Analysis of M-commerce Business Models

Background:

Mobile commerce is a very promising emerging industry. Similar to other emerging

industries, it is characterized by a large number of technological, demand and strategic
uncertainties. This paper focuses on the strategic uncertainties, where a large number of
participating actors are trying to position them in the most favourable position in the value
system. As a consequence, they are experimenting with a number of innovating business
models. Successful business models are likely to be the ones that best address the economic
peculiarities underlying this industry, like mobility, network effects and natural monopolies.
The paper presents the principal classes of actors that will participate in the mobile business
industry and give an overview of their business models.
The phenomenal growth in the use of cellular phones and, more recently, also of wirelessly
enabled Personal Digital Assistants (PDAs), is giving rise to yet another revolution in the
business world. This revolution is focused on conducting business on the move or mobile
commerce (m-Commerce). This trend is fuelled by a consumer interest in being able to access
business services or to communicate with other consumers anytime and anywhere. It is also
motivated by the interest of the business community to extend their reach to customers at all
times and at all places. These needs are outlined in Figure, which also shows the
relationships among these needs. Thus, connectivity is the main need, because it provides the
basic platform where wireless communications could take place, and communication in
various forms is required to address the information, commerce and entertainment need areas.
Consequently, concerns surrounding connectivity and communication are also likely to affect
the remaining consumer needs. All five needs are discussed in more detail below along with
associated consumer concerns. There are five primary needs that yield demand for m-
Commerce services. These are: connectivity, communication, information, entertainment,
and commerce (Cole, 2001). These five needs stem from the mobility associated with the
enabling devices, so the context for each of them revolves around the theme of anytime,
anywhere accessibility.
There are five primary needs that yield demand for m-Commerce services. These are:
connectivity, communication, information, entertainment, and commerce (Cole, 2001). These
five needs stem from the mobility associated with the enabling devices, so the context for
each of them revolves around the theme of anytime, anywhere accessibility. These needs
are outlined in Figure, which also shows the relationships among these needs. Thus,
connectivity is the main need, because it provides the basic platform where wireless
communications could take place, and communication in various forms is required to address
the information, commerce and entertainment need areas. Consequently, concerns
surrounding connectivity and communication are also likely to affect the remaining consumer
needs. All five needs are discussed in more detail below along with associated consumer
concerns.

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This paper is a first step on the development of a methodology to enable the analysis of
business models and the identification of potentially profitable sources of revenue. This
research proposes that value networks and control points are the means for carrying out this
analysis. The novel approach is given in the knowledge that whilst the tools, discussed in this
paper, have only been used [10, 11, 23] individually in the past to analyse revenue models
within the telecommunications industry, it is an incremental extension to combine them to
study the mobile Internet as a generative ecosystem. The premise of this paper is that drawing
upon concepts sourced from cyberlaw specialists such as Lessig, Benkler, Zittrain, a
powerful unit of analysis can be developed. Although cyberlaw knowledge is used to identify
how the Internet can be controlled to prevent abuse, whilst maintaining its generative essence
for innovation, the knowledge can be applied for commerce in the mobile Internet. The
overall goal is to control the mobile Internet for profit whilst retaining its generativity. Whilst
methods proposed in this paper to carry out analysis of the mobile Internet are grounded in
concepts from cyberlaw and a brief example of analysis of the subset of the mobile Internet,
that is the Apple App Store, was presented, further work needs to be carried out. It is
proposed that further data is collected through interviews, so that case studies of mobile
Internet platforms can be generated and analysis of value networks and control points carried
out. This analysis may be able to inform actors within the mobile Internet as to how
profitable revenues can be generated. Understanding of where and how controls points in
value networks can be tightened or loosened is an area of research where there is a keen
interest for all actors involved in the mobile Internet ecosystem, and in particular for mobile
operators.

Literature review

The field of wireless networks combined with mobile technological advancements has made
smooth inroads into the lives of the common citizens. While electronic commerce (E-
commerce) continues to impact the global business environment, technologies and
applications have begun to focus more on mobile computing and the wireless web. In simple
terms, M-commerce=E-commerce + Wireless Web (Tandon et al., 2003).

What is E-Commerce?

