International Journal of Applied Research

Volume 2, 2013, Page 1 - 24

E-COMMERCE VS MOBILE COMMERECE

Prof. Dr. Badar Alam Iqbal,

Former Dean and Chairman, Department of Commerce, Aligarh Mulsim
University ALIGARH: 202002 (UP) India
badar.iqbal@fulbrightmail.org
Abstract

In 21st Century in which we all are living technology is become a necessity and
therefore, its application in business and commerce are not a matter of choice but a
matter of compulsion. This is why the global competition could be faced with the five vital
components namely quality, cost, convenience, communication and time could be
attainable if we make transactions electronically. These five facets are also of paramount
significance when we have to face stiff and throat cutting competition.

The seeds of the trends, issues and challenges now taking hold in Ecommerce
and mobile commerce were infused or injected into business during early days, long
before the shakeout began. Today, as the dust settles, are those trends, issues and
challenges have come up to show clearly toward the future of Ecommerce transforming
into Mobile Commerce. The emerging trends, issues and challenges in Ecommerce
include- multi-channel retailing; more satisfied users; users doing own things; losing out
the mid-size E-tailer; losing human relations; and more profits.

The emerging economies known as BRICS countries namely-Brazil; Russia;

India; China and South Africa have come out with online merchants incredible growth
potential and opportunities, but also challenges when it come to developing specific local
payment plans.

Will it be possible that Ecommerce business thrive in a Mcommerce era? This is a

million dollars question to answer. Ecommerce revolutionized traditional commerce. The
desktop computers have liberated the users or consumers from the need to visit a retail
outlet. Transaction through desktop computer looks more like a restriction than liberation.
Hence, now next and much improved stage of Ecommerce has emerged out known as
“commerce everywhere”. Handheld devices that can access the internet are
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revolutionizing E-commerce further. Today we are transacting through mobiles which is

called ‘Mcommerce.’. There is a possibility that in coming years Mcommerce become
less attractive hen some improved devise may come up.

Key Words:

Ecommerce, Business, Traditional commerce, Mobile commerce, technologies,

electronic data.

INTRODUCTION

Due to continued technological innovations, the world had seen drastic changes in
almost every sphere of life. The advent of Internet-based electronic commerce over the
past decade or so has given businesses an unprecedented marketing opportunity. Brick
and mortar businesses can find it difficult to compete with web-based businesses
because the latter usually have lower operating costs and greater flexibility
(www.investopedia.com; 2011).As the Internet-using population has grown, so too has
the potential market size for any business that sets up a shop on the Web (Steinfield, C.;
2002).

With the advent of each new day, new technologies were developed in the wake
to make life easier. This development resulted in the transformation of the world from e-
commerce to m-commerce. The reasons for these developments can be traced back
mainly to technology innovations, like faster data transmission technologies and better
mobile devices equipped with improved computing capacity, enhanced data storage and
better user-interface. Some other factors, like the increasing penetration of society by
mobile phones and the integration of world economies have also increased the need for
mobility. The high availability of mobile Introduction phones, which is greater than that of
computers in most countries, is leading to concepts of new, innovative mobile services,
collectively described as m-commerce.

TRADITIONAL COMMERCE

Traditional commerce can broadly be defined as the exchange of valuable objects

or services between at least two parties. Such activity includes all of the processes that
each party undertakes to complete the transaction. The earliest form of traditional
commerce is the barter system. A traditional "street-side" business that deals with its

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customers face-to-face in an office or store that the business owns or rents. Henceforth,
all the components in traditional commerce are physical.

The activities which most businesses engage in as they conduct commerce are
called business processes. Classic business processes include:

• transferring money and information

• placing of orders for products

• sending of invoices to consumers

• delivery of goods. (www.londoninternational.ac.uk, 2011)

In short, traditional commerce means communicating (ordering, paying) with customer

and supplier using different applications in many time-consuming different steps
(www.thalys.gr, 2011).

