m-commerce in bangladesh
DESCRIPTION
Situation of M-Commerce in Bangladesh including a comparison between Indian and Bangladeshi M-Commerce IndustryTRANSCRIPT
M-Commerce In Bangladesh
North South University
BBA
Summer 2011
FACULTY: Muntasir Alam
MIS 205 SECTION: 3
E-commerce in Bangladesh
Taufiq Ul Islam 0920436030 Rashadat Anowar Chowdhury 0930101020
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INTRODUCTION
M-commerce or Mobile Commerce refers to wireless electronic commerce used for conducting
commerce or business through a handy device like cellular phone or Personal Digital Assistant
(PDAs). In other words it is the ability to conduct commerce using a mobile device, such as a
mobile phone, a Personal digital assistant (PDA), a Smartphone, or other emerging mobile
equipment such as dashpot mobile devices It is the next generation wireless e-commerce that
needs no wire and plug-in devices. Mobile commerce is usually called as 'm-Commerce' in
which user can do any sort of transaction including buying and selling of the goods, asking any
services, transferring the ownership or rights, transacting and transferring the money by
accessing wireless internet service on the mobile handset itself.
The next generation of commerce would most probably be mobile commerce or m-commerce.
Presuming its wide potential reach all major mobile handset manufacturing companies are
making WAP enabled smart phones and providing the maximum wireless internet and web
facilities covering personal, official and commerce requirement to pave the way of m-
commerce that would later be very fruitful for them.
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History
M-commerce was intuitive in 1997 when the first two mobile-phones enabled Coca Cola
vending machines were installed in the Helsinki in Finland. The machine was capable of
accepting payment via SMS text messages. The first mobile phone-based banking service was
launched in 1997 by Merita Bank of Finland, also using SMS.
The following year in 1998, the first sales of digital content as downloads to mobile phones
were made possible when the first commercial downloadable ringtones were launched in
Finland by Radiolinja currently known as Elisa Oyj.
The next stage of m-commerce was proced by two major national commercial platforms for
mobile commerce launched in 1999: Smart Money (http://smart.com.ph/money/) in the
Philippines, and NTT DoCoMo's i-Mode Internet service in Japan. i-Mode offered a
revolutionary revenue-sharing plan where NTT DoCoMo kept 9 percent of the fee users paid for
content, and returned 91 percent to the content possessor.
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M-commerce-related services then stretched rapidly in early 2000. Norway launched mobile
parking payments. Austria offered train ticketing via mobile device. Japan offered mobile
purchases of airline tickets.
M-commerce mount up quickly after the first university short course to discuss mobile
commerce was held at the University of Oxford in 2003, with Tomi Ahonen and Steve Jones
lecturing. As of 2008, UCL Computer Science and Peter J. Bentley demonstrated the potential
for medical applications on mobile devices.
PDAs and cellular phones have become so popular that many businesses are beginning to use
mobile commerce as a more efficient way to communicate with their customers. In order to
exploit the potential mobile commerce market, mobile phone manufacturers such as Nokia,
Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint
to develop WAP-enabled Smartphone. Smartphone offer fax, e-mail, and phone capabilities.
In recent times, brick and mortar business owners, and big-box retailers in particular, have
made an effort to take advantage of mobile commerce by utilizing a number of mobile
capabilities such as location based services, barcode scanning, and push notifications to
improve the customer experience of shopping in physical stores. By creating what is referred to
as a 'bricks & clicks' environment, physical retailers can allow customers to access the common
benefits of shopping online (such as product reviews, information, and coupons) while still
shopping in the physical store. This is seen as a bridge between the gap created by e-commerce
and in-store shopping, and is being utilized by physical retailers as a way to compete with the
lower prices typically seen through online retailers.
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M-commerce In Bangladesh
Companies Practicing M-commerce
Bangladesh proved to have a great market potential in telecommunication section. With it rapid
growth it has become a great opportunity to generate revenue as well as to do any type of
business through the help of this. With a population of 147 million with 27million working
phones, the growth for telecommunications is huge. Since the introduction of mobile phones in
1996 it has topped 25 million subscribers.
Currently there are 6 major telecom companies in Bangladesh telecommunication industry.
Grameen Phone, Airtel, Banglalink, Robi, Teletalk, Citycell are operating their business and
shows huge growth.
