Future Insight:
Mobile Commerce
in Japan
Mobile Copenhagen 2009
June 16, 2009
Christopher Billich

What I will talk
about in the
next 30 minutes

Why the Mobile Web
is huge in Japan
Some interesting
Statistics
Mobile Shopping
via Browser
Mobile Shopping
via NFC

What I won’t talk about

daddytypes.com

I work for a company called

based

somewhere around here
nasa.gov

The
Shameless
Advertising
Part
which works for companies like

The
Shameless
Advertising
Part

The
Shameless
Advertising
Part
Who all want to know
One Thing:

The
Shameless
Advertising
Part
“How can we apply
what already works in Japan
in our mobile market?”

“Wheel” [(h)w ēl]
circular object rotating on an axle
need not reinvent

Why look for answers in Japan?

“It’s when a
technology
becomes
normal, then
ubiquitous, and
finally
so pervasive it’s
invisible,
that the really
profound changes
happen [...].”

108 million
mobile subscribers

9 in 10 use the
Mobile Web

...and they use it lots
Mobile Web Usage Frequency, 16-24 year-old users
“At least daily”: 90%
“More than an hour daily”: 61%
24%
22%
15% 16%
13%
4%
3%
>3 hrs 2-3 hrs 1-2 hrs 30 min-1 hr Daily, <30 min Less than daily I don’t
Source: Infinita, April 2008

Why that is
istockphoto.com

Operators: benevolent dictators

High-Spec Handsets

No device fragmentation

Unwalled Gardens

Revenue share
favoring content
providers
istockphoto.com

Content Provider Revenue Share
30-50%
Carrier X
70%
Android
70%
iPhone
70%
Nokia
90%

0 ,- -
¥ Messaging is
(almost) free
istockphoto.com

...yet extremely
rich:
10,000 characters
Mobile PC
Multiple Links
Emoticons
Attachments

Almost everyoneon 3G
4 in 5 of them on 3G

40% of mobile data users
on data flat rate plans
istockphoto.com

The
Low Entry Barrier
Gym Membership
Pricing Model

The Secret Sauce
Key differences to other markets
Same cost for Flat rate data
User Experience Level >90% 3G
on- and off- with “free” penetration
deck access messaging
Operators
Operators
Operator-Handset Maker control All handsets pay handset
Relationship Level handset SIM-locked makers
makers
Operator
Operator Business Model Email, not revenue (Open)
Level SMS share favors standards
CPs
Regulatory/Government Competition on network technologies
Level
No spectrum license costs

Market Volume 3.06
Mobile Commerce and Auctions (US$ billion)
1.79
Auctions
Transactions
Services
Goods
6.23
1.85
1.55 1.34
1.30 1.23
3.39
1.11 9.17
1.12 2.71
0.89 1.93
1.65 4.44
2.58 3.29
1.54
2005 2006 2007 2008 2011
Source: Mobile Content Forum (2005-2007), Infinita (2008 est.; 2011 est.)

Mobile Commerce User Behavior
Usage and Usage Intention
Active Usage
Very interested
Interested
4% Undecided
Not really interested
Definitely not interested
29% Don’t know
34%
1%
4%
17% 11%
Source: impress R&D, 2008 (Mobile Internet Users, N=3,178)

Mobile Commerce User Behavior
Usage by Demographic
Male Users Female Users
No
Yes
62 64 64 64 63
71 71 69 74
79 82
91 92
38 36 36 36 37
29 30 31
26
21 18
9 8
Total 10s 20ies 30ies 40ies 50ies 60ies 10s 20ies 30ies 40ies 50ies 60ies
Source: impress R&D, 2008 (Mobile Internet Users, N=3,178), in %

Mobile Commerce User Behavior
Preference Criteria
Trustworthiness 63.1
Ease of purchase 60.3
Loading speed 59.9
Convenience 54.8
Ease of reaching products page 49.4
Ease of comparing products 41.0
Degree of information detail 33.3
Quality of product search 27.9
Design 22.8
Ease of registration 22.4
Source: IMJ Mobile, 2008 (Active Mobile Shopping Users, N=312), in%, multiple answers

Mobile Commerce User Behavior
Payment Preferences
Cash on Delivery 65.0
Credit Card 49.4
Pay at Convenience Store 36.1
Bank Transfer 22.6
Postal Transfer 20.5
via Mobile Phone Bill 6.3
Source: impress R&D, 2006 (Active Mobile Shopping Users, N=795), in%, multiple answers

Mobile Commerce User Behavior
Product Categories
Fashion 39.5
Books, Magazines 35.7
CD, DVD 30.3
Cosmetics 22.4
Foods 20.6
Travel, Accomodation 14.8
Furniture, Design Goods 13.7
Health Goods 13.4
PC-related 12.4
Games 11.4
Source: impress R&D, 2008 (Active Mobile Shopping Users, N=927) in%, multiple answers

Mobile Commerce User Behavior
Spend per Year (in US$)
up to 29
30-49
50-99
5% 1% 12% 100-299
9% 300-499
500-999
1,000-2,999
3,000-4,999
11% 15% 5,000+
24% 20%
Source: impress R&D, 2008 (Active Mobile Shopping Users, N=927)

Mobile Commerce User Behavior
Usage Frequency
Not at all
Once a year
2-4 times/yr.
10% 5-9 times/yr.
2% 16% 10-19 times/yr.
More than 20 times
8% Don’t know
11%
17% 37%
Source: impress R&D, 2008 (Active Mobile Users, N=927)

Mobile Commerce User Behavior
Average Spend per Year by Reference Group (in US$)
2007
2008
411
205
89 103
77 81
Mobile Users Mobile Data Users Mobile Shoppers
Sources: impress R&D, 2008/2007; Mobile Content Forum 2007; Infinita 2008 (est.); includes Auctions

Product Recognition
Camera! ER Search

Product Recognition
Camera! ER Search

Operator/Retailer Collaboration
au Shopping

Shopping for Labor
Otetsudai Networks

Luxury Goods meet Manga on Mobile
Louie Vuitton

Love Soap and Runway Shows
Girlswalker/Tokyo Girls Collection

Mobile TV with Built-in Shopping
1seg

Mobile NFC
Enabled: 73%
Usage: 18%
Source: impress R&D, September 2008
Base: All Respondents, N= 3,178 (2008)

Payment
(Prepaid & Credit)

Coupons/CRM

Flight Check-in

:
“Lifestyle Infrastructure”

a.k.a.

Glued to the screen 24/7.

The second-best
screen to be glued to:

Check out www.infinita.tv
(it’s completely free)

Thank you!
billich@infinita.co.jp