The term commerce is described as buying and selling of goods and services (Frolick &
Chen, 2004). Especially in the last ten years, commercial activities that are performed online
have become highly efficient and effective for companies and customers. Following their
definition of commerce, Frolick and Chen (2004) defined e-commerce as selling goods and
services on the Internet. R. Tiwari, Buse, and Herstatt (2006) gave a similar definition for e-
commerce as buying and selling of products and services over the Web, specifically
mentioning buying in addition to selling.
Oppong, Yen, and Merhout (2005) explain the concept of e-commerce in a more detailed
way; as it includes activities such as electronic exchange, delivery, and/or transaction of
information, goods, services, and payments over telecommunications networks, primarily the
web. Moreover, the authors state that e-commerce activities also include establishing and
maintaining online relationships between organizations and their suppliers, dealers/vendors,
customers/users, strategic partners, regulators, and other agents related to or who support
marketing, delivery, and distribution. R. Tiwari, Buse, and Herstatt (2006) categorized e-
commerce definitions within two major categories. The first one represents the definitions
that are constrained with the monetary value of transactions. As an example, according to the
definition of the German Federal Statistics Office, Transactions are regarded as e-commerce,
when the offer as well as purchase or the actual availment of a product or service is carried
out in electronic form, using a computermediated network against monetary payment.
Kaynak, Tatoglu, and Kula (2005) also define ecommerce as any economic transaction
where the buyer and seller come together through the electronic media of the Internet, form a
contractual agreement concerning the pricing and delivery of particular goods and services,
and complete the transaction through the delivery of payments and goods or services as
contracted. However, these definitions are interpreted as too restrictive since they do not
cover activities that may be performed before and after the commercial transaction that dont
have any monetary value for companies and/or customers. The second category of definitions
does include non-monetary activities. For example, Mesenbourg (2001) defines e-commerce
as any transaction completed over a computer-mediated network that involves the transfer of
ownership or rights to use goods or services. Completed transactions may have a zero price
(e.g., a free software download). In other words, the ecommerce concept also covers
transactions without monetary value as long as the service/product is being provided to
customers. Furthermore, Varadarajan and Yadav (2002) define e-commerce as a networked
information system that serves as an enabling infrastructure for buyers and sellers to
exchange information, transact, and perform other activities related to the transaction before,
during, and after the transaction. Finally, Maamar (2003) define ecommerce as a general
term for any type of business, or commercial transaction that involves the transfer of
information across the Internet, while (Zott, Amit, & Massa, 2011) state that it describes
new gestalts and Internet-based ways of doing business. Although some people see the E-
business concept and the E-commerce concept as the same thing; we argue that these two
concepts are different from each other. E-commerce, by its nature, includes digitally enabled
commercial transactions between and among organizations as well as individuals. There is a
tangible exchange of value -mostly monetary- across the involved parties in return for
products or services. E-business, however, which is defined as business conducted over the
Internet (Amit & Zott, 2001), represents the business and operational transactions and
processes that are performed through the digital medium. E-business helps organizations to
optimize the flow of information between the departments as well as increase the accuracy,
quality and efficiency of the internal business processes and the digital communication
efficiency between companies. Even though the e-business components within an
organization may constitute the required infrastructure for potential e-commerce activities, it
aims to increase the efficiency and quality of the business rather than selling/buying products
and services.
There are various types of e-commerce, the most common ones being B2B, B2C, and C2C.
(Fang, 2002), states that e-commerce allows businesses to transact with each other more
efficiently (B2B) and brings customers closer to businesses (B2C). Oppong, Yen, and
Merhout (2005) mention the customer-to-customer (C2C) type for online commercial
transactions between individuals. However, Kaynak, Tatoglu, and Kula (2005) talk of three
major ecommerce types. The first one is the linking of a firm to its forward and backward
channel allies (e.g., retailers, distributors and suppliers), that is, [e-commerce] between firms
(B2B), whereas the second type is the commercial activities between firms and final
customers (B2C). The third type of e-commerce represents the management within the
enterprise, which focuses on supporting corporate activities and the integration of
departmental activities. Finally, Laudon and Traver (2014) suggest six types of e-commerce
including B2B, B2C, C2C, social ecommerce, mobile e-commerce and local e-commerce
with respect to the recent technologies used by businesses and individuals. The three major
types of the e-commerce are briefly discussed below.
Business-to-Business (B2B) E-commerce, considered as the largest form of e-commerce
(Laudon & Traver, 2014), focuses on the online commercial activities between businesses
without the involvement of individual buyers and sellers. Only in the United States, the
growth of this type of e-commerce has reached $5 trillion by the year 2014 and it is expected
to increase to $7 billion in 2017.
Business-to-Customer (B2C) E-commerce, which is the most common and widely
discussed type of e-commerce, represents the online commercial transactions between
businesses and individual consumers. It includes purchases of goods, services and other kinds
of content that can be provided online for consumers. Although the revenue of B2C ($419
billion by the year 2014) is not even close to that of B2B, it is still the type of ecommerce that
consumers are likely to encounter.
Costumer-to-Customer (C2C) E-commerce provides a medium for individual consumers to
sell or purchase products from each other. The medium here is generally an online market
maker/creator that provides a platform over the Internet with the help of Web 2.0
technologies, such as eBay1 and Craigslist2 . It is assumed that the size of the C2C global
market was over $90 billion by the year 2013 (Laudon & Traver, 2014).

Wireless Web
The wireless Web refers to use of the World Wide Web through a wireless device, such as a
cellular telephone or personal digital assistant (PDA). Wireless Web connection provides
anytime/anywhere connection to e-mail, mobile banking, instant messaging, weather and
travel information, and other services. In general, sites aiming to accommodate wireless users
must provide services in a format displayable on typically small wireless devices. It is
estimated that 95% of wireless Internet devices being manufactured today use the Wireless
Application Protocol (WAP) developed by Ericsson, Motorola, Nokia, and Unwired Planet
(now Phone.com) for presenting content. Wireless Web Broadband service works by
transmitting Internet data via RF, or Radio Frequency. This service is commonly known as
"Wi-Fi" - Wireless Fidelity. This means you don't require a telephone connection to connect
to our service.

What is M-Commerce?

