Mobile 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.
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.
nk, one of the largest financial institutions in the country, is gearing up to launch a new mobile commerce service for consumers. The bank has teamed with Vodafone, a British multinational telecommunications company, in order to develop the platform and its associated application, called “m-pesa.” The mobile commerce initiation will be managed by Mobile Commerce Solutions, a wholly owned subsidiary of Vodafone, which will provide services to India’s growing mobile consumer population.