GrameenPhone (www.grameenphone.com), majority owned by Norwary’s Telenor. It launched
its GSM network in 1997. It pioneered a much-admired micro-credit program enabling
consumers, primarily women in rural areas, to acquire phones and establish local public call
offices (PCOs). As significant, Grameem struck an exclusive deal with the state railways
corporation for dark fiber, and quickly completed a nationwide high-speed footprint to connect
its remote base stations.
Orascom telecom bangladesh limited ("banglalink") is fully owned by orascom telecom holding
s.a.e, egypt, ("oth"); the ultimate parent company of the group is vimpelcom, the 6th largest
mobile phone operator in the world. banglalink attained 1 million subscribers by december
2005 and 3 million subscribers in october 2006. in less than two years which is by december
2007, banglalink overtook aktel to become the second largest operator in bangladesh with
more than 7.1 million customers. banglalink currently has 20.05million subscribers as of april
2011, representing a market share of 27.03%.
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Robi Axiata Limited is a joint venture company between Axiata Group Berhad, Malaysia and
NTT DOCOMO INC, Japan. It was formerly known as Telekom Malaysia International
(Bangladesh) which commenced operations in Bangladesh in 1997 with the brand name AKTEL.
On 28th March 2010, the service name was rebranded as ‘Robi’ and the company came to be
known as Robi Axiata Limited. Robi crossed 10 million subscribers mark in 2009.
“Citycell” - Pacific Bangladesh Telecom Limited (PBTL) (http://www.citycell.org/), first deployed
an AMPS infrastructure and has recently upgraded to CDMA 800, the only provider using the
technology in the market. Citycell has also constructed an SDH microwave network connecting
Dhaka - Chittagong and Dhaka – Sylhet. Citycell has approximately a 14 percent market share.
The Areas of M-commerce
Mobile devices are widely accepted due to the convenience and it will evolve into “personal
trusted devices” which pack users identity, purchasing power and benefiting various aspects of
their daily lives. It plays an important role for users in order to facilitate the vision of an
intelligent ambience, by collecting and communicating various personal habits and preferences,
and enabling their environments to sense and react. Wireless communications and services are
enabled by the convergence of two technologies, the Internet and wireless technology such as
mobile phones and personal digital assistant. And today's mobile devices fulfill this need for
real-time information and communication independent of the user’s location.
A user can connect to the Internet wherever and whenever they want since the mobile Internet
has unique strengths over the stationary Internet. Abundant information has indicated the
proliferation of wireless Internet via mobile devices which is creating unparalleled opportunities
for m-commerce to leverage the benefits of mobility. It allows consumers and businesses to
build connectivity by transcending time and place, increasing accessibility, and expanding their
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social and business networks (Liu et al., 2003). Therefore, the proponents claim that the m-
commerce will surpass e-commerce in growth and scale because of the enhanced mobile
internet attributes.
Mobile Financial Services
The rapid pace adoption of next-generation mobile handsets has created opportunities for new
and innovative mobile services. One of the most promising, while still marginally adopted, are
mobile financial services. The wide penetration and personal nature of mobile phones, the
overall stability of mobile communication technologies, and the positive experiences with m-
commerce payments have made mobile solutions applicable for a variety of financial services.
Today, almost every telecom company in Bangladesh introduced mobile payments system.
Mainly mobile are used to pay for popular mobile content and services since there are few
alternative payment solutions available. More generally, security and convenience have been
suggested as the key drivers for the growth of m-commerce. Personal mobile devices are
effective in identifying the payer and confirming the transaction. Despite the claims of
insecurity, the users seem to be willing to use quite simple mechanisms. Lots of transaction are
being introduced by Bangladeshi Telecom Company, such as the money transfer from mobile to
mobile, bill payment, banglalink money transfer from abroad to Bangladesh, etc.
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Mobile Payments
Mobile payments are expected to become one of the most important applications in m-
commerce. M-commerce involves m-payment, which is defined as the process of two parties
exchanging financial value using a mobile device in return for goods or services. Therefore, a
widespread use of mobile phone has emerged a number of payment schemes which allow the
payment or goods/services from the mobile device.
Micro-payments can be implemented when a user make a toll call equal to the cost of item
paying via wireless vending service. Another way of micro-payment is to buy prepaid numbers
from a service provider, bank or credit card company and transfer the payment. Remote mobile
micro payments enable purchases of mobile content and services such as news, games, tickets,
and location-based services. Almost every telecom company in Bangladesh introduced this
Mobile payment system. Grameen Phone introduced Electricity bill Payment, Gas bill payment,
BD Railway E-ticket, Etc.
