. It is gaining increasing acceptance amongst
various sections of the society. The need for mobility seems
to be a primary driving force behind M-Commerce
applications such as Mobile Banking, Mobile Entertainment
and Mobile Marketing etc. As the Internet started to
proliferate in many parts of the world, the mobile phone
penetration in terms of voice communication and online
commerce started to grow rapidly. This simultaneous rapid
growth has caused a new phenomenon of convergence of
Internet computing and mobile communication where M-
commerce has its root. The m-commerce industry is
predicted to have huge growth, and we are now experiencing
the second wave of m-commerce born out of consumer
expectations and convenience. Use of mobile phone has
increased so much that it is not just a device to make calls,
but an important medium to fulfill all the financial needs for
friends and family. Now, mobile phone technology has made
another leapfrog to pave its way for a new trend called
mobile commerce where the financial transactions are made
using mobile devices.
Keywords--M-commerce, E-commerce, Mobile phones,
Banking and Technology
1. INTRODUCTION
M-Commerce is a by-product of the technology convergence
of Information Technology (IT) with the telecommunication
technologies (TCT), which is jointly referred to as
Information and Communication Technologies (ICT). M-
Commerce may be thus regarded as an extension of
Electronic Commerce (E-Commerce) to wireless mediums.
This convergence, however, enables some unique, location-
based services, which is not possible in E-Commerce. These
innovative services are made possible by the convergence of
these two technologies. Today, the scope of M-Commerce
encompasses almost every walk of life. Mobile services are
reported from the fields of content, entertainment, travel,
banking and marketing. After the internet revolution the
mobile revolution is all set to sweep the Indian soil. This
concept has guided the Indian business world to shift their
focus towards the ignored rural markets. There is
tremendous opportunity for mobile technologies based
business models to explore the market around the rural poor,
and translate it into a business opportunity to serve around
75 million rural population in the country. Unlike the e-
commerce based business models, mobile technology based
businesses can overcome barriers of literacy, availability and
cost. The new mobile devices are feature rich and user
friendly so as to enable an illiterate to operate. M-commerce
is difficult to define and can be interpreted in a variety of
ways. This is because M-commerce is a fairly new
phenomenon and several definitions of it exist. M-commerce
can be defined as “all activities related to a (potential)
commercial transaction conducted through communication
networks that interface with wireless devices”. Another
definition of M-commerce is “the use of wireless device to
communicate, interact, and transact via high speed
communication to the internet’’ (Shuster, 2001, p. 2).
Angsana (2002) emphasizes on three elements of M-
commerce – a range of activities, devices, and network types
– and defines M-commerce as “all electronic transactions
(e.g., communication interaction, purchase, payment) that
use data-enabled wireless device connection to the internet
or to a vendor’s private network”
2. M-COMMERCE
Mobile Commerce is the use of information technologies
and communication technologies for the purpose of mobile
integration of different value chains a business processes,
and for the purpose of management of business
relationships. It is also said that it is the next generation
wireless e-commerce that needs no wire and plug-in devices.
Mobile commerce in which user can do any sort of
transaction including buying and selling of the goods, asking
any services, transferring the ownership or rights, transacting
and transferring the money by accessing wireless internet
service on the mobile handset itself.

2. International Journal of Technical Research(IJTR)
Vol 1, Issue 2, Nov-Dec 2012
ISSN 2278-5787 Page 33
Presuming its wide potential reach all major mobile handset
manufacturing companies are making WAP enabled smart
phones and providing the maximum wireless internet and
web facilities covering personal, official and commerce
requirement to pave the way of m-commerce that would
later be very fruitful for them. Basically m-commerce is like
e-commerce except m-commerce transactions typically take
place through a mobile Web page or a text message. These
can show up as barcodes on mobile phones. It involves new
technologies, services and business models. It is quite
different from traditional e-Commerce. Mobile phones
impose very different constraints than desktop computers.
But they also open the door to a slew of new applications
and services. They follow you wherever you go, making it
possible to look for a nearby restaurant, stay in touch with
colleagues, or pay for items at a store. M-commerce (mobile
commerce) is the buying and selling of goods and services
through wireless handheld devices such as cellular
telephone and personal digital assistants (PDAs). Known as
next-generation e-commerce, m-commerce enables users to
access the Internet without needing to find a place to plug in.
Wireless Application Protocol (WAP) is the emerging
technology behind m-commerce.