Mobile Commerce (m-commerce) Benou, Vassilakis, and Vrechopoulos (2012) define

Mobile Commerce or m-commerce as any activity related to a commercial transaction and is
conducted via wireless and mobile devices as user interface, where the term user interface
is used to represent the functional layer between the user and the commercial transaction
instead of a particular user interface of a mobile application. A simpler definition by Zhang,
Yuan, and Archer (2002) states that m-commerce is about content delivery (notification and
reporting) and transactions (purchasing and data entry) on mobile devices. When trying to
define m-commerce, Lin and Wang (2006) considered the relationship between e-commerce
and m-commerce, and categorized m-commerce as a subset of e-commerce; new types of e-
commerce transactions, conducted through mobile devices (e.g., cellular phones, handheld or
palm-sized computers, and even vehicle mounted interfaces), using wireless
telecommunication networks and other wired e-commerce technologies, are termed mobile
commerce (m-commerce). Within a similar perspective, Barnes (2007) and Ngai and
Gunasekaran (2007) define m-commerce as the ability to conduct financial transactions
through wireless Internet-enabled devices. In addition, Kim, Chan, and Gupta (2007)
characterized m-commerce as basically any e-commerce done in a wireless environment,
especially via the Internet. Zhang, Yuan, and Archer (2002) also supported this definition
stating that m-commerce is the continuation of e-commerce with the palm handheld,
wireless laptops and a new generation of Web-enabled digital phones already on the market.
Even though the boundaries of commercial transactions are discussed in the literature in
terms of whether or not to include non-financial transactions, (Frolick & Chen, 2004) uses
the term mcommerce only for financial transactions that involve users and/or businesses.
According to Frolick and Chen (2004), the difference between m-commerce and mobile
information should be clear for organizations in order to identify the boundaries of their m-
commerce services. The term mobile information is used for the information that is provided
by an organization to its customers or employees through wireless data communication. The
intent of such mobile information service between two sides does not have to include any
commercial purpose. R. G. Tiwari et al. (2011) also define m-commerce as any transaction
with monetary value that is conducted over a wireless telecommunication network.
Similarly, Clarke (2001) defines mcommerce as the ability to purchase goods anywhere
through a wireless Internet-enabled device. Mobile commerce refers to any transaction with
monetary value that is conducted via a mobile network. It will allow users to purchase
products over the Internet without the use of a PC. As m-commerce is considered a subset of
e-commerce (Siau & Shen, 2003), some authors have stated the difference between the two
concepts within their definition of m-commerce. (Coursaris & Hassanein, 2002) and Frolick
and Chen (2004) define m-commerce as a natural extension of e-commerce as they share
fundamental business principles, but m-commerce acts as another channel through which
value can be added, whereas Kurkovsky, Zanev, and Kurkovsky (2005) claim that m-
commerce is a special branch of e-commerce, in which mobile devices and their network
connection medium are used to buy, sell and promote products, services and information. R.
Tiwari, Buse, and Herstatt (2006) also claim that m-commerce opens new business
opportunities by enabling innovative, location-based services (LBS) that the immobile
Internet cannot offer. Ayob, Hussin, and Dahlan (2009) interpret m-commerce as the next
generation e-commerce as it enables users to access the Internet without needing to find a
place to plug in. Maamar (2003) supports this view by stating that e-commerce is about
being able to buy and sell goods/services over mobile devices. In addition to those
definitions and interpretations, J. J. Zhang, Yuan, and Archer (2002) state that m-commerce
is not simply a new distribution channel, a mobile Internet or a substitute for PCs. Rather, it
is a new aspect of consumerism and a much more powerful way to communicate with
customers. Delivering online content and services through m-commerce is more complex
than it is through e-commerce, due to the characteristics of the mobile services infrastructure
(Tsalgatidou & Pitoura, 2001). To understand the dynamics of m-commerce, the mobile
services infrastructure must be analyzed with regards to the key players in the mobile
industry value chain. These key players provide the hardware and software components for
the whole mobile industry. For example, device manufacturers provide mobile devices like
smartphones and tablets, while equipment vendors (or suppliers) provide useful and
innovative physical mobile network infrastructure like base stations, routers, switches, and
additional hardware that can increase the efficiency of mobile devices Camponovo and
Pigneur (2003) and J. J. Zhang, Yuan, and Archer (2002). Some device manufacturers, like
Apple, are also application providers as they support their devices with the related mobile
operating systems (OS) and mobile applications (apps) (Camponovo & Pigneur, 2003; J. J.
Zhang et al., 2002). Mobile network operators or network operators enable mobile end-users
and other actors in the industry value chain to access their networks and the Internet by
constructing and maintaining the infrastructure (Camponovo & Pigneur, 2003; J. J. Zhang et
al., 2002). Similarly, Internet service providers (ISP) provide access to the Internet with a
purpose similar to mobile network operators and WAP Gateway providers. Furthermore
according to Camponovo and Pigneur (2003), players like regulation authorities define the
legal framework for all the players in the mobile industry to create the competitive
environment with the purpose of satisfying the needs of every entity, while consumer groups
represent the customers who use the final mobile service. Payment agents provide various
methods of payment to end-users allowing them to have monetary transactions through their
mobile devices. Billing facilitators which are defined as banks and credit card companies by
J. J. Zhang, Yuan, and Archer (2002), take care of billing the end-users depending on the
service they used. The mobile industry value chain players are at the center of the
mcommerce concept since they provide the technical infrastructure in terms of the
communications and required software platforms as well as the useful features of mobile
devices that companies and users can use in order to satisfy the requirements of m-
commerce.
Literature Review
For the purpose of this paper, I have gone through an exhaustive survey of articles dealing
with the issues of business models and strategies. Ngai & Gunasekaran (2007) have done a
comprehensive literature review for m-commerce in general, dealing with articles from 2000
to 2003. Dahlberg, Mallat, Ondrus & Zmijewska (2007) have also done a review of literature
from the mobile payments point of view. So, there is a need to review literature from a purely
business-model perspective so that it may be useful for decision makers to have an idea about
different business models and it might be helpful for them in making strategies in a
competitive environment. I have searched for papers, both conferences and journals, from
2003 onwards in these databases: Science Direct, IEEE Xplore, Emerald Full text and Google
scholar. Out of all the papers, some were selected that fulfilled the objective of this paper
based strictly on business models and strategy.
The basic purpose of studying business models and strategies is to have a general idea to
answer the following questions. What kind of business models are used more frequently?
What strategy different authors across the world propose to maximize the profits for all
players involved in mobile network? Whether the models used in one country are applicable
to an industry in another country or not? The following table represents the characterization:

Authors
Context
Main Results & Strategic Decisions Suggested
Giovanni Camponovo, Yves Pigneur (2003)
Business model analysis applied to mobile
Business
The mobile business industry is a very recent one and that the different players are still experimenting with
models in order to conquer a sustainable and profitable position in this promising industry. What business m
be sustainable is yet to be seen. We argue that business models that explicitly address mobility, network
monopolies issues and that are profitable to all the different players needed to provide an end-to-end solut
successful and sustainable.
Amandeep kaur (2014)
Analysis of mobile-e-commerce business model
In the M-Commerce and Ecommerce from the survey response eCommerce is Better from M-Comme
Commerce, People using the ecommerce. Beside Nowdays Multiple people are connected with M-Commerc
So many people are connected with ECommerce.
Where 87% people using the MCommerce
Where 89% people are using the ECommerce.
Aphrodite Tsalgatidou& Evaggelia pitoura (2001)
Business model and transaction in M-commerce: requirements and properties
MEC operates partially in different environments than e-commerce conduced on the fixed internet, due to s
and constraints of mobile terminals and wireless networks and the context, situations and circumstances
their hand-held terminals.
Yingliang Wu, Chin E. LinHaosu Wu (2007)
A Research of Value-Net Based Business
Model and Operating of M-Commerce
The discussion of business model of M-Commerce based on value-net in this paper is a collaborative a
which can effectively cope with the complex variety and the intense competition in the market. And so as to
systemic view and methodology, and then effectively improve the competitiveness of the whole industry, t
an ecosystems basing value-net in the industry and a vicious-cycle industrial ecosphere. But it must be
shouldn't neglect the important factors such as technology, economy and society etc when we study and us
factors of the system in the industry or field.
Florina pnzaru, alexandra zbuchea , and elena-mdlina vtmnescu (2016)
M-commerce Facts and Forecasts. A Comparative Analysis within a
Triad Framework: India, Romania, and the United States
The comparative analysis of the three countries brought to the fore the intricate dynamics of Internet in
usage, and the mcommerce dimensions. The reported facts and figures indicate that the US may be perceive
in terms of Internet penetration,
Smartphones and tablets usage rate, and percentage of smartphone users who purchase mobile (as depic
tables). Still, both India
402 | Alexandra ZBUCHEA, Elena-Mdlina VTMNESCU, Florina PNZARU M-commerce Fac
Comparative Analysis within a Triad Framework: India, Romania, and the United States and Romania
towards a better capitalization of mobile devices and of m-commerce, as the forecasts for the next years su
discussed, in India, the mobile money transfer is fulminatory, counting for around 20% of the world trans
2018 Juniper, 2015) while, presently, 10% of apps worldwide are estimated to be developed by Indian
2015a).
Fahad mehmood (2015)
Business Models and Strategies of M-Commerce: A Review
Mobile technologies have undergone enormous changes in the past and the future trend
also depicts greater competition between companies on the ground of technology and
pricing schemes. In the literature, many authors have discussed the positive impact on
value of firm resulting from using IT (Ho Geun Lee, Dong Hwan Cho & Seong Chul Lee,
2002) but still, companies have to design their business models and make strategies
which enable them to achieve maximum benefits. However, the lack of standards for
business models in this industry does not bode well with decision makers.
Ruixue Xia & Mattias Rost, Lars Erik Holmquist (2002)
Business Models in the Mobile Ecosystem
mobile business is conducted not as plainly as we thought before. It is a huge complex network that is not
selling relationship within the business. With the emergence of varieties of app stores, questions such as w
best channel that the developers should deliver their applications through, how to deal with the problem of
if the subscribers change the mobile network operators, and how much revenue that they should split with o
be dealt with.
Giovanni Camponovo
(2002)
Mobile commerce business models
Different players require to establish partnership agreements with network operators and device
manufacturers, in order to support interoperability of the different solutions (which is required to
build network effects) and ensure access to essential proprietary assets (which are a consequence of
natural monopolies). It is however worth reminding that the mobile business industry is a very recent one a
players are still experimenting with a variety of business models in order to conquer a sustainable and profi
promising industry. What business models will prove to be sustainable is yet to be seen. We argue that b
explicitly address mobility, network effects and natural monopolies issues and that are profitable to all
needed to provide an end-to-end solution will be the most successful and sustainable.
Khawar, Kamran & Weijun (2010)
Revenue sharing, Marketing and improved efficiency business models
Type of business model and the strategic decisions made depend upon the type of service provided by th
operator has the centre-location in the network and mobility is the factor behind achieving profitability.
X. Wu, Zhang & Chen (2010)
Revenue sharing/ Value net business model
In order to generate profitable revenue streams, business model innovation is required focusing on custome
with other players and change in organizational structure

The summary shown in the table above represent that focus from traditional operator focused
business models has shifted towards more dynamic value net models. In the literature,
authors point out that the choice of a specific business model greatly affects the performance
of companies and the quality of service (Giovanni Camponovo, Yves Pigneur 2003). Thus it
is of utmost importance for companies to choose the business models which can fulfil the
requirements of customers, create value for all the stakeholders and help them in evolving
continuously in a changing environment. Value net approach greatly fulfils these
requirements. Ideal situation is to use a combination of business models but it depends on the
size of market, regulation practices and number of competitors. For example, a telecom
company operating in Europe faces different challenges as compared to one operating in
China. The purpose of this theoretical analysis is to help managers have an idea about the
various business models and to help them realize the importance of an effective business
model. Due to the continuous advancements in technology, companies still have not found
the right solution and are experimenting based on their own resources and trends of market.
While there is no standard for a business model in m-commerce at the moment, but in the
future a combination of different business models can become a possibility.

Business Model:

A business model is the way in which a company generates revenue and makes a profit from
company operations. Analysts use the metric gross profit as a way to compare the efficiency
and effectiveness of a firm's business model. Gross profit is calculated by subtracting the cost
of goods sold from revenues.
During the dotcom boom analysts went in search of net income. The internet is a disruptive
technology with the ability to revolutionize certain industries, but where was the cash flow?
When analysts couldn't find the cash flow, they settled for the business model to legitimize
the industry. Instead of looking at net income, calculated as gross profit minus operating
expenses, analysts concentrated on gross profit. If the gross profit was high enough, analysts
theorized, the cash flow would come.
The two primary levers of a company's business model are pricing and costs. A company can
raise prices and it can find inventory at reduced costs. Both actions increase gross profit.
Gross profit is often considered the first line of profitability because it only considers costs,
not expenses. It focuses strictly on the way in which a company does business, not the
efficiency of management. Investors that focus on business models are leaving room for an
ineffective management team. They believe the best business models can run themselves.
In this paper, we are going to study and analyse business models of various e-commerce and
M-commerce businesses like amazon, flipkart, snapdeal etc.

Amazon:
Known best as the largest internet retailer in the world, Amazon.com is not a simple case
study in terms of business model analysis. Even if we begin by looking at it's consumer retail
business, it quickly becomes clear that the company is anything but a traditional retailer.
While Amazon does sell products at a standard mark-up, it has also pioneered alternate retail
strategies by acting as the gateway for other retailers and a very robust marketplace for used
goods. But retail is only part of the picture when it comes to Amazon.com.

Lines of Business
The company itself defines its lines of business in terms of product sales, service sales, AWS,
fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit cards.
For our purposes, I'll define Amazon's lines of businesses as 1) online retail, 2) internet
services, and 3) the Kindle ecosystem.
Online Retail
The online retail line of business includes those products sold by Amazon as a traditional
retailer, most commonly as a low-cost retailer. Amazon claims to have "Earth's Biggest
Selection" of products available through its family of websites, sold at the lowest cost at a
small profit. The company started as an online book seller, rapidly expanding into music and
movies, and ultimately into electronics and household goods.