Information Search
After the bursting of dotcom bubble, e-commerce has gone downwards to hell. But the
evolution of mobile commerce has again worked as ambrosia for them. A separate sector has
been evolved to exercise on this field for the IT experts. The webmasters have skilfully exploited
this new area of IT-enabled commerce.
In the IT field, mobile commerce has been used massively to deliver financial news, stock
updates, sports figures and traffic updates and many more onto a single handheld device
'mobile'. Almost Every company have this information search facilities. News alerts, Different
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seasonal Festival alerts, such as “Ramadan timing”, Namaz schedule, sports alerts or
information, social networking alerts, etc.
Mobile Banking
Mobile banking services are valued by users because of the inherent time and place
independence, and the overall effort-saving qualities. Mobile banking services enable users to
receive information on their account balances via SMS. The new WAP and Java- enabled mobile
phones using General Packet Radio Service (GPRS) support a wider variety of banking services
such as fund transfers between accounts, stock trading, and confirmation of direct payments
via the phone’s micro browser. The mobile services are typically modified versions of the
Internet banking services of the particular bank and the architectures are backed by several
banking industry consortiums.
Mobile Bank Service Provider Several banks have introduced successful mobile financial
services for smart phone users. Some bank provides users with a wireless banking application,
which is built using the same back-office infrastructure as its Internet bank. City Bank has
started their mobile banking system in order to provide advanced customer service.
Mobile Advertising
Mobile advertising is a very important class of m-commerce; it augments location information
with personalization and delivers the obtained history of user’s purchases habits. Advertising on
mobile devices has large potential due to the very personal and intimate nature of the devices
and high targeting possibilities. By keeping track of user’s purchasing habits and current
location, a targeted advertising campaign can be performed. Messages can be sent to all users
who are currently in a certain area (identified by advertisers or even by users) or to certain
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users in all locations. Depending on interests and personality types of individual users,
advertisers could decide whether a “push” or “pull” form of advertising is more suitable. Most
users did not mind being pushed for mobile location-aware services information, as long as
they really needed the information.
A location-aware or location-based service is a service where a user’s behavior is mostly driven
by location information. And proximity-triggered mobile advertising is a special case of location-
based notification services. Notification services are user-driven, e.g. getting a notification
when a set of conditions is met. On the other hand, advertising is typically not user-driven, i.e.
the recipient does not request or pull the advertisements from a server, but they are pushed to
him/her instead. These services utilize a user’s location to provide location-aware content
including information on restaurants, devices, users, and products. When a mobile user enters
an area, the list of services and location information can be provided based on current
preferences or the history of choices. For instance, one user might be interested in knowing the
availability and waiting time at one or more restaurants close to his/her current location (pull).
Another user might like to be informed when one of his/her friend is located in the same
general area (push).
Mobile Advertising Service Provider such as Airtel, GP, Teletalk are doing this kind of
advertisement. Companies itself new product & service promotions, government promotions,
NGO promotionsn etc are been advertised widely in Bangladesh. To create a uniform set of
guidelines for wide scale use of mobile advertising, the Advertising Association and Marketing
Association merged together.
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Mobile Entertainment
Mobile entertainment (m-entertainment) is concerned with providing amusing and enjoyable
services for users via wireless technology to mobile devices. Most people make some form of
traditional ‘pure’ entertainment part of their daily lives, bringing these forms of content to
mobile devices is an appealing notion. Mobile entertainment is a Business-to-Consumer service
which is done during leisure time. Mobile Entertainment Services and Games (B2C) are
applications providing entertainment services to users on a per event or subscription basis.
These include video- on-demand, audio-on-demand, and interactive games. These companies
offer songs, callertune service, videos, animations, love quotes, jokes, etc.
Mobile Gaming
Mobile devices offer the opportunity to play games nearly everywhere. Moreover, networked
games allow individual players to interact with other people and to participate in a larger
gaming world, which also provides for new business opportunities. Advances in mobile
computing and wireless communication technology enable the creation of games with
appealing graphics and game play on a variety of mobile devices ranging from smart-phones to
PDA’s and other portable computing devices. Therefore, the popularity of mobile games played
on portable handsets is increasing and the huge possibilities for growth in this area are already
being taken seriously by traditional “mobile telecommunications” handset vendors. Device
makers are designing GSM handsets with hardware and user interfaces specifically designed for
gaming as exemplified by Nokia with their recent N-gage device. In essence these new devices
offer players the ability to play head to head with their friends or any other players at any time
and in any place.
