Mobile commerce hits a wall in India


India Mobile CommerceMobile commerce may be facing serious challenges in India

Mobile commerce may be a rapidly growing phenomenon, but it if facing hard times in India, which could be a sign of things to come in the future for the rest of the global market. Mobile commerce is a relatively simple concept: Consumers using their mobile devices to purchase products and shop both online and in-store. This concept has won the adoration of consumers around the world, but its simplicity belies the complications that are associated with running a mobile commerce business.

Problems in India may foreshadow future challenges

In India, mobile commerce has hit a sheer drop-off, in terms of adoption and support. While consumers are still showing a great deal of interest in mobile commerce, this interest largely revolves around well established e-commerce gateways that most consumers already have extensive experience with. Most major retailers offer some form of mobile commerce service to consumers, and this is not necessarily good news for smaller ventures.


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Data shows mobile commerce start-ups have high mortality rate

According to data from Microsoft’s India Accelerator Program, which provide services to technology start-ups throughout India, some 379 new technology product start-ups launched in the country before October of this year. Of these, 193 were e-commerce firms that specialized in some aspect of mobile commerce. Approximately 87 of these firms no longer exist, either because they have been absorbed by larger companies or they simply could not find traction with consumers. Investors becoming leery of the prospects of mobile commerce is cited as a major reason why these firms have faced failure.

Investors leery of supporting new start-ups

Investors are beginning to show hesitance when it comes to mobile commerce. Start-ups entering the mobile commerce field often make promises that are difficult to keep and investors backing companies that end  up failing face significant financial losses. If start-ups cannot compete with major companies like Google, which has established a strong presence in mobile commerce, they are not likely to find the traction they need to be successful, thus leading investors to question the prospects of supporting mobile commerce ventures.

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