E-COMMERCE

Commerce has a long tradition of profiting from innovative systems and tools. As
technologies emerge, successful businesses are quick to identify developing
opportunities and expand their commercial capabilities. Conducting commerce
electronically is no different. For many businesses, new technologies that digitally
exchange text and monetary information are effective tools to serve traditional business
goals of streamlining services, developing new markets, and creating innovative
business opportunities. In addition, they offer the potential to develop types of services
that are so innovative and distinct from tradition that they define a new type of
commerce. Appropriately named, electronic commerce (E-Commerce) is the synthesis of
traditional business practices with computer, information and communication
technologies. (www.orlandowebdevelopment.com, 2011)

Although there are many definitions and explanations of e-commerce, the following
definition provides a clear distinction.

• Electronic commerce, or e-commerce, is defined to be the process of businesses

trading with other businesses and the formulation of internal processes using
electronic links.

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• Electronic business, or e-business, is a term often used interchangeably with e-

commerce, but is more concerned with the transformation of key business processes
through the use of internet technologies.

In addition to this, a more generic definition of electronic commerce would include

electronic funds transfers used by many banks as well as business to business
communications using the internet, extranet and intranet networks.
(www.londoninternational.ac.uk, 2011)

From the analysis of the definition, we may put that E-Commerce is a confluence of
business operations with electronic and network technologies. Telephony and non-
networked technologies such as CD-ROM media may integrate into operations, but the
core of E-Commerce is network technologies and especially open networks such as the
Internet (www.orlandowebdevelopment.com, 2011). E-commerce means processing of
information using one digital application (EDI or Internet) and only a few quick steps.
(www.thalys.gr, 2011)

Ecommerce has allowed firms to establish a market presence, or to enhance an

already larger market position, by allowing for a cheaper and more efficient distribution
chain for their products or services. One example of a firm having successfully used
ecommerce is Borders. This book store not only has physical stores, but also has an
online store where the customer can buy books, CDs and DVDs.
(www.investopedia.com; 2011).

E-commerce is a very valuable weapon. Its most important characteristic is

interactivity which keeps the customer involved in the company’s processes. Interactivity
is the mean to individualization. Furthermore, it is cheap as long as you use Internet or
reform already installed EDI (Electronic Data Interchange). Note that installing EDI from
the beginning is much more expensive than using the web. (www.thalys.gr, 2011)

There had always been illusion as to the concepts of e-commerce and e-

business. While some use e-commerce and e-business interchangeably, they are distinct
concepts. In e-commerce, information and communications technology (ICT) is used in
inter-business or inter-organizational transactions (transactions between and among
firms/organizations) and in business-to-consumer transactions (transactions between
firms/organizations and individuals). (Andam, Z.R.; 2003)

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From this discussion we may conclude that an e-business model must have following

essentials:

1. A shared digital business infrastructure, including digital production and distribution

technologies (broadband/wireless networks, content creation technologies and
information management systems), which will allow business participants to create
and utilize network economies of scale and scope;

2. A sophisticated model for operations, including integrated value chains-both supply

chains and buy chains;

3. An e-business management model, consisting of business teams and/or partnerships;

and

4. Policy, regulatory and social systems-i.e., business policies consistent with e-

commerce laws, teleworking/virtual work, distance learning, incentive schemes,
among others. (Andam, Z.R.; 2003)

Types of E-Commerce:

Some of the major types of e-commerce include the following:

• business-to-business (B2B);

• business-to-consumer (B2C);

• business-to-government (B2G);

• consumer-to-consumer (C2C);and

• mobile commerce (m-commerce).

B2B E-Commerce:

B2B e-commerce is simply defined as e-commerce between companies and

involves companies conducting e-procurement, supply chain management, network
alliances, and negotiating purchase transactions over the internet. Businesses use e-
commerce to lower transaction costs of conducting business and to make savings in
terms of time and effort when conducting business. Being the largest category of e-
commerce, it is expected by most of the experts that B2B e-commerce will continue to
grow faster than the B2C segment. (www.londoninternational.ac.uk, 2011)
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B2C e-commerce:

Business-to-consumer e-commerce, or commerce between companies and

consumers, involves customers gathering information; purchasing physical goods (i.e.,
tangibles such as books or consumer products) or information goods (or goods of
electronic material or digitized content, such as software, or e-books); and, for
information goods, receiving products over an electronic network.

