Market Research Report : Mobile Commerce Market in India 2012

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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 acrossIndia, in the coming years.
Although mobile commerce market inIndiais 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 reachIndia’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.

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Market Research Report : Mobile Commerce Market in India 2012

  1. 1. Mobile Commerce Market in IndiaMarch 2012
  2. 2. Executive Summary M-commerce market in India will generate around INR x1 bn revenue per annum by 20-- M-payment services in India are served largely via IVR, SMS-based solutions and mobile apps Market Volume of Mobile banking or m-banking transactions has increased by roughly x2% over 20--, to reach x3 mn in 20-- Drivers: Challenges: Rising Mobile Device Adoption and Low Penetration of Advanced Mobile Drivers & Colossal Wireless Subscriber Base Devices in Rural Areas Challenges Increase in Disposable Income and Low Awareness and Lack of Interest Economic Advancement Security and Privacy Concern Introduction and Availability of Next Generation Cellular Networks Increasing Availability of Credit Mobile WalletMarket Trends Utility Services Financial Services for Rural Consumers Major PlayersM-Commerce CanvasM Technologies Ltd. Geodesic Ltd. JiGrahak Mobility SolutionsPlayer Profile One97 Communications Ltd. OnMobile Global Ltd. Oxigen Services Pvt. Ltd. MOBILE COMMERCE MARKET IN INDIA 2012.PPT 2
  3. 3. •Introduction•Mobile Commerce Overview•Drivers & Challenges•Market Opportunity Vendor Opportunities•Market Trends•M-Commerce Player Profiles•Strategic Recommendations•Appendix MOBILE COMMERCE MARKET IN INDIA 2012.PPT 3
  4. 4. Introduction Mobile Commerce (M-Commerce) Overview •Mobile Commerce is the activity of commencing commercial transactions between both B2C and B2B entities via mobile devices It is a part of the broader, e-commerce market which accommodates any commercial transaction via internet •Increasing tendency to save time and energy, especially amongst the working population will further intensify the e-Commerce market by a large extent Mobile Commerce (m-Commerce) is a segment of Mobile Value Added Services (MVAS) •MVAS are the services provided by telecom operators directly or indirectly, beyond standard voice calls Essential Features of M-Commerce System Mobile Commerce Feature1 Feature2 Feature3 • Ideal_charecteristic1 • Ideal_charecteristic1 • Ideal_charecteristic1 • Ideal_charecteristic2 • Ideal_charecteristic2 • Ideal_charecteristic2 • Ideal_charecteristic3 • Ideal_charecteristic3 • Ideal_charecteristic3 • Ideal_charecteristic4 • Ideal_charecteristic4 • Ideal_charecteristic4 • Ideal_charecteristic5 • Ideal_charecteristic5 • Ideal_charecteristic5Source: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 4
  5. 5. Retail Ecosystem with M-Commerce Traditional Retail Supply Chain Modern Retail Supply Chain Mobile Retail Supply Chain Company/ Company/ Company/ Manufacturer Manufacturer Manufacturer Back End Front End Consumers Consumers Consumers •Traditional retail supply chain comprised of various intermediaries due to which costs increased at every level •Modern retail supply chain eliminates intermediaries, increases profitability for producers and reduces costs for consumers •Mobile retail supply chain uses m-commerce company as intermediary with optional role of intermediary1; the product and services are served to the consumers via platform1, platform2 or platform3Source: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 5
  6. 6. … m-payment and m-banking have shown significant growth over the last few years in the domestic market Market Overview – India (-/-) • Volume of Mobile banking or m-banking transactions has increased by roughly x1% over 20--, to reach x2 mn in 20-- • Penetration of mobile devices running on wireless network in rural areas of the country is still low, standing at around x3-x4% as in the end of 20-- • M-commerce companies are optimistic regarding its growth in India following Reserve Bank of India revising restriction on daily transaction via m-commerce Daily mobile transactions limit were increased from INR x5 to INR x6 for money transfers, whereas the limit was raised from INR x7 to INR x8 for goods and services • Still around x9% of consumers are not aware of the mobile transactions facilities available while z1% consumers, who are aware of m-commerce services, have serious concerns about the security offered by such solutions • M-commerce is largely leveraging on e-commerce demand across the nation and hence revenue generated by the two are often calculated collaboratively Market size of e-Commerce is estimated to grow at a dynamic growth rate of z2% to reach INR z3 tr in 20-- from INR z4 tr in 20-- Transactions via M-Banking – Growth E-Commerce - Market Size and Growth INR tr 2,000 3 +y1% 2 +y2% 1,000 1 0 0Source: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 6