3. DEVICES USED IN M-COMMERCE
M-commerce is not just about using mobile phones as end
user devices. The following list gives an overview of
different kinds of mobile devices.
 Mobile phone
 PDA (Personal Digital Assistant)
 Smart phone-the smart phone combines mobile
phone and PDA technology into one device.
 Laptop
 Earpiece (as part of a personal area network)
4. MERITS OF M-COMMERCE
1. Mobility- as users can carry their cell phones or other
mobile devices easily.
2. Broad reaches ability/ Ubiquitous computing- people
can be contacted anywhere and at any time. It is also
convenient and provides instant connectivity.
3. Ubiquity-information can be accessed easily and in a
real-time environment.
4. Convenience-as the devices facilitates storage of data
and has Internet, intranet, extranet connections so it is
convenient.
5. Localization of products and services-knowing where
the user is located at any given time.
6. Very personal-Device owner has an exclusive access to
the contents/services and the service providers keeps the
identity of the owner.
7. Varied users-Elementary school students, grandpas,
grandmas are the varied users that uses m-commerce
and from varied location.
8. Ambidextrous -Work & Play: Business purpose +
Personal fun.
9. Willingness-People seem willing to pay for mobile
services
5. DEMERITS OF M-COMMERCE
1. Small screens of most devices still limit types of file and
data transfer (i.e. streaming videos, etc.)
2. Standards guiding applications and technology
development and connection(s)
3. WAP and SMS limited to small number of characters
and text.
4. Use of graphics limited
5. Less functionality for mobile Internet over mobile
phones and existing generation of handhelds than for
mobile computers (laptops and next generation
handhelds)
6. Consumers fear for their privacy.
7. Easier for information to get stolen.
8. It has taken a while for businesses/consumers to accept
m-commerce
9. It prevents face-to-face customer service. (less personal)
10. Not all cell phones are capable of m-commerce yet.
(new technology)
11. User interface is often difficult to learn how to use
12. Limited bandwidth
13. Cost of establishing mobile and wireless broadband
infrastructure
6. FUTURE OF M-COMMERCE IN INDIA
The mobile service charges are at an all time low in India
compared to the world, enabling even the low-income
groups to own and operate mobile phone. Pro-active rather
than reactive public policy and regulatory initiatives are
needed in India to fully utilize the opportunities offered by
mobile technologies and facilitate an exponential growth of
this sector. Mobile Commerce is the activity of commencing
commercial transactions between both B2C and B2B entities
via mobile devices. Indian retail market has experienced
high growth over the last decade with a gradual shift towards
modern retailing formats. With growing numbers of mobile
devices and mammoth wireless subscriber base, the focus is
slowly shifting to mobile platforms. Leveraging on enhanced
reach like MVAS and diverse features like of e-commerce,
m-commerce is poised for greater adoption across India, in
the coming years. Although mobile commerce market in

3. International Journal of Technical Research(IJTR)
Vol 1, Issue 2, Nov-Dec 2012
ISSN 2278-5787 Page 34
India is in nascent stage, m-payment and m-banking
segments have shown significant growth over the last few
years. Initiative taken by the government and financial
organizations to reach India’s un-banked population can
ensure tremendous growth in the latter segments. There are
around 600,000 territories that require banking facilities but
only around 89,000 bank branches are there in the country.
As a vast segment of the Indian population who neither had
a landline nor a bank account today have made a generation
leap and not only do they own a mobile handset, but are also
slowly attempting to transact on their mobile phone. With
this reality, the estimated market size of the m- commerce in
the country is pegged to be around 400 crore. The total
potential revenue opportunity through mobile commerce can
reach 20 billion in 2015, according to the IAMAI 2011
survey and this is only the beginning. So, clearly mobile
commerce has rapidly emerged as a major growth area for
mobile operators. Kalyan Banga, manager, product
development, Net scribes India says, “Although mobile
commerce market in India is in nascent stage, m-payment
and m-banking segments have shown significant growth
over the last few years. Initiatives taken by the government
and financial organizations to reach India's unbanked
population can ensure tremendous growth in the latter
segments.”
M-commerce in India is primarily dependent on network
operators who can effectively enhance and advance the
usage of its services, which has resulted in collaboration and
partnership models in domains like banks and telecom
operators and technology provider. The market expansion in
this domain has to be nurtured, offering a wide scope in
increasing revenue for m-commerce players and telecom
operators. Although m-commerce market in India is still in
its initial phase, but with the growth of Smartphone’s,
tablets, and mobile devices, m-commerce has started to gain
importance in the digital marketplace. Mobile phone
penetration in India is more than 60% and is expected to be
over 90% by 2015.Over the last few years, services like m-
banking, m-trading, and m-shopping segments have shown
significant growth. A recent study shows that 45% of smart
phone owners and 53% of tablet owners plan to purchase
more products on their handheld devices in the future,
predicting a huge opportunity for the service in the country.