It is the second largest and the earliest form of e-commerce. Its origins can be
traced to online retailing (or e-tailing). Thus, the more common B2C business models are
the online retailing companies such as Amazon.com, Drugstore.com, Beyond.com,
Barnes and Noble and Toys Rus. Other B2C examples involving information goods are
E-Trade and Travelocity. (Andam, Z.R.; 2003)

C2C E-Commerce:

Consumer-to-consumer e-commerce or C2C is simply commerce between private

individuals or consumers. Being characterized by the growth of electronic market-places
and online auctions, particularly in case of vertical industries where firms/businesses can
bid for what

They want from among multiple suppliers, it perhaps has the greatest potential for
developing new markets.

This type of e-commerce comes in at least three forms:

• auctions facilitated at a portal, such as eBay, which allows online real-time

bidding on items being sold in the Web;

• peer-to-peer systems, such as the Napster model (a protocol for sharing files
between users used by chat forums similar to IRC) and other file exchange and
later money exchange models; and later money exchange models; and

• classified ads at portal sites such as Excite Classifieds and eWanted (an
interactive, online marketplace where buyers and sellers can negotiate and
which features “Buyer Leads & Want Ads”). (Andam, Z.R.; 2003)

B2G E-Commerce:

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Business-to-government e-commerce or B2G is generally defined as commerce

between companies and the public sector. It refers to the use of the Internet for public
procurement, licensing procedures, and other government-related operations. This kind
of e-commerce has two features: first, the public sector assumes a pilot/leading role in
establishing e-commerce; and second, it is assumed that the public sector has the
greatest need for making its procurement system more effective.

Web-based purchasing policies increase the transparency of the procurement

process (and reduce the risk of irregularities). To date, however, the size of the B2G e-
commerce market as a component of total e-commerce is insignificant, as government e-
procurement systems remain undeveloped. (Andam, Z.R.; 2003)

The table below provides a summary of the different e-commerce categories.

Table 1: Summary of the different e-commerce categories

Category Description Example

Business-to-business Businesses sell products or Grainger.com sells industrial

(B2B) services to other businesses. supplies to large and small
businesses through its
website.

Business-to-consumer Businesses sell products or Tesco.com sells

(B2C) services to individual merchandise to consumers
consumers. through its website.

Consumer-to-consumer Participants in an online e-Bay is an online

(C2C) marketplace can buy and sell
goods to each other. As
businesses also utilize this
type, it can be considered a
type of B2C e-commerce.
commercial market place,
often using an auction
system.

Business-to- Businesses sell goods or CAL-Buy portal for

government services to governments and businesses that want to sell
government agencies. Can online to the State of
(B2G)
also be considered as part of California.

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B2C ecommerce.

Source: www.londoninternational.ac.uk, 2011; Introducing electronic commerce.

Accessed on: October 10, 2011. P-9.
http://www.londoninternational.ac.uk/current_students/programme_resources/cis
/pdfs/subject_guides/level_3/cis323/cis323_chpt1.pdf

Traditional Commerce vs E-Commerce:

In the following table you can see in table form the differences in media used for

traditional and e-commerce. Please notice that as far as e-commerce is concerned

everything can be done through a server:

Table 2: Difference between E-commerce and Traditional commerce (on the basis of
Action Involved)

Action E-commerce Traditional commerce

Acquire product information Web pages Magazines, flyers, online

catalogs

Request item E-mail Printed forms, letters

Check catalogs, prices On-line catalogs Catalogs

Check product availability and E-mail Phone, fax

confirm price

Generate order E-mail, web pages Printed form

Send /Receive Order E-mail, EDI Fax, mail

Prioritize order On-line database

Check inventory at warehouse On-line database, web phone,fax

pages

Schedule delivery E-mail, On-line database Printed form

Generate invoice On-line database Printed form

Receive product Shipper (unless it is Shipper

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electronic)

Confirm receipt E-mail Printed form

Send/Receive Invoice E-mail, EDI Mail

Schedule payment EDI, On-line database Printed form

Send /Receive Payment EDI Mail

Source: www.thalys.gr , 2011; Positioning Towards Customer and Supplier; Accessed on;
October 10, 2011. PP-8-9.
http://www.thalys.gr/pagesuk/technicalissues/internet/e-
commerce/e_commerce_e_commerce_p9.htm

The historical development of e-commerce:

The first wave:

The use of networks to exchange money and transfers began in the late 1950s
with the development of electronic fund transfers (EFTs). EFTs, or wire transfers, was the
electronic transmission of account information over private communication networks.
Such activity may be thought of as electronic trading, since businesses and individuals
could update accounts and trade via EFTs.