But Amazon doesn't stock everything that is sold through its website. Another part of its retail
strategy is to serve as the channel for other retailers to sell their products and taking a cut of
every purchase. Amazon maintains its status as a destination website, but does not have to
maintain inventory on slower-selling products. This strategy has made Amazon a leading
long-tail retailer, expanding its available selection without a corresponding increase in
overhead costs.

Extending this long tail retail model further, Amazon introduced the sale of used products
through its seller marketplace. Originally developed to compete with eBay, the seller
marketplace provides another retail revenue stream for the company without the need to stock
products in its warehouses. Advertising and shipping are handled exclusively by sellers, with
Amazon taking a cut of every sale simply for providing the channel.

Internet Services
Amazon's internet services cannot easily be discussed as a standalone line of business
because it is deeply intertwined with both its retail business and the Kindle ecosystem. From
the consumer perspective, Amazon has begun to provide services like Amazon Prime, which
provides free two-day shipping on retail purchases, on-demand video streaming, and free
access to the Kindle library, all for an annual fee. Amazon Prime overlays the subscription
and all you can eat business models with the retail model to provide additional customer
value.

Unknown to most Amazon customers, however, are the other internet services provided by
Amazon, referred to as AWS (Amazon Web Services). Originally developed as a side
business, Amazon decided to lease out its own server space to other companies and
individuals. While not a core part of the company's strategy, Amazon found itself managing a
large number of servers and internet services, and it was a fairly small effort to manage those
services for others.

Kindle Ecosystem
Amazon has expanded its business into manufacturing and distributing the family of Kindle
tablets. Originally designed as an electronic book reader (supplementing its online book seller
business), the Kindle has become a fully functional tablet and media device. With the Kindle,
Amazon serves as both manufacturer and traditional retailer (and also wholesaler by selling
the device through other retailers).

While the company does not admit as much, it is assumed that the Kindle devices are sold at
a loss, which would more correctly put this line of business into the razors & blades category
of business model. By selling the hardware at a loss, Amazon is betting that customers will
purchase enough electronic books, games, and videos to justify the initial loss.

Flipkart:

How Does FlipKart work: Flipkart is an e-commerce portal, B2C shopping Portal, for Indian
customers or at-the-moment, customers ordering the goods for delivering in India. The
model here is : Portal > List Sellers who sell the desired portfolio products > Get customers
browsing through the products > Create appealing discounts > Customer Shops for the
desired products > Seller / Flipkart ships the product to customer > Product Accepted and Not
returned back > Seller gets his agreed price of the product minus the commission charged by
FlipKart for doing everything they do. Thus the core bread and butter of the Model is X%
commission on the total sale value given to the seller

The sale can happen via multiple channels as listed below & For all the sale achieved by
FlipKart for a particular seller FlipKart will charge a percentage (%) cut on the total sale
amount excluding taxes.

Direct via Website

Direct via Web-App
Direct via Mobile App (Android or iOS or others)
Direct via Tele Sales (Customer calling and Placing order Happens rarely now)
Via Affiliate networks (Bloggers, Coupon Websites, Review Websites etc)
Social Buy
The percentage commission varies on the type of product and the type of sale that FlipKart
makes. It may range anywhere between 5% to 20% of the sale value (excluding taxes and
discounts). The following is an e.g. of how the billing of FlipKart sale will be recorded in
FlipKarts financial books:

Customer A, B & C Purchase 5 Products from FlipKart in a month and these products are a
Book, a Stereo, A Fridge, A Mobile Phone and a Bed sheet from 3 Sellers. Invoice for the
Month for FlipKart looks like below table.
The total of Col I will be the total revenue of FlipKart from that particular sale, now the
numbers here are small and are taken for the ease of calculation in actuals these numbers are
hefty and run into billions of dollars (Ref: Total Loss of Flipkart for FY 14-15 was about
2000 Cr). This is the basic bread and butter for FlipKart. There are other Revenue and
Business Lines as well that FlipKart has. These are outlined and explained in details below.

Snapdeal:

SnapDeal is owned by Jasper Infotech Private Limited. It operates via a Market-Place

business model of E-Commerce, adopted by various big players like Amazon, FlipKart etc.

SnapDeal started out as a Daily deals and Coupons Website. Possibly the biggest example of
a Business Model Pivot that we could think of in the Indian Start Up Eco System.

They also considered the Inventory Model in the past which terribly failed and now they
publicly shrug that model as if they never thought about it.

Today they operate with the Market-place model only.

SnapDeal Business Model Sequence

List Sellers Today SnapDeal claims of having 100,000+ Sellers on its platform.
Get Sellers to become Active By Listing of the Products
Sellers Agree to the TnC of SnapDeal and agree on a selling commission on every order
[Ranges from 5-30% of the Sale Value depending on the item listed to be sold.]
When ever any order is put up on SnapDeal by a customer, SnapDeal passes that to the seller
and arranges for the pick up and delivery [if fulfilled by SnapDeal] or else the Seller directly
ships it to the customer.
At the end of a certain pre agreed period of settlement of payments to Sellers, SnapDeal
aggregates the total sale achieved by a particular seller, and after deducting the sale
commission and service tax, they wire transfer the rest of the money to the seller.
The sale happens via channels as listed below & For the entire amount of sale achieved by
SnapDeal for particular seller SnapDeal will charge a percentage (%) cut on the total sale
amount excluding VAT / CST.

Website Sale
Web-App on Mobile / Tablets
Mobile App (Android or iOS or others)
Direct via Tele Sales (Customer calling and Placing order Happens rarely now)
Via Affiliate networks (Bloggers, Coupon Websites, Review Websites etc)
Social Buy
Corporate Sales (Rewards and Recongnition Programs) and Gifting Platforms [ FlipKart does
not do this]

SnapDeal GMV Calculation

GMV is the Gross Merchandise Value i.e. the value of the goods and services sold on its
platform put together. According to estimates, it is still in the $3 $4 Billion Range.

