m-Commerce Poised For Growth In Indian Market: IAMAI

The m-commerce sector is poised for growth in the Indian market owing to its intrinsic link to the booming mobile telephony sector in the region. While m-commerce is in its nascent stages, it is slated to boom over the next few years with growing sophistication and lower prices of mobile handsets.

A report by the Internet and Mobile Association of India titled ‘Mobile Value-Added Services in India’ projects that the mobile VAS sector (of which m-commerce is a part) is expected to grow from Rs 5,780 cr (June 2008) to Rs 16,520 cr in June 2010 as a direct benefit of the growth in mobile telephony.

Currently, users of m-commerce perform a wide variety of transactions via mobile from paying of utility bills and purchase of movie tickets to shopping and holidays. While the uptake of mobile payments is still gathering pace, services that are more accessible and easier to use are finding favour.

With the RBI’s support for m-banking and the release of its guidelines on mobile banking transactions (Sept-Oct 2008), banks have sped up their roll out of m-payment products with banks such as Standard Chartered, SBI and IDBI Bank launching their services in the early part of the year.

Ajay Adiseshann, founder and MD of PayMate, a mobile payments solutions provider, said, “We have seen a quarterly increase in m-commerce use and uptake consecutively for the past year. Our users cross over a broad section of society and our variety of transactions reflect this. The most popular uses for our product are utility bill payments, mobile recharge and flight and movie tickets.”

PayMate’s recently-commissioned research by The Nielsen Company shows 64 percent of m-payment users surveyed had registered for an m-commerce service within the prior six months. This points to a spike in consumer confidence in m-commerce since the RBI issued its guidelines in Sept-Oct 2008. However, the research highlights lack of awareness and information about the security of m-commerce as the main barrier to uptake of this technology.

The research also demonstrates that the Internet emerges as the most appropriate platform for generating awareness about m-commerce among active and dormant users.