What Hooks M-Commerce Customers?

By some estimates, today's 533 million Internet users will mushroom to over 1.4 billion by 2007 — a vast potential market for e-commerce-savvy companies. Favorably inclined toward expanding their online access to goods and services, these users are steadily migrating to wireless technology, such as data-enabled cell phones. Currently about 16% of Internet users, wireless users are projected to total nearly 57% of users worldwide by 2007.

Even the United States, to date tradition-bound by its extensive fixed-line communications network, is shifting toward wireless means of communication. In 2002, Forrester Research speculated that within five years up to 2.3 million conventional phone subscribers will switch to wireless technology, resulting in an average of 2.2 wireless phones per U.S. household by 2007.

What affects whether these mobile users will actually transact business using wireless technology? Where better to ask than in Hong Kong, where the mobile-phone penetration rate is close to 89% — an impressive 5.77 million people?

Three researchers at the Chinese University of Hong Kong set out to identify which of three factors most significantly affect both simple m-commerce transactions (requiring short expenditures of time and little financial risk, which the authors refer to as “low involvement” transactions, such as buying movie tickets) and more-complex m-commerce transactions (demanding more effort and financial risk on the part of the customer, which the researchers term “high involvement” transactions like making stock trades).

Taking a cue from earlier studies of conventional, PC-based e-commerce, in the June 2002 paper “Product Involvement and the Importance of Factors Affecting Mobile Commerce,” associate professor of marketing Alan C. B. Tse and research assistants Frederick Hong Kit Yim and Ka Ho Tse investigated aspects of m-commerce related to convenience, Web-site design and financial security. They interviewed 192 people at three high-traffic shopping malls in Hong Kong where customers span the major socioeconomic groups.

The authors asked the randomly selected participants to evaluate the importance of convenience, site design and security in mobile commerce when presented with two situations —buying a movie ticket or conducting a stock trade online. For each scenario, before respondents indicated the likelihood of their using the channel for either transaction, the features and functionalities of the phone and Web site were described. Respondents replied within a seven-point scale about the importance of each factor.

The survey results show that, in many respects, m-commerce extends the qualities of a PC-based e-commerce experience.