Ad Space : SnapDeal Business Model

Problem statement

Statement Of Problem
 To assess the knowledge of the people regarding mobile-commerce and Electronic
commerce. This Study related to the knowledge of the m-commerce and ECommerce.
In this study we gain the knowledge from the people of those which is related to the
m-commerce and e-commerce .So for that we conduct a survey and take the people
response for that way. We conduct survey from the educated and uneducated person.
This survey collect in the Punjab .This study and survey is very important for the
awareness For the mobile technology and its using.

Purpose of The Study-

o Provide an overview of the fundamentals about mobile and mcommerce.
o Show what are the categories of Mcommerce applications.
o To assess the knowledge of people regarding Mobile-commerce and e
commerce.
o Collected the data.

Objectives:

To assess the latest trend in e-commerce globally.

Impact of growth of an e-commerce.

To analyse the latest global scenario of e-commerce.

The impact of growth on overall economy.

Scope of the Project

Similar study can be replicated on a large sample in different settings.

Study can be done to assess the impact of educational on knowledge regarding M-
commerce and Ecommerce.
Some people are less knowledge about the M-Commerce because the less using
Mobile Commerce.
Similar study can be done for the using of Mean, Mode, Median.

Mobile business is a complex network of different players in competition with each other to
capture value. The collaboration with companies in form of agreement is the solution for the
future. With different service providers and application developers, it has become harder for
companies to choose the one that will open value streams for company and to manage the
financial aspects related to it. Based on the information collected by theoretical and empirical
evidences, we are in a position to highlight some important questions for future research in
the complex network of mobile commerce.
RESEARCH QUESTION 1: How can the telecommunication market structure and the
government policies in a country effect the business model selection? The telecommunication
industry structure varies greatly in countries. The impact of government regulation and
market structure on business model selection can be calculated by evaluating the business
models in China and in Europe. China mobile has a dominant position in Chinese market
compared to relatively open market structure in Europe. A cross-national comparative case
study or interviews with experts can help to answer this question. Jiang Yu & Lanxiang Zhao
(2006) has discussed the business model in highly regulated Chinese market. Similar studies
and comparisons between other countries can offer a useful insight to researchers.
RESEARCH QUESTION 2: How can the players in M-commerce value chain structure and
manage the interactions between them? The literature across the world points out the need of
different players to co-operate and interact with each other in order to create win-win
situations. However, there is a need to discuss this issue in greater depth that what kind of
relationships or understanding in terms of contracts can all the players agree upon and what
are the critical success factors in such a situation. Case-studies or interviews can help
researchers in future to address this problem.
RESEARCH QUESTION 3: How the consumer behaviour and lifestyle can affect the
design of business model? Value net models combined with revenue sharing models can be a
solution in the future but the effect of consumers lifestyle on business model remains to be
seen empirically. Comparative analysis between telecom operators might be useful in this
case. Review of theoretical analysis points out different preferences of customers across the
globe. Androulidakis & Kandus (2011) discuss the different behaviours in Southern and
Eastern European countries. Similarly, W-T. Wang & H-M. Li (2012) provide us with an
insight into Taiwan mobile industry preferences but papers concerning the quantitative effect
of such behavioural differences on companys decision do not exist and it can provide an
interesting area for future research.
RESEARCH QUESTION 4: What is the exact profitability or value gain achieved when
mobile operators shift from traditional business model to a more adaptive value net model?
Research highlights that traditional business models are not well suited to provide
profitability in the long run. Researchers are now focusing more on value nets or combination
of different models. Empirical analysis of companies shifting from traditional to value nets
model is not available. Case studies and data analysis can be helpful in this case.
RESEARCH QUESTION 5: What will be the impact of business models when new paying
methods using innovative technologies like near field communication (NFC) or quick
response (QR) codes are used? Business models have become more user-centred but the
changes occurring because of new methods like NFC have to be taken into account. Research
can be carried out using NFC as a case study in a payment environment. The profit sharing
between operator, service provider and the manufacturer of mobile can also be an interesting
topic of research in this case.
RESEARCH QUESTION 6: What are the factors that hinder the adoption of a standard in
m-commerce business models? In the literature, we found very little information about the
factors that affect the adoption of business model standard. Nir Kshetri (2007) highlights the
economic and socio-political barriers in the adoption of business models in developing
countries. Similar case studies in other parts of world or in developed countries can provide
with an insight of the important factors and barriers in the adoption of business models.

The future will certainly gave the indication about how the wireless internet on going to be
positioned and how the wired internet on going to be positioned and what are the application
of m-commerce and e-commerce .How do Analyse the data which collected through the
survey from those people which using the m-commerce and e-commerce .M-commerce
application area will be very helpful for the m-commerce user for the using of m-commerce.
In this study our main purpose to present the m-commerce and gave the explanation of the m-
commerce its application, its using, need and scope of the M-commerce.

Research Methodology
The research methodology (Bennett, 1986; Jankowics, 1991) sets out the systematic, focused
and orderly collection of data for the purpose of obtaining information from it, to
solve/answer the research problems or questions. It plays an important role in research.
Therefore choosing the correct method to deal with the research problem is a crucial decision
in the research process.
Our research objective is to analyze the business model of the m-commerce.
As the number of online social companies is quite limited so far, it is hard to do quantitative
research. Thus, qualitative research method is chosen for an in-depth study in order to find
out the success factors behind the business models. Case study is the main research methods
in this thesis.

Case study research method

Case study research4 excels at bringing us to an understanding of a complex issue or object

and can extend experience or add strength to what is already known through previous
research. Case studies emphasize detailed contextual analysis of a limited number of events
or conditions and their relationships. Researchers have used the case study research method
for many years across a variety of disciplines. Social scientists, in particular, have made wide
use of this qualitative research method to examine contemporary real-life situations and
provide the basis for the application of ideas and extension of methods. Researcher Robert K.
Yin defines the case study research method as an empirical inquiry that investigates a
contemporary phenomenon within its real-life context; when the boundaries between
phenomenon and context are not clearly evident; and in which multiple sources of evidence
are used (Yin, 2002).
Critics of the case study method believe that the study of a small number of cases can offer
no grounds for establishing reliability or generality of findings. Others feel that the intense
exposure to study of the case biases the findings. Some dismiss case study research as useful
only as an exploratory tool. Yet researchers continue to use the case study research method
with success in carefully planned and crafted studies of real-life situations, issues, and
problems. Reports on case studies from many disciplines are widely available in the
literature.
Many well-known case study researchers such as Robert E. Stake, Helen Simons, and Robert
K. Yin have written about case study research and suggested techniques for organizing and
conducting the research successfully. This introduction to case study research draws upon
their work and proposes six steps that should be used:

Determine and define the research questions

Select the cases and determine data gathering and analysis techniques
Prepare to collect the data
Collect data in the field
Evaluate and analyse the data
 Report results
.