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Mobile Music
A key advantage of mobile music is having user’s phone and music player in the same small
device. Nokia has developed many mobile phones with integrated technologies to play music,
either from a digital music player or an FM stereo radio. A user can hear Stereo FM radio, tune
in to visual radio to see the screen of mobile device, listen music as well as to download digital
music tracks in AAC format. Instead of carrying a MP3player a user can carry a mobile phone as
a substitute. Mobile music has become an important area of digital services for customer
convenience and their convenience is considered as a key. Nokia have together developed a
mobile music service for mobile device users, where they can purchase digital music in a
protected file format. The music bought from the online music store is downloaded to the
user's computer and then transferred to the device. Apple as well provides the same service
through its istore.
Mobile Shopping
Mobile extends users ability to make transactions across time and location and creates new
transaction opportunities. It is important to note that only a part of the purchasing process is
conducted with the mobile terminal. The basic point is that user needs to know what he/she
wants in advance of making a mobile purchase. Moving forward, it seems most likely that a
shopping list might be created with a web interface, which may then be executed from a
mobile. At the current stage of technological development the customer must ideally be faced
with a one-button purchase experience for mobile shopping. The purchase suggestions will
often be based on the user’s past behavior patterns. “Cell bazaar” is a live example introduced
by Grameen Phone to begin this sort of M-commerce.
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Mobile Retailing
Mobile retailing is an interesting m-commerce application to use a Smartphone to order pizza
from a delivery service; this might be even more appealing than ordering the pizza via internet,
because it takes a long time to boot the PC or a PC might not be available. M-commerce
combined with location identification creates new value, for example, when ordering a taxi or a
pizza the vendor can automatically know where the service is to be delivered. However, there
will be a large space for e-retailers to become m-retailers, when the personalization and
location issues are well addressed. Books, CDs and groceries are often items, which the user
knows well and where he needs just a tool to make a purchase. The purchase will be made
when the user has spare time, independently of the shop opening hours and physical location.
Lots of retail shop give different seasonal gift if the consumer posses a certain telecom line,
even order from some precise telecom subscriber give special discount.
Mobile Ticketing
Mobile electronic purchase or reservation of tickets is one of the most compelling proposed
services, because ticket reservation/purchasing is hardly a pleasant expertise today. Either one
has to go in person to a ticket booth, or has to call an agency or the outlet. Calling outside
opening hours means having to go through a lengthy process. It is clearly more convenient to
select and book tickets directly from the mobile device, because often the decision to purchase
is made while outside or on the move among friends. Grameen Phone E-ticket in Bangladesh
railway is a start of this kind of M-comerce.
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Short Message Service (SMS)
Text messaging is one of the simplest and most useful means of mobile communication (Nokia,
2001). Since 1992 Short Message Service (SMS) has provided the ability to send and receive text
messages via mobile phones. Each message can contain up to 459 alphanumeric characters
(Nokia, 2005). After historically finding it was expected that SMS will show rapid further growth
with the number of messages doubling every half a year, during the year 1998 SMS started
suddenly to explode in the GSM markets. In October 1999, there were about 2 billion SMS
messages sent per month within the GSM world, and more than 50 billion SMS messages were
sent across the world's GSM networks in the first quarter of 2001 (Nokia, 2001).
About 90% of SMS messages are voice mail notifications or simple person-to-person messaging.
The rest is mobile information services, such as news, stock prices, sport, weather, horoscope,
jokes etc. Additionally, SMS e-mail notification, SMS chat and downloading of ringing tones has
been offered recently in several markets. SMS is an ideal technology for pushing information
from one-to-one or one-to-few. SMS will benefit from the hype created with the arrival of WAP
and many m-commerce applications will be initiated using both SMS and WAP as a platform.