  7. 7. Major MVAS Delivery Platforms for M-Commerce Services Approximate Delivery Platform Trends Applications Cost • X% of MVAS services are via Y INR xx/unit • Caters to a wide audience as XX • AAAAAAAAAAAAAAAAAAAAAAA services are available even on low- end handsets • Strong growth expected due to YY INR X/min mass appeal and ease of usage • BBBBBBBBBBBBBBBBBBBBBBBBBBBBB • Available in various XX • Directed towards consumers using INR A/month for technologically advanced handsets ZZ • CCCCCCCCCCCCCCCCCCCCCCCCCCCCCC usage • Growth in X mobile phones is expected to boost demand • Platform where interaction is in the AA INR B/ month form of a continuous session as • DDDDDDDDDDDDDDDDDDDDDDD opposed to an X • XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 7
  8. 8. Mobile Commerce Value Chain AAA BBB CCCC WWW SDDD IIII GGG FFFF EEE HHHHSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 8
  9. 9. A comparison between the demand and supply side of m-commerce system M-Commerce Consumers M-Commerce Service Providers (Demand Side) (Supply Side) Objectives • AAAAAAAAAAAAAAAAAAA Objectives M-Commerce Platform • AAAAAAAAAAAAAA Requirements• AAAAAA Requirements • BBBBBBBBBBBBBSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 9
  10. 10. SWOT Analysis of M-Commerce Market in India Strengths Weaknesses • Strength1 • Weakness1 • Strength2 • Weakness2 • Strength3 • Weakness3 • Strength4 • Weakness4 SWOT Analysis Opportunities Threats • Opportunity1 • Threat1 • Opportunity2 • Threat2 • Opportunity3 • Threat3 • Opportunity4 • Threat4Source: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 10
  11. 11. Drivers & Challenges – Summary Drivers Rising Mobile Device Adoption and Colossal Wireless Subscriber Base Increase in Disposable Income and Economic Advancement Challenges Introduction and Availability of Next Low Penetration of Advanced Mobile Generation Cellular Networks Devices in Rural Areas Increasing Availability of Credit Low Awareness and Lack of Interest Soaring Enterprise Mobility Security and Privacy Concern Changing Demographics and Consumer Behaviour Growing Demand for Rich Digital Contents MOBILE COMMERCE MARKET IN INDIA 2012.PPT 11
  12. 12. Market Opportunity - Potential Verticals (-/-) • Mobile commerce can cater to various services of different verticals • M-commerce not only ensures enhanced exposure for variety of products but also maximum reach due to the presence of mammoth wireless subscriber base in the country • Sector1 consists of segmentx1, segmentx2, segmentx3, segmentx4 and segmentx5 • Market size of the sector can be presented in the combined form of INR x1 tr and x2 mn unit consumption per Sector1 annum as of 20-- • MVAS can be implemented by processx1, benefitx1, usagex1 and applicationx1 • Sector1 consists of segmenty1, segmenty2, segmenty3, segmenty4 and segmenty5 • Market size of the sector can be presented in the combined form of INR y1 tr and y2 mn unit consumption per Sector2 annum as of 20-- • MVAS can be implemented by processy1, benefity1, usagey1 and applicationy1 • Sector1 consists of segmentz1, segmentz2, segmentz3, segmentz4 and segmentz5 • Market size of the sector can be presented in the combined form of INR z1 tr and z mn unit consumption per Sector3 annum as of 20-- • MVAS can be implemented by processz1, benefitz1, usagez1 and applicationz1Source: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 12
  13. 13. Vendor Opportunities – Prospective Areas (-/-) Area1 • Area1 hold the third largest share in 20-- as it was worth INR x1 bn and accounted for x2% of the overall e-Commerce market in India but is predicted to have higher share when it comes to m-commerce • Advancement in the BFSI sector has resulted in rapid computerization and immense involvement of IT infrastructure Modernization and technological development in the sector has led to the emergence of net banking and other online transaction concepts tremendously Currently, all financial organizations and institutions in India support and encourages the use of internet for their day to day operations Majority of the nationalized banks in India currently supports online banking which in turn further fuels growth in the market • The segment is expected to attain a CAGR of x3% to reach INR x4 bn in 20-- from INR x5 bn in 20-- Area1 -Growth Area1 -Segments INR bn Area1 30 +y1% 20 10 0Source: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 13