In the late 1960s, electronic data interchange was used to reduce the amount of
time and effort in putting data such as invoices, purchase orders and bills. EDI allowed
for the exchange of information and the execution of electronic transactions between
businesses, typically in the form of electronic purchase orders and invoices. Businesses
that engage in EDI are referred to as Trading Partners. Due to the high implementation
costs only government agencies and large corporations were able to enjoy this
technological benefit. (www.londoninternational.ac.uk, 2011)

It wasn’t until 1994 that e-commerce (as we know it today) really began to
accelerate with the introduction of security protocols and high speed internet connections
such as DSL, allowing for much faster connection speeds and faster online transaction
capability. Industry “experts” predicted explosive growth in e-commerce related
businesses.

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In response to these expert opinions, between 1998 and 2000, a substantial number of
businesses in Western Europe and the United States built out their first rudimentary e-
commerce websites. (sellitontheweb.com, 2011)

However, many of these companies went bust, due to not having sufficiently
robust revenue models to generate enough income to sustain their business. As more
and more businesses competed for a fixed number of good ideas, internet businesses
became over-valued and many bad ideas were also implemented. By 2000, the internet
business had started to see a downturn. Thousands of businesses went bust as lack of
advertising revenue meant they could not sustain their early promise.
(www.londoninternational.ac.uk, 2011)

The dot-com collapse raised the concerns, and seeing its innumerable benefits,
investigations were made for finding the reasons for such an incidence. These
investigations came up with following serious flaws made while adopting the technology:

• It was found that e-commerce was limited to a large degree to US businesses and
was not global in nature. (www.londoninternational.ac.uk, 2011)

• Most of the early e-businesses used English as their language of choice,

henceforth, users who did not speak English, or who did not feel confident enough
to buy goods and services in English, did not conduct e-commerce.

• Many of the original e-commerce businesses were started with outside investor
money-backing good ideas. They focused entirely on how internet could be used
to refine business processes and reduce transaction costs and less care was
taken regarding developing understanding on how these businesses could
produce revenue.

• Email has traditionally been unstructured in terms of how it was used by

businesses. Businesses used email for communications without any formal
structure which required personnel to read resulting in high cost.

• Email has also been associated with the ever increasing amounts of spam and
other unsolicited content. The expected reliance on advertising as a revenue
source was a major mistake by many e-businesses. The lack of alternative
revenue models or an understanding of what online advertising actually yielded in

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terms of returns meant that many e-businesses were left with no revenue
streams. (www.londoninternational.ac.uk, 2011)

The Second Wave:

In an effort to overcome the flaws of the first wave, and to ensure achievements of
new heights, the key characteristics of the second wave of e-commerce can be
understood to be based on internationalization and widening participation.

Accordingly, following initiatives came as a landmark to ensure wide acceptance of e-

commerce:

• Many businesses have begun to provide global e-commerce presences realising

the importance of e-commerce as a global market place. Websites were
developed in local languages which are customized to local markets in terms of
the content they provide.

• Own funds and capital was mainly used for establishing online businesses.

• Great effort and care is taken in devising revenue models and identifying
appropriate revenue streams. There is an emphasis not on who will supply us with
revenue, but how are we going to generate revenue.

• Businesses are willing to be flexible in terms of how revenue is generated, and

believe that reacting to current trends is the key to establishing a successful
online presence.

There has been an explosion in the number of internet users worldwide, and it is fair
to say that most countries in the world now have internet access, if not always at the
same level of quality. Availability of broadband connections has ensured access to digital
content such as video and music can be sold and exchanged online. Even greater
emphasis has been put on the use of customised email strategies. Businesses now use
email for formulating deep relationships with consumers and ensuring that consumers
are contacted in a timely manner.

Businesses today use a multitude of sophisticated advertising approaches that are

integrated with their e-business activities. They have developed new strategies for the
sale of distributed products with advertising attached. (www.londoninternational.ac.uk,
2011)

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The main differences between the first and second waves of e-commerce are
summarized in the table below.

