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The proliferation of mobile Internet devices is creating an unparalleled opportunity for e-commerce to leverage the benefits of mobility. Mobile e-commerce, commonly referred to as m-commerce, is the ability to purchase goods anywhere through a wireless Internet-enabled device. Current e-commerce providers, engaged through mobile devices, will find advantage in developing unique m-commerce value propositions founded upon the specific dimensions of ubiquity, convenience, localization, and personalization. A consumer orientation that provides value-for-time functions to create a new value curve may achieve a competitive advantage over traditional e-commerce models replicated for mobile business. Therefore, this paper investigates the value propositions, that engender a productive mobile e-commerce strategy to provide recommendations for managerial decision-making in this emerging wireless environment.
Introduction
in the new decade, the call for information technology will be information, any time, any place and on any device. Accordingly, e-commerce is poised to witness an unprecedented explosion of mobility, creating a new domain of mobile commerce. Mobile commerce, or m-commerce, is the ability to purchase goods anywhere through a wireless Internet-enabled device. Mobile commerce refers to any transaction with monetary value that is conducted via a mobile network. It will allow users to purchase products over the Internet without the use of a PC. "Within five years, individual e-commerce services will be primarily delivered by wireless and the wireless terminal will become the window of choice to the transactional e-world," says Nell Montefiore, executive of Singapore mobile operator M1 (Hoffman, 2000, p.20). This proliferation of wireless capability has created an emerging opportunity for e-commerce businesses to expand beyond the traditional limitations of the fixed-line personal computer.
The magnitude of the mobile Internet revolution will pressure current e-commerce business models, create apertures for new mobile Internet companies, engender a stream of change among established e-commerce paradigms, and lead to a reconfiguration of value propositions in many industries (Evans & Wurster, 1997). However, m-commerce is still not without its limitations. The problems it must overcome include: uniform standards, ease of operation, security for transactions, minimum screen size, display type and bandwidth, billing services, and the relatively impoverished web sites. Due to current technological limitations, limited service availability, and varying mobile consumer behavior patterns, business strategies developed for m-commerce applications will find it necessary to emphasize differing characteristics than traditional e-commerce strategies (Barnett, Hodges & Wilshire, 2000; Datamonitor, 2000). Successful m-commerce providers will understand that consumers are unwilling to spend long periods "surfing" on these inherently less user-friendly wireless devices (Albright, 2000). Wireless users demand packets of hyper-personalized information, not scaled-down versions of generic information. Therefore, technology-focused wireless Internet business models will be replaced by models which best integrate the unique characteristics of wireless m-commerce. As such, the long-term success of e-commerce may be partially dependent upon the successful development of effective consumer-oriented m-commerce business strategies. "Mobile commerce is per se not included in the traditional e-commerce market models. M-commerce will be able to increase the overall market for e-commerce, because of its unique value proposition of providing easily personalized, local goods and services anytime and anywhere" (Durlacher, 2000, p. 12).
Despite tremendous interest in the melioration of m-commerce there is little, if any, research that examines how to develop a comprehensive consumer-oriented mobile e-commerce strategy. Therefore, the primary purpose of this paper is to explore the factors which compose an effective m-commerce strategy. First, this paper investigates the nonpareil benefits of mobile applications. Then, this paper explores how managers can incorporate potential m-commerce value propositions into their overall e-commerce strategies through creating new market space (Kim & Mauborgne, 1999). Given the potential assemblage of wireless Internet devices, an enhanced understanding of m-commerce could acutely improve a company's overall ability in e-business strategy formulation.