Wireless Application Protocol (WAP)
The WAP is a communication standard that enables portable electronic devices to receive and
interpret data. Public access to the Internet commenced in 1990 but the WAP commenced in
1997. In 1999, a variety of WAP enabled products were released and made numerous
opportunities in communication system. WAP is one of the key enabling technologies of m-
commerce as it allows mobile users to access the Internet from a mobile device. It makes
possible the introduction about the novel ideas of m-commerce, which is specifically designed
for the mobile user, and takes full advantage of distinctive characteristics. Airtel WAP, GP WAP
and almost every telecom company have given this facility in exchange of a very competitive
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cost.
Figure: Access to information at WAP enabled phones from any telecom operators in BD.
M-Commerce Practiced in India
From the Tatas to the Ambanis to the Bhartis, the biggest companies are in the
telecommunications arena. India is the second largest mobile handset market in the world. Just
name an international telecom brand and it is in India. Nokia, Qualcomm, Sony, Motorola just
name it and it is here. Other biggies are on the way setting up base in India. According to
reports the total market for handsets alone was valued at Rs.8.05billion (US $2billion) in 2005
and this will surge by 62% with approximately 100-million subscribers nationwide by 2007. In
the last five years the mobile has literally been a part of the upward mobility of the average
Indian. The chaiwala, the taxi wala, the farmer, the housewife, the kabadiwala, just about
everyone has a monthly budget to keep their mobile phone alive. According to current
estimates there are 100 million plus users. Early 2006 approximately 98 million (Trai March
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2006) people in India owned mobile phones. Late last year in a single month 2.9 million new
Indian mobile phone subscribers added: the GSM subscriber base grew by 2.11 million users
(for a total of 65 million) and the CDMA platform added 0.8 million (for a total 20 million).
The leaders of telecom in India, Reliance and Airtel have taken the lead in offering m-commerce
services. From bill payments to airline and railway ticketing to booking movie tickets and other
random services, the services providers offer it all. There are lots of section in m-commerce
India is leading ahead of Bangladesh. Some of these section in which Bangladesh is lacking
behind are:
Advance payment system: From paying any restraurent bill to almost all utility bills.
PayMate allows mobile subscribers to make
payments for merchant services using their cell
phones. It is connected to merchants and banks
to enable transactions. What’s more it does not
require any additional software or SIM upgrade
to process transactions.
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Mobile Auctions : It includes applications that allow users to buy or sell certain items using
multicast support of wireless infrastructure. These applications require that group membership
not be adversely affected by brief wireless disconnectivity or intermittent connectivity as
observed in many wireless networks of today.
Third generation (3G) Technology: This Application services include wide-area wireless
voice telephone, mobile Internet access, video calls and mobile TV, all in a mobile environment.
Through this technology India’s telecom companies introduce lots of m-commerce and almost
every service is being dependent through this technology.
Other M-commerce Services
Online Buying
Online Shopping
Advanced Mobile Financial Services
Micro-payments
Macro-payments
Advanced Mobile Banking
Fund Transfers between accounts
Stock Trading
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Bangladesh a huge potential market for more
advanced m-commerce
Everyday the use of mobile subscriber and the use of mobile services are increasing.
Bangladesh has been already proved a great potential market for mobile telecom service. As a
result a huge growth has been seen in last few years in m-commerce. But there are yet now lots
of section in m-commerce which can be flourished. The introduction of 3G technology will take
Bangladeshi Telecom Company to a new stage and by which lots of innovative new and existing
technology can be introduced. More deeper, new user friendly technology and cheap m-
commerce can certainly help the whole country economy and life style to improve. The two
things which will help to accelerate this M-commerce are Customer Trust in M-commerce and
the Security Challenge in M-commerce. Wireless network is a common trouble in Bangladesh
that often causes customer’s suffering during communication. But there are some mobile
service providers who have cover the whole network system around Bangladesh and therefore
wireless network problem is reducing now. Here the companies should create a positive sense
about this technology and as far as possible safe and reliable transaction. This will help the M-
commerce to boost up to a new stage. Sending SMS and getting instant deduction from her
mobile is acceptable but buying products and divulging her credit card details with in a wireless
environment is rather risky secure transaction environment is a common phobia in Bangladesh
to adopt the m- commerce properly. The government infrastructure is really lousy due to the
high rate of corruption. Therefore, the adoption rate of a utility bill payment with mobile device
is still at a slow pace. So the service provider has to gain the trust of general users that the
transaction environment with a mobile device is secure then there would be a possibility of
advanced m-commerce adoption in Bangladesh.
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