Table 3: Differences between the First and Second waves of e-commerce:

First Wave Second Wave

Dominant influence of U.S. businesses.
Extensive use of the English language.
Internet technologies were slow. Most
consumers connected to the internet using
dial-up modems.
Electronic mail was used as a tool for
relatively unstructured communication.
Over-reliance on advertising as a revenue
source of many failed dot-com businesses.
Many new companies started with outside
investor money.
Global enterprises in many countries are
participating in electronic commerce.
The increase in broadband connections in
homes is a key element. Although these
connections are more expensive, they are
up to 20 times faster and can alter the way
people use the web.
Customized e-mail strategies are now
integral to consumer contact.
Some categories of online advertising,
such as employment services (job wanted
ads) are growing rapidly and are replacing
traditional advertising outlets.
Established companies fund electronic
commerce initiatives with their own capital.

Source: www.londoninternational.ac.uk, 2011; Introducing electronic commerce.

Accessed on: October 10, 2011. P-13

Issues in E-commerce Application:

Various applications of e-commerce are continually affecting trends and prospects for
business over the Internet, including e-banking, e-tailing and online publishing/online
retailing.

A more developed and mature e-banking environment plays an important role in

ecommerce by encouraging a shift from traditional modes of payment (i.e., cash, checks
or any form of paper-based legal tender) to electronic alternatives (such as e-payment
systems), thereby closing the e-commerce loop.

In most developing countries, the payment schemes available for online transactions are
the following:

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A. Traditional Payment Methods:

● Cash-on-delivery: Many online transactions only involve submitting purchase orders

online. Payment is by cash upon the delivery of the physical goods.
● Bank payments: After ordering goods online, payment is made by depositing cash into
the bank account of the company from which the goods were ordered. Delivery is
likewise done the conventional way.

B. Electronic Payment Methods:

● Innovations affecting consumers: This includes credit and debit cards, automated
teller machines (ATMs), stored value cards, and e-banking.
● Innovations enabling online commerce are e-cash, e-checks, smart cards, and
encrypted credit cards. These payment methods are not too popular in developing
countries. They are employed by a few large companies in specific secured channels
on a transaction basis.

● Innovations affecting companies pertain to payment mechanisms that banks provide

their clients, including inter-bank transfers through automated clearing houses
allowing payment by direct deposit. (Andam, Z.R.; 2003)Even if e-commerce had
equipped with so much of benefits, it has undoubtedly suffered with certain loopholes.
Various surveys in this regard have come up with various internal and external issues
like, unfavorable economic environment, the high cost of ICT, security concerns, poor
internal communications infrastructure within SME firms, lack of ICT awareness and
knowledge as well as inadequacy of ICT-capable and literate managers and workers,
insufficient financial resources, and the perceived lack of relevance or value-added of
ICTs to their business.In general, the main issues of concern that acts as barriers to
the increased uptake of information technology and e-commerce are the following:
• Lack of awareness and understanding of the value of e-commerce: Most SMEs in
developing countries have not taken up e-commerce or use the Internet because
they fail to see the value of e-commerce to their businesses. Many think e-
commerce is suited only to big companies and that it is an additional cost that will
not bring any major returns on investment.

• Lack of ICT knowledge and skills:

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• Technology literacy is still very limited in most developing countries. Shortage of

skilled workers among SMEs, is a key issue in moving forward with using
information technology in business. There are also doubts about whether SMEs
can indeed take advantage of the benefits of accessing the global market through
the Internet, given their limited capabilities in distinct spheres. They can, however,
capitalize on returns on the basis that they are the low cost providers.
Furthermore, SMEs doubt whether Web presence will facilitate their own brand
recognition on a global scale or not. Financial costs. The high cost of computers
and Internet access (high initial investment) is a barrier for small firms to uptake of
e-commerce. Faced with budgetary constraints, SMEs consider the additional
costs of ICT spending as too big an investment without immediate returns.
(Andam, Z.R.; 2003)
• Infrastructure: The national network/physical infrastructure of many developing
countries is characterized by relatively low tele-density, a major barrier to e-
commerce. There are also relatively few main phone lines for business use
among SMEs.
• Security and Other privacy-related issues: Ensuring security of payments and
privacy of online transactions is a key to the widespread acceptance and adoption
of e-commerce. While the appropriate policies are in place to facilitate e-
commerce, lack of trust is still a barrier to using the Internet to make online
transactions. Moreover, credit card usage in many developing countries is still
relatively low.