Background
Mobile devices have been the fastest adopted consumer products of all time with, last year, more mobile phones shipped than automobiles and PCs combined (Chen, 2000; de Haan, 2000). By 2003, there will be 1.4 billion mobile phones worldwide and half will be Internet-enabled (Zabala, 2000). Nokia estimates that by 2002 a greater number of people will be linked to the Internet via wireless connections than through traditional fixed lines (Daitch, Kamath, Kapoor, Nemiccolo, Sahni & Varma, 2000). (1) Fueled by such enabling technologies as 3G broadband capability, extensible Markup Language (XML), Compact HTM L (CHTML), Wireless Markup Language (WML), Wireless Application Protocol (WAP), General Packet Radio Services (GPRS) and Internet ready mobile terminals, e-commerce is now poised to take advantage of the current growth of mobile devices. "The wireless world is a parallel universe almost as large as the Net, and the two are beginning a fascinating convergence," said Swapnil Shah, director of Inktomi Europe, a search engine and caching solutions company (Rao, 2000).
However, U.S. providers have lagged in m-commerce development since the U.S. market has been PC oriented for Internet technology. The U.S. leads the world in almost every e-commerce metric, while Europe and Japan have taken early leads in m-commerce. In fact some countries in Europe, like Spain and Italy, may completely leap PC-oriented e-commerce, based on their veneration of mobile phones, directly to m-commerce. As many as 100 new m-commerce companies launch in Europe each month (Brandt, 2000). Telefonica Italy is already selling all cellular phones with a pre configuration for Internet access. In Japan, mobile phones penetrate about 50% of the market with NTT DoCoMo's internet enabled i-mode service already connecting more than 5 million wireless users to the web. These markets continue to grow in appeal as DoCoMo's i-mode is attracting about 12,600 new users per day, each generating about $26/month in additional revenue per user (Schenker, 2000).
Commerce transpires as organizations introduce new methods to employ mobile devices to communicate, inform, transact and entertain using text and data via connection to public and private networks. This emergence of mobile commerce will happen even faster than the development of e-commerce--in roughly the time between the invention of the first Web browser and now (Schenker, 2000). "If you look five to 10 years out, almost all of e-commerce will be on wireless devices," says Jeff Bezos chief executive and founder of Amazon.com (McGinity, 2000). Consequently, within the next 5-years, one-quarter of all electronic commerce will take place through wireless devices (Zabala, 2000). Forecasts estimate the wireless web to be as large as the wired web of today and worldwide mobile commerce exceeding $200 billion by 2004 (M-commerce Times, 2000; Shaffer, 2000).
The potential of m-commerce is considerable for those willing to develop mobile-specific business strategies. As m-commerce matures, current mobile operators will rely less upon usage fees and increasingly derive revenues from content and services (Datamonitor, 2000; KPMG, 2000). Additionally, m-commerce is going to bring about a massive change in the way users consume products and services.
"It is key that commerce companies recognize m-commerce as a completely unique service. Cell phone users are more impatient than Internet users. The paradigm here is not surfing; all services for the mass market have to be pitched at users in such a seamless way that they need not even be aware that they are accessing the net."
Cindy Dahm, European director for Phone.com (Rao, 2000, p.2).
Those best able to provide value-added user experiences, through content aggregation and portal development, will achieve long-term success. Merely extending the current Internet presence will not be enough. "Mobile internet customers will be more demanding. They will want personalized service to meet their individual wants and needs and will no longer be satisfied with being a mass market" (KPMG, 2000, p. 2). Providers must take advantage of the characteristics which make m-commerce distinct from e-commerce to develop truly unique and compelling services rather than replicating current e-commerce models. Current e-commerce strategy is based on a traditional paradigm of consumers as passive receivers of communication efforts with the service provider holding control of the "when" and "where" of information (Mahadevan, 2000). With wireless internet enabled devices, consumers now have more discretion of "when" and "where" the information that is available, creating new market space and demand for a specialized mobile business offering.
Value Propositions for m-Commerce
Value propositions define the relationship between supplier offerings and consumer purchases by identifying how the supplier fulfills the customer's needs across different consumer roles (Band, 2000; Porter, 1998). Specifically, it specifies the interdependence between the performance attributes of a product or service and the fulfillment of needs. The value proposition furthermore solidifies the relationship between the customer and various dimensions of product value. Thus, customer satisfaction is merely a response to the value proposition offered by a specific product/service bundle. For e-commerce, the establishment of a value proposition is rudimentary to any consumer-oriented strategy creation (Timmers, 1998).
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