Mobile Commerce in India

Published: 9 Jun 2014

The Indian telecommunications industry, one of the fastest growing ones and the second largest in the world, has come a long way over the past decade and a half with rapid technological developments. While growth has ushered in an era of ubiquitous connectivity, it has also equipped us with an all-powerful infotainment device in the form of a mobile phone, which has slowly evolved from a simple communication device to a tool with limitless possibilities. The smartphone revolution has not only flooded the Indian market with devices covering the entire price and performance spectrum, but has also aided the development of the ecosystem by facilitating the growth of innovative applications and content.

Today, there is an increased focus on improving value-added services (VAS) and data ecosystem in terms of providing better content and applications, and mobile commerce (m-commerce) is one of them. As per Frost & Sullivan estimates, the network-based segment of m-Commerce applications in India will record revenues of US $1.26 billion with close to 72.5 million subscribers by end 2018. With close to 900 million wireless subscribers and 150 million mobile Internet users in India, m-Commerce presents itself with a huge potential. While m-Commerce is still in a nascent stage in India, the ever-increasing wireless subscribers and Internet base, along with increased affordability and availability of smartphones, bode well for the market.

The segments of m-Commerce that have gained some traction in the Indian market are that of m-payments and m-banking. The various services that have gained traction here include payment of utility bills, payments made for online purchases, and basic banking services. Recently, we have had telecom service providers tying up with banks to provide mobile money transfer and payment services. While Airtel has tied up with Axis bank, Vodafone has tied up with ICICI Bank to tap the market. In order to ensure their presence in the space, a number of e-commerce companies and banks have launched mobile versions of their websites. The Reserve Bank of India has come up with guidelines for the smooth conduct of such transactions. While the bank has put a cap at INR 50,000 for such transactions, it is convinced beyond doubt about the huge potential that such services have in the Indian market.

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