In addition, there are other related reasons and unresolved issues, such as
tax evasion, privacy and anonymity, fraud adjudication, and legal liability on credit
cards. In many countries, cash is preferred not only for security reasons but also
because of a desire for anonymity on the part of those engaged in tax evasion or
those who simply do not want others to know where they are spending their
money. Others worry that there is lack of legal protection against fraud (i.e., there
is no provision for adjudicating fraud and there may be no legal limit on liability,
say, for a lost or stolen credit card). It is necessary to distinguish these concerns
from the general security concerns (i.e., transaction privacy, protection and

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security) since they may not be addressed by the employment of an effective

encryption method (or other security measure). (Andam, Z.R.; 2003)

M-COMMERCE

As content delivery over wireless devices becomes faster, more secure, and scalable,
the novel inventions led the generations into the new era of mobile-commerce (m-
commerce), and some believe that m-commerce will surpass wire-line e-commerce as
the method of choice for digital commerce transactions. This may well be true for the
Asia-Pacific where there are more mobile phone users than there are Internet users.

Mobile Commerce, is the ability to conduct commerce using a mobile device, such as a
mobile phone, a Personal Digital Assistant (PDA), a smart-phone, or other emerging
mobile equipment (en.wikipedia.org). To put in simple words, M-commerce (mobile
commerce) is the buying and selling of goods and services through wireless technology,
i.e., hand-held devices such as cellular phones and personal digital assistants (PDAs).
Japan is seen as a global leader in m-commerce. (Nagaraju, 2010)

According to Webagency, 2001, M-Commerce has been defined as under:

“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.” Web agency, 2001.
(www.themanager.org, 2011)

M-commerce is a by-product of the technology convergence of

information technology (IT) with telecommunication technologies
(TCT). Together they are referred to as information and M-
commerce may be thus regarded as an extension of electronic
commerce (ecommerce) to wireless media. This convergence,
however, enables some unique, location-based services, hitherto 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.

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Mobile services are reported in the fields of content, entertainment,

travel, banking and marketing. (Tiwari, R. et al., 2008)

Fig. 1: M-Commerce and E-Commerce

Source: www.binarymantrasystems.com (2009); Whitepaper Future of m-Commerce, P-

2.

Feature of M-Commerce:

1) Ubiquity- It means that the users can avail of services and carry out transactions
largely independent of his current geographic location.

2) Immediacy- It provides real-time availability of services.

3) Localisation- Location based services such as GPS, allow companies to offer goods
and services to the user specific to his current location.

4) Instant Connectivity- This feature brings convenience to the user, due to introduction
of services like GPRS which keeps users always in touch and connected.

5) Simple authentication- Mobile telecommunication device function with an electronic

chip called SIM, which is easily identifiable. This in combination with an individual
Personal Identification Number (PIN) makes the authentication process simple.

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Fig. 2: Features of M-commerce

Simple
Authentication
Devices like SIM,
PIN are effective

Instant Connectivity Ubiquity

Always-on features, Services available
hence convenient
anywhere

M-Commerce

Localisation Immediacy
Localised Content Services available
and Services anytime

Source: www.binarymantrasystems.com (2009); Whitepaper Future of m-Commerce,

Page-3

History of M-Commerce:
Mobile commerce was born in 1997 when the first two mobile-phones enabled Coca
Cola vending machines were installed in the Helsinki area in Finland. The machines
accepted payment via SMS text messages. The first mobile phone-based banking
service was launched in 1997 by Merita Bank of Finland, also using SMS. A major leap
took place when two major national commercial platforms for mobile commerce were
launched in 1999. These included Smart Money in the Philippines, and NTT DoCoMo's i-
Mode Internet service in Japan.
Mobile-commerce-related services spread rapidly in early 2000. Norway launched mobile
parking payments. Austria offered train ticketing via mobile device. Japan offered mobile
purchases of airline tickets.