The case study part in this research is organized and conducted according to the six steps
suggested above.

Qualitative research

This is carried out when we wish to understand meanings, look at, describe and
understand experience, ideas, beliefs and values, intangibles such as these. Example: an area
of study that would benefit from qualitative research would be that of students learning
styles and approaches to study, which are described and understood subjectively by students.

Using quantitative and qualitative research methods together

This is a common approach and helps you to 'triangulate' i.e. to back up one set of
findings from one method of data collection underpinned by one methodology, with another
very different method underpinned by another methodology - for example, you might give
out a questionnaire (normally quantitative) to gather statistical data about responses, and then
back this up and research in more depth by interviewing (normally qualitative) selected
members of your questionnaire sample.

Research methods in brief

Look at the very brief outlines of different methods below. Consider which you intend
using and whether you could also find it more useful to combine the quantitative with the
qualitative. You will be familiar with many of these methods from your work and from MA,
MSc or BA study already.

Qualitative research methods

Interviews
 Interviews enable face to face discussion with human subjects. If you decide to
interview you will need to draw up an interview schedule of questions which can be
either closed or open questions, or a mixture of these. Closed questions tend to be used
for asking for and receiving answers about fixed facts such as name, numbers, and so on.
s. With closed questions you could even give your interviewees a small selection of
possible answers from which to choose. If you do this you will be able to manage the data
and quantify the responses quite easily.

Identify your sample.

Draw up a set of questions that seem appropriate to what you need to find out.

Do start with some basic closed questions (name etc.).

Don't ask leading questions.

Try them out with a colleague.

Pilot them, then refine the questions so that they are genuinely engaged with your
research object.

Contact your interviewees and ask permission, explain the interview and its use.

Carry out interviews and keep notes/tape.

Thematically analyse results and relate these findings to others from your other
research methods.

Quantitative research methods

Questionnaires

Questionnaires often seem a logical and easy option as a way of collecting

information from people. They are actually rather difficult to design and because of
the frequency of their use in all contexts in the modern world, the response rate is
nearly always going to be a problem (low) unless you have ways of making people
complete them and hand them in on the spot (and this of course limits your sample,
 how long the questionnaire can be and the kinds of questions asked). As with
interviews, you can decide to use closed or open questions, and can also offer
respondents multiple choice questions from which to choose the statement which
most nearly describes their response to a statement or item.

Types of questionnaire
1. Structured questionnaire
a) Have definite and concrete questions.
b) Is prepared well in advance.
c) Initiates a formal inquiry.
d) Supplements and checks the data, previously accumulated.
e) Used in studies of the economics and the social problems, studies of the administrative
policies and changes etc.

2. Unstructured questionnaire
a) Used at the time of the interview.
b) Acts as the guide for the interviewer.
c) Is very flexible in working.
d) Used in studies related to the group of families or those relating to the personal
experiences, beliefs etc.

Data Collection Techniques and tools:

Marketing research plays an important role in the process of marketing. It helps the
firm to acquire a better understanding of the consumers, the competition and the marketing
environment. Marketing research is a systematic gathering, recording and analysis
marketing problem to facilitate decision making. The research methodology defines what
the activity of research is, how to proceed, how to measure progress, and what constitutes
success. The search methodology is a science that studying how research is done
scientifically. It is the way to systematically solve the research problem by logically adopting
various steps.
 objectives
Define the problem and its
Identify the problem
needed
Determine the information
information
Determine the sources of
Decide research methods
interpret the data
Tabulate, Analyze and
Prepare research report

Follow-up the study

Characteristics of research
1. Research requires a clear articulation of a goal.
2. Research follows a specific plan of procedure
3. Research usually divides the principle problem into more manageable sub problems.
4. Research is guided by the specific research problem, question, or hypothesis.
5. Research accepts certain critical assumptions. These assumptions are
6. Underlying theories or ideas about how the world works.
7. Research requires the collection an interpretation of data in attempting to resolve the
problem that initiated the research.
Consideration of the different types, their applicability, their strengths, and their weakness
that will help us select the type best suited to a specific problem. The research done here is a
Descriptive type of research.

Descriptive research:
Descriptive research can be either quantitative or qualitative. It can involve
collections of quantitative information that can be tabulated along a continuum in
numerical form, such as scores on test on a test or the number of times a person
chooses to use a-certain feature of a multimedia program, or it can describe categories
of information such as gender or patterns of interactions when using technology in a
 group situation. Descriptive research involves gathering data that describe events and
then organizes, tabulates, depicts and describes the data collection. It often uses
visuals aids such as graphs and charts to aid the reader in understanding the data
distribution, because the human mind cannot extract the full import of a large mass of
raw data, descriptive statistical are very important in reducing the data to manageable
form. When in-depth, narratives descriptive of small numbers of cases are involved,
the research uses descriptive as a tool to organize data into patterns that emerge
during analysis. Those patterns aid the mind in comprehending a qualitative and its
implication.
Research approach:
The basic approached to research are quantitative and qualitative research. This
research is quantitative approach as it deals with feelings, perceptions and
behaviour of the respondents. This focus on statics as it is a quantitative research.

Research instrument:
Research instrument is the tool used to collect data for sample. Researcher has
choice of mainly one research instrument which can help to find out the primary
data.
The research instrument used in the research study is structured non-disguised
question.