7. FUTURE CHALLENGES IN INDIA
The major challenges in implementing M-commerce in India
is that the players in the m-commerce field like mcheck,
obopay, paymate etc. need users to link one of their banking
instruments like the credit card, debit card, bank account to
their mobile phone with the help of software installed on
phone and the common man is not willing to share such
information on the phone as he still think that his
information can be hacked. No doubt it is a big leap in India
but from the security point, it is still at its development
stage. Service providers use WAP and SMS as the medium
for providing services like facilitating people to pay through
their mobile phones. But these services has not reached its
peak as the service providers are unable to link with the
banks also the common people do not agree in sharing their
credit/debit card information. Also GSM services can
provide a secure connection using personal identification
number (PIN),
TRAI(Telephone Regulatory Authority of India), guidelines
had made mandatory for every service provider to identify
customers and this policy is similar to that of opening an
account and getting a debit card in turn making telecom
companies bank rather than the other way round. If a person
starts using his phone as debit card for buying vegetables
and other stuffs the daily banking transaction will
significantly be reduced.
According to the TRAI guidelines the telecom
companies have to pay 6% of annual gross revenue as
license fees to register as Value Added Service providers,
Bank is charging 2-4% from the them and the merchants are
not ready to pay them 7-8% for the services they provide. In
compliance to TRAI norms RBI norms are much simpler in
handling fraud transactions and banking. The solution of this
problem is that to build a MVAS(mobile value added
services), application that can be charged to from the user
account for providing the service. The 2.1.3(iv), TRAI riles
clearly states that the RBI guidelines need to be followed by
the telecom companies.
8. INDUSTRIES AFFECTED BY M-COMMERCE
As content delivery over wireless devices becomes faster,
more secure, and scalable, there is wide speculation that m-
commerce will surpass wire line e-commerce as the method
of choice for digital commerce transactions. The industries
affected by m-commerce include:
 Financial services, which includes mobile banking
(when customers use their handheld devices to
access their accounts and pay their bills) as well as
brokerage services, in which stock quotes can be
displayed and trading conducted from the same
handheld device
 Telecommunications, in which service changes, bill
payment and account reviews can all be conducted
from the same handheld device
 Service/retail, as consumers are given the ability to
place and pay for orders on-the-fly
 Information services, which include the delivery of
financial news, sports figures and traffic updates to
a single mobile device
9. CONCLUSION

4. International Journal of Technical Research(IJTR)
Vol 1, Issue 2, Nov-Dec 2012
ISSN 2278-5787 Page 35
In few years from now the mobile commerce will become
more secured as the cell phone companies are spending more
to protect their customers and also their information from
intrusions and hacking. Mobile commerce has gain a huge
popularity but still it is in its initial phase and can be further
expand to different fields and also can play a huge role in
effecting human life. Its future seems to be extremely safe
and bright and its upgraded version will emerge as the leader
in the 4G technological version. So we can conclude with
this that the future is here and we need to accept it with both
hands. Remember, any M-Commerce strategy should be an
integrated part of a larger strategy. Customers have an
expectation of a consistent experience regardless of which
entry point they access your products and services through,
be it online, the phone, or a physical store. As a business
owner your approach to M-Commerce should be to test
frequently and often, learn quickly, and scale appropriately.
Though M-Commerce is a relatively new space, being
proactive by exploring and learning now will help in
growing your business effectively and afford you the
opportunity to stay one step ahead of your competitors. With
the explosion of smart phones, 3G services and the adoption
of unlimited data service plans, business owners now have
the opportunity to easily connect with their customers in real
time whenever and wherever they might be.
REFERENCES
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disadvantages_of_mobile_commerce.
3. M-commerce: The Next Big Hope!
http://voicendata.ciol.com/content/top_stories/112050906.asp.
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http://www.imediaconnection.in/article/806/Research/mobile-
commerce-in-india-buzzcitys-report.html.
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http://www.articlesbase.com/ecommerce-articles/mcommerce-and-its-
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http://searchmobilecomputing.techtarget.com/definition/m-commerce.