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In order to exploit the potential mobile commerce market, mobile phone

manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with
carriers such as AT&T Wireless and Sprint to develop WAP-enabled smart-phones.
Smart-phones offer fax, e-mail, and phone capabilities.
Since the launch of the i-Phone, mobile commerce has moved away from SMS
systems and into actual applications. SMS has significant security vulnerabilities and
congestion problems, even though it is widely available and accessible. In addition,
improvements in the capabilities of modern mobile devices make it prudent to place
more of the resource burden on the mobile device.
This is seen as a bridge between the gaps created by e-commerce and in-store
shopping, and is being utilized by physical retailers as a way to compete with the lower
prices typically seen through online retailers.
Products and services available:

• Mobile ticketing

• Mobile vouchers, coupons and loyalty cards

• Content purchase and delivery

• Location-based services

• Information services

• Mobile banking

• Mobile Store Front

• Mobile brokerage

• Auctions

• Mobile Browsing

• Mobile marketing and advertising. (en.wikipedia.org, 2011)

Industries affected by m-commerce include:

● Financial services, including mobile banking (when customers use their hand-held
devices to access their accounts and pay their bills), as well as brokerage services (in
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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;
and
● Information services, which include the delivery of entertainment, financial news, sports
figures and traffic updates to a single mobile device.
(searchmobilecomputing.techtarget.com, 2011)

Present Scenario:

According to a survey made by Informa (Nov 2007), there are currently over 3 billion
mobile phones worldwide, that is, approximately 40% of the world’s population currently
carries a mobile phone. The chart below puts this figure in the context of other major
technologies. Mobile phone adoption continues to grow. In many developed countries
mobile phone penetration is well above 90%, so saying “everyone has a mobile phone’
has become a reality.

Source: Mobile Commerce: Opportunities and challenges, A GS1 Mobile Com White
Paper.February 2008 Edition. PAGE-10.

Mobile Commerce: Beyond E-Commerce:

Throughout the 1990s the introduction of the internet and e-commerce reshaped
the way that businesses do business and the way that consumers interact with
businesses. Businesses took the opportunity to automate many processes that before
would have been handled manually, from ordering to customer service. One clear
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example is the way that spending on advertising has begun to shift from traditional off-
line media to online and digital media as advertisers have seen an opportunity to better
connect with their target audience. IBM forecasts 22% growth in mobile, digital and
interactive advertising formats between 2006 and 2010 against 4% growth in traditional
advertising formats.

Mobile commerce, often referred to as m-commerce, builds on the advances

made by ecommerce (such as automated, electronic processes) but makes interaction
available to a wider audience in a more personalized way.

Like any emerging market, there are many propositions about how to use this
technology. Some organizations adopt an aggressive policy and want to get something
moving as fast as possible whilst others adopt a wait-and-see approach. As a result,
proprietary solutions are developed that make integration with existing systems or by
multiple partners complex and costly. At the same time, multiple solutions create a
complex landscape for businesses and consumers alike - making it difficult to choose
which solution to use.

The other difference between ecommerce and m-commerce is the opportunity to

connect information with objects in a more direct way than has been possible until now.
This is the world predicted by the Internet of Things, a report published by the
International Telecommunications Union (ITU) in 2005, where objects have a life and
history of their own that we can use to our advantage. The mobile phone can be the tool
that connects the physical and virtual world. At the base of this vision is the ability to
identify objects uniquely. What is special about mobile phones is the fact that they have
massive adoption globally.

Many more people have access to a mobile phone that to a computers and this
means that m-commerce has the opportunity to connect not just big businesses but also
small business and consumers on a massive scale. In this sense, mobile phones have
the potential to bridge the digital divide and allow organizations and individuals to reach
out to one another more easily than ever before. We’re moving into a world where digital
goods are becoming as important as physical goods. Due to the internet, value is
created not just by goods themselves but by the exchanges of those goods.