  14. 14. Market Trends Introduction of • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa Biometrics in Trend1 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb Education • ccccccccccccccccccccccccccccccccccccccccccccccccccccc Biometric ID Cards • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa for Public Trend2 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb Transportation • ccccccccccccccccccccccccccccccccccccccccccccccccccccc Biometrics • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa Application in Trend3 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb Customs • ccccccccccccccccccccccccccccccccccccccccccccccccccccc • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa Trend4 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb • cccccccccccccccccccccccccccccccccccccccccccccccccccccSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 14
  15. 15. Public: Domestic Company – Company1 (-/-) Company Information Offices and Centres – India Adress line1 Corporate Address Adress line2 City. Country Tel No. +91- --- - ----- City Name Fax No. ++91- --- - ----- Website www.------.com Year of Incorporation 19-- Ticker Symbol ------ Stock Exchange Exchange1 Head Office Products and Services Category Products/Services Key People • Utility VAS Solution Name Designation • M-Commerce Solution MVAS Products • Mobile App development Mr. X Chief Executive Officer • Digital Asset Management Mr. Y Chief Financial Officer Mr. Z Chief Operating OfficerSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 15
  16. 16. Public: Domestic Company – Company1 (-/-) Financial Snapshot Key Ratios Revenue Profit y-o-y change Total Income Net Profit/Loss Particulars 2011 2010 2009 2008 INR mn INR mn (2011-10) c4 Profitability Ratios 150 8 Operating Margin 2.23 0.74% -1.49% -9.59% -10.70% c2 c3 6 100 Net Margin -34.74 -35.26% -0.51% 1.00% -37.12% c1 4 Profit Before Tax Margin -53.05 -53.57% -0.51% -25.32% -12.44% 50 Return on Equity -10.93 -11.06% -0.14% 0.21% -5.79% 2 Return on Capital Employed 0.18 0.06% -0.12% -0.55% -0.48% 0 0 Return on Working Capital 78.72 77.98% -0.74% 0.18% -3.99% 20-- 20-- 20-- 20-- Return on Assets -2.26 -2.29% -0.04% 0.05% -1.56% Return on Fixed Assets -2.88 -2.94% -0.06% 0.09% -2.98% Financial Summary Cost Ratios • The company incurred a net profit of INR a1 mn in FY 20--, as Operating costs (% of Sales) -2.95 99.22% 102.16% 112.14% 113.76% compared to net profit of INR a2 mn in FY 20-- Administration costs (% of 1.04 18.03% 17.00% 15.75% 18.00% Sales) • The company reported total income of INR a3 mn in FY 20--, Interest costs (% of Sales) 20.57 63.33% 42.77% 45.59% 29.69% registering an increase of a4 per cent over FY 20-- Liquidity Ratios • The company earned an operating margin of a5 per cent in FY 20--, Current Ratio -54.82% 0.82 1.81 4.42 7.13 an decrease of a6 percentage points over FY 20-- Cash Ratio -96.41% 0.19 5.34 2.99 5.66 • The company reported debt to equity ratio of a7 in FY 20--, an Leverage Ratios increase of a8 per cent over FY 20-- Debt to Equity Ratio 45.86% 3.82 2.62 2.92 2.72 Debt to Capital Ratio 6.85% 0.75 0.70 0.72 0.71 Key Financial Performance Indicators Interest Coverage Ratio 124.52% 0.01 -0.05 -0.27 -0.46 Indicators Value (--/--/20--) Efficiency Ratios Market Capitalization (INR mn) 10,985 Fixed Asset Turnover -9.25% 0.08 0.09 0.07 0.06 Asset Turnover 18.69% 0.06 0.05 0.04 0.03 Total Enterprise Value (INR mn) 87,544 Current Asset Turnover 5.19% 0.47 0.45 0.11 0.07 EPS (INR) 48.39 Working Capital Turnover -308.15% -2.08 1.00 0.14 0.08 PE Ratio (Absolute) 66.9 Capital Employed Turnover 58.09% 0.29 0.19 0.16 0.12Source: Improved Decline MOBILE COMMERCE MARKET IN INDIA 2012.PPT 16
  17. 17. Public: Domestic Company – Company1 (-/-) Key Business Segments Key Geographic Segments Product1 Product2 Product3 India Outside India 100% 100% 50% 50% 0% 0% 20-- 20-- 20-- 20-- 20-- 20-- 20-- 20-- Key Information Description Details • aaaaaaaaaa Overview • bbbbbbbbb • ccccccccccc • It offers products in the areas of m-commerce, entertainment, media portals and interactive television programming, mobile marketing, user-generated content and social networking, mobile utility, data and Extended Product 3G, and information and network through mobile access channels, such as voice, SMS, WAP, USSD, voice, Portfolio video, on-device portal, and Web • Music products comprising Ring Back Tones (RBT), M-radio, reverse RBTs, devotional songsSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 17
