Mobile Commerce in Developing Countries Essay

Mobile Commerce or M-commerce as it is more commonly referred to is simply the ability to do business electronically without any physical limitations or barriers. This is more popular with the use of smartphones today and other mobile devices. After researching several journals and articles, it is obvious at this point that there is no standard definition of the term â€Å"Mobile Commerce. † Many authors and writers have coined phrases and come up with definitions that are similar to each other; the general idea is similar but the words in the different definitions vary somewhat. However, one acceptable definition is used and this comes from Liang and Wei (2004), â€Å"M-Commerce generally refers to the use of wireless devices (particularly mobile phones) to conduct electronic business transactions, such as product ordering, fund transfers, and stock trading† (p. 7). M-Commerce was formed as a result of the Internet and mobile computing coming together to create a new business area. The benefits of Mobile Commerce are almost endless and a few will be discussed later in the analysis. However, the focus of this paper is the emergence of this trend in developing countries with emphasis on Africa- Nigeria to be precise. The population of Nigeria is over 150 million boasting one of the largest markets in Africa. Akpan-Obong (2009) states that â€Å"Nigeria is a major actor in the Information and Communication Technologies (ICT) sector in Africa, Nigeria has so far recorded significant achievements in ICT utilization, and has recorded higher growth rates in the penetration and diffusion levels of ICT† (p. 208). With Mobile Commerce rapidly taking over the business world, it is important to gain an understanding of how the so called major actors are fairing on the playing field hence the emphasis on Nigeria in the topic of Mobile Commerce. Article Summaries Liang (2004) and Akpan-Obong (2009) in their separate articles introduce the concept of Mobile Commerce and present generally accepted definitions of the term. While Liang focuses on the likely successes and failures of M-Commerce applications, Akpan-Obong specifically suggests electricity and infrastructural inadequacies as the reasons for the underutilization of M-Commerce in Nigeria. Greengard (2008) goes on to discuss the general impact of mobile phones on the world as a whole. He talks about the development opportunities that the presence of mobile phone technologies has created with the transformation of commerce, banking and healthcare. In his article, he states that the most profound changes and biggest dividends are being realized in developing countries. Formulation of a series of hypotheses from a research model developed by Peter, Philip and Victor (2005) identifies some of the factors affecting the use of mobile ICT in the least developed countries. Ayo and Agboola (2006) delve into the uses of M-commerce in Nigeria and how this technology is becoming widespread in the country. Solutions are also offered to deal with the issues of underutilization of the technology. Generally, these articles discuss the current practices and also anticipated future implementations of M-Commerce. The Internet, which is a form of electronic commerce has been in existence for years but it has been difficult to cover as much of the market as it could especially in some parts of the world where amenities like a computer are not only unaffordable but considered a luxury. With the emergence of mobile phones, â€Å"an important fact to consider is that M-Commerce is gaining relevance because the penetration of mobile phones is much larger than the penetration of Internet access (Duffey, 1998) in most countries. Greengard (2008), highlights a few of the relevant uses of this technology: â€Å"Although mobile phones have already transformed the more affluent nations, they are ringing up some of the most profound changes- and biggest dividends- in developing countries. Today, people are using mobile phones to track crop prices in Kenya and manage micropayments in the Philippines. They are tapping into these devices to handle healthcare information in Nicaragua and oversee bakery orders in Nigeria† (p. 17). Gone are the days when Africa as a whole was considered backward and inconsequential when it came to matters of technological advancements, infrastructure and amenities. Like most developing countries, Nigeria in particular has not yet implemented M-Commerce on a full scale. However, the trend is beginning to emerge with the appearance of mobile phones in every nook and cranny of the country. Now, unlike before, devices like mobile phones are no longer seen as sacred or only for the rich and famous in society. Rotberg was spot on when he stated, â€Å"it is the first time in the history of technology that social class and geography are largely irrelevant† (as cited in Greengard, 2008, p. 18). Almost anyone who is of talking age owns a cell phone in Nigeria. From the executives at the renowned industrious firms, the students attending public schools who cant even afford to buy textbooks and even the farmers in the villages and rural areas; the fishermen selling fish at the local market and even the housewives who grow vegetables and cultivate livestock in their backyards. Owning a mobile phone is no longer considered a luxury and does not cost an arm and a leg like it used to only a few years ago. This singular reason that the phones are now easily affordable and available for purchase by every Tom, Dick and Harry is what has fostered the emergence of Mobile Commerce in Africa, Nigeria to be precise. With the mobile phones gaining more popularity with the people in Nigeria, so also has the technological benefits been exploited. The wireless handheld devices have orchestrated the use of e-banking services in Nigeria. According to Ayo et al. (2007), â€Å"virtually all the 25 banks that survived the recent capitalization exercise engage the use of ICT as a platform for effective and efficient delivery of banking services. Consequently, electronic cards, Internet banking and mobile banking services are gradually being introduced. However, M-Banking activities are limited to mobile finance information, download or ringing tones and music as well as telematic services, particularly, vehicle tracking, theft protection and emergency services† (p. 13). As more and more advancements are pursued, banking will become not only flexible but also more convenient. Customers