M-commerce reverses paradigms

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: Internet and mobile commerce, which are often taken to be alternative methods of transacting business, are in fact reverse paradigms. Internet space is horizontal, inhabited by the web sites of both small and large businesses – servicing a very large but general information browsing need. A small but a growing population of these sites is focusing on the specific needs – which are in fact Internet verticals.

Mobile commerce, which is currently struggling to establish its ground, will eventually evolve as verticals. These verticals will initially be local to each operator before they become globally accessible. The globalisation will in fact blur the verticals into a horizontal market

The difference in their evolutions is a result of how each is used and applied. Mobile commerce supports an “on the go” business model and draws its strength from the applications, which have a strong synergy with mobility. Internet has evolved as a solution that synergises with an environment over which the user has a greater control like an office or a home. The user likes to sit back, research, evaluate and ponder over the outcomes before it makes decisions. “On the go” usage is prescriptive, compulsive and requires quick decision making. This naturally leaves out those applications that require a different treatment.

i-mode knowingly or unknowingly was designed and positioned as mobile Internet – mobile access to Internet or horizontally inhabited spaces that are local to the operators. i-mode supports an operator specific horizontal ecosystem of about 90,000 sites in Japan and a “bit pipe” business model – which draws its revenue from the traffic going to all those sites and the sale of content that drives that traffic. This business model though it takes its genesis from Internet has had very limited success for the lack of verticals that synergize with “on the go” needs.

Most of the mobile Commerce initiatives launched in the last five years are i-mode “me too”, with their promoters little appreciating that the limited success that i-mode has enjoyed does not come from the horizontal paradigm but from a small number of verticals like mobile mail – an application that disrupted the market and drove 50,000 new subscribers day after day to subscribe to it. The same business model is struggling in Europe, Australia and Singapore.