  18. 18. Private: Domestic Company – Company2 (-/-) Company Information Offices and Centres – India Adress line1 Corporate Address Adress line2 City. Country Tel No. +91- --- - ----- City Name Fax No. ++91- --- - ----- Website www.------.com Year of Incorporation 19-- Ticker Symbol ------ Stock Exchange Exchange1 Head Office Products and Services Category Products/Services Key People • Infotainment Services Name Designation • Mobile Media Contents MVAS Products • Mobile Voice Solutions Chief Executive Officer and Chief Mr. X • Call Management Solutions Operations Officer Mr. Y President of Sales and MarketingSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 18
  19. 19. Private: Domestic Company – Company2 (-/-) Financial Snapshot Key Ratios y-o-y change Particulars 2011 2010 2009 2008 Revenue (2010-09) Revenue Profit / Loss Profit Profitability Ratios INR mn INR mn Operating Margin -5.75 59.76% 65.51% 75.51% 84.64% 2,467,384.52,500,000 2,248,457.8 1,000,000 Net Margin -0.65 20.94% 21.58% 35.03% 43.42% 1,865,274.2 Profit Before Tax Margin 4.60 27.02% 22.41% 37.00% 46.07%2,000,000 800,000 Return on Equity -0.44 16.63% 17.07% 44.01% 30.53%1,500,000 600,000 Return on Capital Employed -3.04 57.06% 60.09% 121.39% 108.12%1,000,000 770,874.4 400,000 Return on Working Capital -12.19 22.76% 34.95% 62.37% 51.28% Return on Assets -0.41 16.59% 16.99% 43.60% 30.45% 500,000 200,000 Return on Fixed Assets 14.16 93.08% 78.92% 166.10% 98.92% 0 0 Cost Ratios 2008 2009 2010 2011 Operating costs (% of Sales) 5.58 36.86% 31.28% 22.96% 11.18% Administration costs (% of -3.68 14.87% 18.56% 18.79% 21.10% Financial Summary Sales) Interest costs (% of Sales) -0.01 0.04% 0.05% 0.00% 0.18% • The company incurred a net profit of INR 470,723 mn in Liquidity Ratios Current Ratio 19.05% 5.28 4.44 4.10 2.32 FY 2011, as compared to net profit of INR 402,544 mn in Cash Ratio -19.59% 2.29 2.85 1.75 1.04 FY 2010 Leverage Ratios • The company reported total income of INR 2,248,458 mn Debt to Equity Ratio N.A. N.A. N.A. N.A. N.A. Debt to Capital Ratio N.A. N.A. N.A. N.A. N.A. in FY 2011, registering an increase of 20.5 per cent over Interest Coverage Ratio 25.57% 1791.20 1426.42 #DIV/0! 488.03 FY 2010 Efficiency Ratios • The company earned an operating margin of 59.8 per Fixed Asset Turnover 20.70% 4.21 3.49 4.65 2.17 Asset Turnover -0.12% 0.75 0.75 1.22 0.67 cent in FY 2011, a decrease of 5.8 percentage points over Current Asset Turnover -30.24% 0.83 1.20 1.32 0.64 FY 2010 Working Capital Turnover -33.35% 1.03 1.54 1.75 1.13 Capital Employed Turnover -0.31% 0.75 0.75 1.23 0.67Source: Improved Decline MOBILE COMMERCE MARKET IN INDIA 2012.PPT 19
  20. 20. Private: Domestic Company – Company2 (-/-) Key Information Description Details • Company2 is a mobile media company which offers solutions for discovery, branding and revenue generation on the mobile platform Overview • It caters to content destination management, mobile content creation, aggregation and mobile marketing • It offers M-commerce solutions via SMS including contests, notifications, special offers, alerts, WAP links, WAP portal development, mobile advertising, and content management and distribution Extended Product • Its MVAS consultancy and support services include concept and ideation for brand Portfolio awareness, higher reach, lead generation, engagement, sales, interactivity, targeted reach, and content delivery • It also offers mobile online and offline games as direct consumer MVAS productSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 20
  21. 21. Strategic Recommendations (-/-) • aaaaaaaaaaaaaaaaaaaaa • bbbbbbbbbbbbbbbbbbbbb Strategic Recommendation1 • aaaaaaaaaa • bbbbbbbb • ccccccccc Strategic Recommendation2 • aaaaaaaaaa • bbbbbbbb • cccccccccSource: MOBILE COMMERCE MARKET IN INDIA 2012.PPT 21
  22. 22. Thank you for the attentionThe Mobile Commerce Market in India report is a part of Netscribes’ TelecommunicationSeries. For more detailed information or customized research requirements please contact:Kalyan BangaE-Mail: sales@netscribes.comNetscribes (India) Pvt. Ltd. is dedicated to disseminating information and providing quick insights on “hot” industries in India and otheremerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business &corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base.Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Netscribes (India) Pvt. Ltd. or “Netscribes” isnot responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is requiredfor guidelines on reproduction. MOBILE COMMERCE MARKET IN INDIA 2012.PPT 22

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