now have the luxury of checking their bank accounts on their mobile device without having to take a trip to the local branch of their banks nearest to them. They also enjoy the comfort of immediacy, information at their fingertips. The banking sector is one of the first and more important aspects of Mobile Commerce that has emerged in Nigeria. However, there is also much hype about the little things that are being derived from this technological advancement. Ayo et al. (2007) states emphatically â€Å"the success of M-Commerce has partly been due to developments in mobile communication techniques. Cellular networks were originally designed for voice-only communication. To support M-Commerce transactions, which are data based, there has been an evolution of these networks from analogue to digital and from circuit switched to packet switched networks. Today a number of these mobile communication technologies are available† (p. 11). Some of the strengths of Mobile Commerce in Nigeria are attributed to the GSM operators and the services that they render to their customers. The three major operators are MTN, Celtel and Globacom. Their services include: Voicemail, WAP services, SMS, customer services, call forwarding, international dialing, Celtel mobile office, faxmail, roaming, customer care and Broadband Internet Access that offers Broadband Internet to residential users just to name a few. These services allow customers to derive utmost satisfaction from the emerging trends in the advancement of Mobile Commerce. In his article, Greengard (2008) talked about one incidence in particular. â€Å"A Nigerian baker started taking orders for cakes via SMS and quickly expanded his presence beyond his immediate neighborhood. He experienced a 30% increase in sales† (p. 17). Many small-scale businesses are now enjoying the benefits of this technological advancement and they are using its features to broaden the scope of their businesses and gain competitive advantage over their competitors in the industry. If not for anything else, the customer relationship that exists between the business owners and their customers has been strengthened by the ability of the owners in providing their services directly to the consumers via these mobile handheld devices. The emergence of Mobile Commerce in Nigeria has brought with it both advantages and disadvantages. As with the mobile banking, of course it is fast, convenient and nowadays very affordable, there is also the threat of security and the complex systems and expertise needed to run some of the programs. There is a gap between those who are more technologically savvy and the layman who grows crops on his farm. This gap in knowledge does not allow the features on some of these hand held devices to be fully utilized. The phones being so affordable that even the most basic of the devices could probably browse the Internet assuming all the features are purchased, makes it likely that the phones are being underutilized to the most of its capabilities. Most senior management and more well to do individuals are more concerned about the security of their transactions over this mobile devices. Research by Agboola (2006), revealed â€Å"38. 2% of the respondents considered security as a major threat, while 4. 3% and 5. 4% considered complication of services and cost respectively as other factors† (p. 3). Apparently, the cost of mobile telephone service is higher in Nigeria than other African countries so it only reasonable that the cost of this service would be a major threat to Mobile banking as a whole. Another threat is the unavailability of basic infrastructure to support this system such as electricity, among others. The lack of electricity as a basic infrastructure in Nigeria has a ripple effect because it affects every device that makes up the system. Without electricity, individuals cannot charge their mobile phones when the battery is depleted. This in itself, defeats the purpose of Mobile Commerce, as there is no fulfillment in owning a phone when you cannot use it when you want to. The systems in the banks that perform the updates to customer accounts and provide information to the customers would also shut down as a result of lack of electricity. Automated Teller Machines (ATMs), which are one of the first occurrences of Mobile Banking in Nigeria, would have to be shut down as well. With all the features of the mobile phones these days, it is only a matter of time before the developing countries of Africa begin to enjoy all of the benefits that countries like America are enjoying now. Although, seeing as how the advancement in America has not come to a halt, it is more than likely that developing countries would always play catch up. However, countries grow at different paces so it is only wise to perform according to the capabilities of the systems set up in the country until it can withstand the test of time. Synthesis Mobile Commerce as a concept has a lot of prospect for patronage dependent on the available services. First of all, there were no mobile phones at all in a country like Nigeria and then mobile phones were introduced and the craze cannot be contained. Now, the monumental growth of mobile devices all over the world, with over one-third of the world population having access to it has given prominence to M-Commerce. With technological advancements emerging everyday in different areas and industries, Mobile Commerce can only get better as more provisions are made to handle the loop holes and reduce the threat that are presently facing the market. There would most likely come a time when Mobile Commerce is not only the fastest way of doing business but the most common, the most trusted and also the safest. It would soon become a way of life. According to Peter et al (2005), â€Å"the country had experienced a phenomenal growth from a teledensity of 0. 49 in 2000 to 25. 22 in 2007. This trend has brought about a monumental development in the major sectors of the economy such as banking, telecoms and commerce in general† (p. 140). Nigeria, being the fastest growing telecoms nation in Africa and the third in the world, it is almost inconceivable to imagine how much is yet to come by way of technology and other infrastructure. Today, African countries may be struggling to hold their weight in the area of technological advancement in comparison with more advanced countries like the United States. Tomorrow, the tables might just be turned. One can only wait and see, behold the future!