Organisations that can facilitate that exchange (for example by creating

communities of users with similar interests) have a significant competitive advantage in
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this networked world. Furthermore, these communities can be leveraged to increase

sales of physical goods through more engaged users. (GS1 Mobile Com, 2008)

Future Categories:

In the future other categories will come to light, mirroring technologies just now
gaining steam on the internet. Potentially, peer to peer networks will develop in the
wireless world,

Although no such technology exists today. For instance, going back to the vending
machine example, what if vending machines in a certain area, say a college campus,
could talk to each other in a peer to peer fashion. When a machine runs out of a certain
type of product, and a user shows up and requests that product, the machine can refer
the user to the closest machine which does have the product in stock. Possibly even
forwarding the money already entered to the new machine. This is just one example of
the many technologies, most not yet even thought of, which will undoubtedly develop
under the umbrella of m-Commerce. (Hunter, J.L.; 2002)

CONCLUSION:

From the above discussion we can easily put-forth that commerce has gone
through revolutionary changes to keep pace with changing world. In this wake, it has
traveled phase of traditional commerce to e-commerce. E-commerce had played game
changing role for businesses around the world. Albeit, having some drawbacks, it had
generated enormous opportunities for businesses to accelerate upon others. Even, it
opened the path for future technological development possibilities for the businesses for
ensuring easy access to customers. This possibility and innovations in technology led to
the emergence of a recent phenomenon - “m-commerce”. Innovation in mobile market
had made it all possible. However, with it had aroused certain concerns regarding its use
and security. Seeing the enormous opportunities in this field, it is required that the
initiatives should be carefully framed out keeping in mind all possible loopholes that may
arise in future, to escape it from any failures.

REFERENCES:

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Andam, Z.R. (2003, May); E-Commerce and E-Business; ASEAN Task FORCE. Undp-
apdip. P-7

Ibid. P10-12.

Ibid. PP-12-13.

Ibid. P-13.

Ibid. PP-13-15.

Ibid. P-20.

Ibid. P-21.

Ibid. P-31.

Ibid. P-32.

en.wikipedia.org (2011); Mobile commerce. October 10, 2011.

Mobile commerce; http://en.wikipedia.org/wiki/Mobile_commerce

GS1 Mobile Com, 2008; Mobile Commerce: opportunities and challenges; A GS1 Mobile
Com White Paper. February 2008 Edition. PP-12-13.

Hunter, J.L., (2002, April 9); m-Commerce: Reality Behind the Hype.

jcizzo.com, (2011); Traditional Commerce. Accessed on: October 10, 2011.

http://jcizzo.com/the-traditional-commerce.html

Nagaraju, August 19, 2010. October 10, 2011.

What is M-Commerce?; http://www.smarte-commerce.com/what-is-m-commerce/

searchmobilecomputing.techtarget.com, (2011); m-commerce (mobile commerce);

http://searchmobilecomputing.techtarget.com/definition/m-commerce

sellitontheweb.com ; History of E-Commerce. Retrieved on: October 10, 2011.

http://sellitontheweb.com/blog/history-of-e-commerce/

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Steinfield C. (2002); Understanding Click And Mortar E-Commerce Approaches: A

Coneptual Framework And Research Agenda. Journal of Interactive Advertising; Vol 2

No 2 (Spring 2002), American Academy of Advertising. ISSN 1525‐2019. PP. 1‐10

Tiwari, R., Buse, S. Herstatt (2008); From Electronic to Mobile Commerce: Opportunities
through technology convergence for business services; CACCI Journal, Vol. 1, 2008. PP
1-2.

www.investopedia.com (2011); Brick And Mortar. Accessed on; October 10, 2011.
http://www.investopedia.com/terms/b/brickandmortar.asp#axzz1aLz3MXjf

www.londoninternational.ac.uk, (2011); Introducing electronic commerce. Accessed on:

October 10, 2011. P-8.
http://www.londoninternational.ac.uk/current_students/programme_resources/cis/pdfs/su
bject_guides/level_3/cis323/cis323_chpt1.pdf

Ibid. P-9.

Ibid. P-11.

Ibid. P-13.

www.orlandowebdevelopment.com; Understanding E-Commerce. Accessed on;

October 10, 2011.
http://www.orlandowebdevelopment.com/e-commerce-definition.htm

www.thalys.gr, (2011); Introduction; Accessed on; October 10, 2011.

http://www.thalys.gr/pagesuk/technicalissues/internet/e-
commerce/e_commerce_e_commerce_p5.htm

Ibid. P-8.
http://www.thalys.gr/pagesuk/technicalissues/internet/e-
commerce/e_commerce_e_commerce_p8.htm
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www.themanager.org (2011); M-Commerce – the next Hype? © Oliver Recklies, March

2001. October 10, 2011.
www.themanager.org/pdf/M-Commerce.PDF

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