TOKYO-Mobile Internet shopping is no longer a futuristic idea, but a daily practice, at least for early adopters in the browser phone-advanced nation of Japan.
The Ministry of Posts and Telecommunications estimates the Japanese mobile-commerce market will expand from 4.2 billion yen (US$35.8 million) in fiscal year (FY) 1999 to 1.1 trillion yen (US$9.4 billion) in FY 2005.
Among the more than 33,000 i-mode sites, there are many kinds of virtual stores, from movie ticket sales to boutiques selling clothes to rare food stores.
Content services have been the first successful m-commerce businesses over i-mode. Bandai’s charappa service that allows a subscriber to receive a cartoon character every day and Yamaha’s meloccha music service are hits in Japan. Subscribers download either characters or so-called chakumelos, or short music pieces, via their phones and pay 100 to 300 yen (US$0.86 to US$2.60) in monthly subscription fees.
Another successful m-commerce model is information services provided by news companies and stock brokers. Almost all major newspapers and television stations in Japan provide news sites for i-mode, and major stock brokerage houses offer stock price information and services. They typically charge 100 to 300 yen per month in return for providing near real-time news and information.
In the first phase of m-commerce services, such content offerings took off. But recently, merchandise-selling sites are becoming more popular.
Some sites, such as concert and movie ticket and airline ticket sites, have large numbers of users accessing the sites. But most of the sites limit their services to providing just information or taking reservations, while actual sales and payments are done at real stores.
Several factors are limiting the expansion of m-commerce in Japan. In the case of content provider services, NTT DoCoMo collects fees for content instead of content providers. Industry professionals have said this collection service model is one of the biggest factors for i-mode’s success.
However, in the case of merchandise sales, NTT DoCoMo does not collect the purchasing costs. Credit card settlement might be useful for such services; however, Japanese tend not to use credit cards for payment over the Internet for security reasons.
Also, the small screen sizes of mobile phones restrict the amount of data that can be viewed. With PCs, shoppers can see photos of merchandise; however, it is hard for mobile shoppers to get images of merchandise over tiny cellular phone screens.
In addition, three mobile carriers in Japan are deploying different systems, so content providers have to modify their content to fit each carrier’s standard.
However, recent technological innovations may help m-commerce take off. The multiplatform concept is gaining popularity in Japan. People tend to use not only mobile phones, but PCs, personal digital assistants (PDAs) and other devices. Payment systems are also being established.
Some sites started using convenience store outlets for settlement and pickup bases for their m-commerce applications. NTT DoCoMo last year tied up with Lawson, a major convenience store chain in Japan, and launched settlement/ pick-up services.
NTT DoCoMo in February launched Java services. Using Java-enabled mobile terminals, users can settle their payments under highly secure environments. As a next step, NTT DoCoMo is planing to provide terminals with integrated circuit (IC) chips built in, allowing payment via mobile devices.