Sampling technique:
The sampling technique used is convenience sampling. In this technique questions
were asked personally to different Companies during the visits made for all the key
competitors as well as Users of Vodafone services

Sample size:
How many Companies should be surveyed? We are visited the atlast companies were
surveyed during the tenure, as large samples give more reliable results than small samples we
take 50companies were taken under study to get desired results. Survey was conducted by
asking questions as corporate feedback to all the companies visited.
Different Questions asked to the Corporates
Name of the company
Connection- Broadband or Data Card-Wi-Fi
 Current operator used by the company-
Parameter which they give importance while selecting an operator
Internet usage per month
Are they aware about the corporate plans offered by Vodafone
Interested in Changing operator to Vodafone

3.3.2 Data Type:

Primary Data:
Primary data are obtained by a specifically designed to fulfill the data of problem at
hand. Primary data is collected during the course of doing experiment by using
various methods of data collection such as interview method questionnaires method.
Various methods of collection of primary data are:
Observation method
Interview method
Questionnaires method.
Demonstration

Interview Method:

The interview method of collecting data involves presentation of oral verbal stimuli
and reply in terms of oral verbal responses. This method will be used for retailers that are too
busy to fill the questionnaire and in some cases it will also be used for those who are not
willing to fill the questionnaire for same reasons.
Questionnaire Method:
This method of data collection is quite popular, particularly in case of big inquiries. This
method will be main source for gathering information in project. A questionnaire in which
there is concrete and predetermined questions. The questionnaire method consists of:
Multiple choice questions Respondents have right to choose answer from given
alternatives.
Open End Questions Respondents are free to answer in their own word.
Data was collected from corporate using : Personal interviews

Data collection method:

Collection of data is done by the Primary Data
 By visiting different corporate in the area assigned. Data was collected by meeting
the admin and IT head of companies as they take care of voice and data,
respectively, in maximum companies.
Questions were asked in such a way to fulfill objective of research and help
Vodafone services gain further growth

Sampling technique:
The sampling technique used is convenience sampling. In this technique questions
were asked personally to different Companies during the visits made for all the key
competitors as well as Users of Vodafone services

Sample size:
How many Companies should be surveyed? We are visited the Atlas companies were
surveyed during the tenure, as large samples give more reliable results than small samples we
take 50companies were taken under study to get desired results.
Survey was conducted by asking questions as corporate feedback to all the companies visited.
List of the questions asked is given below
Different Questions asked to the Corporates
Name of the company
Connection- Broadband or Data Card-Wi-Fi
Current operator used by the company-
Parameter which they give importance while selecting an operator
Internet usage per month
Are they aware about the corporate plans offered by Vodafone
Interested in changing operator to Vodafone
Secondary data:
Secondary data means information that is already available. Secondary data means
which are not originally collected but rather obtained from published data are
available in:
Various publications of central, state and local government.
Various publications of foreign govt. or of international bodies and their subsidiary
organizations.
Technical and trade journals.
Books and magazines.

Secondary data can be obtained from two different research strands:

 Quantitative: Census, housing, social security as well as electoral statistics and other
related databases.
Qualitative: Semi-structured and structured interviews, focus groups transcripts, field
notes, observation records and other personal, research-related documents.
Can be obtained through internal & external sources.
3.3.3 Data Collection Tool:
Questionnaire, internet, interviews, magazines, review meetings and company Files.
Sampling Plan:
A sampling plan is a detailed outline of which measurements will be taken at what times, on
which material, in what manner, and by whom. Once the sampling plan has been developed,
it can be verified and then passed on to the responsible parties for execution.

Sampling Frame:
Companies whose turnover was between 10 to 250 crores. Mainly known as SMEs
Unit: Industries I had to cover in the survey were SMEs (Small and Medium Enterprise).
Size: 363 companies online research & 30 Companies visits of Nasik.

3.3.4 Method:

Sample design is a definite plan of obtaining some items from the whole population.
There are two methods of Sampling.
1) Non Probability Sampling
2) Probability Sampling

1) Probability Sampling is again divided into following types

a) Simple random sampling
b) Systematic sampling
c) Stratified Sampling
d) Cluster Sampling
e) Complex multistage random Sampling

2) Non Probability Sampling

a) Convenient Sampling
b) Judgmental Sampling
 c) Quota Sampling
d) Snowball Sampling
Research Methodology Used
Type of Research: Descriptive Research
Research Method: Quantitative and Qualitative research
Data Type: Primary and Secondary Data
Data Collection Method: Internet, Interviews

Result and Learning:

The m-Commerce industry is fast growing with estimates of reaching a user base of 1.3
billion people around the world by 2005, contributing to an overall market in excess of
USD$22 billion. Industry players, ranging from network carriers to content providers hope to
capture part of this revenue. However, early results were not up to the hyped expectations,
due to a combination of reasons covered in this paper as technology limitations or consumer
concerns to the various business applications outlined in Section 5. These concerns centre on
the issues of cost, speed, usability, security, and privacy. For m-Commerce to take-off, all of
these concerns will have to be effectively addressed and collaboration among all value
network members is essential. It should also be noted that health concerns, although not
linked to any particular application, pose another barrier for adoption of wireless technology.
On this issue, the m-Commerce industry will need to clearly communicate any findings, so as
to reduce fears of health hazards consequent of mobile device usage.

Even without going into a detailed view of the business models of the different actors
participating in the mobile landscape, it is apparent that the economic characteristics
underlying the mobile business have a profound impact on the adopted business models. In
fact, for nearly each player, partnerships with a number of other actors are an important part
of their business models, as they are required to overcome the complexity of providing a
complete end-to-end solution, which requires many complementary competencies.
Furthermore different players require to establish partnership agreements with network
operators and device manufacturers, in order to support interoperability of the different
solutions (which is required to build network effects) and ensure access to essential
proprietary assets (which are a consequence of natural monopolies). It is however worth
reminding that the mobile business industry is a very recent one and that the different players
are still experimenting with a variety of business models in order to conquer a sustainable and
profitable position in this promising industry. What business models will prove to be
sustainable is yet to be seen. We argue that business models that explicitly address mobility,
network effects and natural monopolies issues and that are profitable to all the different
players needed to provide an end-to-end solution will be the most successful and sustainable.

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Weblinks:

http://searchmobilecomputing.techtarget.com/definition/m-commerce

https://www.ruor.uottawa.ca/bitstream/10393/31219/1/Kucukcay_Ilyas_201
4_thesis.pdf

http://www.icommercecentral.com/open-access/business-models-and-
strategies-of-mcommerce-a-review-.php?aid=50549

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