Mobile-Phone Users' Attitudes Towards’ Mobile Commerce & Services in the Gulf

Cooperation Council Countries: Case Study Dr. Nick-Naser Manochehri

Accounting & IS Dept., Qatar University, Doha, Qatar nickm@qu.edu.qa

Mr. Yousuf Salim AlHinai

IS Dept., Sultan Qaboos University Muscat, Oman yalhinai@squ.edu.om

Abstract - As the number of mobile phone users is growing, purchasing products and services using mobile phones and other mobile devices are also increasing. The purpose of this study was to provide the status of mobile-commerce in the Gulf Cooperation Council (GCC) countries in term of consumers’ attitudes towards mobile commerce and mobile services provided by mobile operators. Oman, one of the GCC countries is used as the case study. The theoretical background of the study was drawn from Technology Acceptance Model (TAM). This study showed that there is a promising future for m-commerce in Oman as above 66 percents of respondents said that they are willing to buy products and services using their mobile phones. Security of mobile transactions and the cost of products and services are great concerns to the mobile phone users. This study provides a list of recommendations based on the result of the survey that would be of importance to the mobile industry stakeholders in Oman, GCC, and other countries with a similar economy, market and consumer characteristics. The outcome of the study would be of a particular interest to the private and public telecommunication organizations; especially those that intend to invest in m-commerce in the GCC area and other developing countries. Keywords: Mobile-commerce, m-payment, e-commerce, mobile technology, TAM, GCC

I. Introduction

Purchasing products and services using mobile phones and other mobile devices as it is known as Mobile Commerce (m-commerce) is becoming a new trend in the world. There were 94.5 millions m-commerce (MC) users worldwide in 2003 and the segment is expected to grow to 1.67 billions by 2008 [1]. The number of mobile phone users in the Gulf Cooperation Council (GCC) countries like many other

countries is rapidly increasing. GCC established in 1981 and consists of six countries of Persian Gulf region, Bahrain, Kuwait, Oman, Qatar, United Arab Emirates, and Saudi Arabia with the aim of coordinating and integrating their economic policies. This study explores how people of Oman, one of the GCC countries are influenced to adopt the m-commerce.

Making m-commerce a success requires a positive interest of mobile consumers and willingness of the private and public stakeholders of the mobile technology to invest. Many factors may hinder consumer usage of this new Information Technology (IT) application. According to [2], cost of access (35%), security (33%), difficult navigation (11%) and low access speed (9%) are some of the factors. This paper examined 300 mobile phone users which included a mixture of male and female respondents from two groups, students, and working professionals and asked about their attitude toward m-commerce and other mobile services.

The outcome of the study would be of a particular interest to the private and public telecommunication organizations; especially those that intend to invest in m-commerce. Our aim is to provide some useful data on potential uptake of m-commerce applications and some guidance for researchers on what features to priorities. The finding also has implications for government and telecommunication agencies in the Gulf Cooperation Council (GCC) as they seek an efficient and effective ways to move towards m-commerce.

II. Literature Review

After the success of Electronic Commerce (e-commerce or EC) in the west on late 1990s, many experts see Mobile Commerce (m-commerce or MC) as the next phenomenon in the economy systems. As we enter the third millennium, m-commerce represents

978-1-4244-1672-1/08/$25.00 ©2008 IEEE.

a great and exciting opportunities for both consumers and business communities. The m-commerce (MC) is an evolving, dynamic, unique and rapidly changing business opportunity with its own characteristics and concept [3]. Many industry experts believe that m-commerce is a sleeping giant whose time has yet to come [4]. E-commerce benefited many organizations by reducing supplier cost and increasing profit. E-commerce is used to describe transactions that take place on-line where the buyer and seller are remote from each other [5]. M-commerce definition is similar to e-commerce, but the term is usually applied to the emerging transaction activity in mobile network. However, m-commerce is not an extension of e-commerce and has a different infrastructure, equipment, and application than e-commerce (EC). The key differences between m-commerce and EC are the technology they use, the nature of service they provide, and the business model they represent [6]. M-commerce presents a cost effective and efficient way to provide seamless end-to-end connectivity and ubiquitous access in a market where demands on mobile Internet have grown rapidly [7]. M-commerce predicted to generate billions of dollars in revenue in upcoming years [8]. There are similarities between e-commerce and m-commerce. M-commerce and e-commerce are similar in that both are an economy systems where firms and consumers are aided by computers and networking technologies that enable a new market [9]. Mobile implies portability and refers to devices that can communicate, transact and inform by use of voice, text, data, and video [10]. These communication devices include smart phone, personal digital assistant (PDA), laptop, global positioning systems (GPS) and mobile payment (m-payment) systems. Trading, banking, shopping, bill payments, and other services are examples of these applications that consumers can use their mobile devices, from anywhere or anytime without being connected to wires or fixed in a particular location [11]. Mobile devices especially cell phones are used not only by well-educated white-collar workers but also by poorly educated and even illiterate people. Therefore, the use and operation of it should be as simple as possible. M-commerce success is primarily based on consumers’ buy in, and therefore vendors’ primary focus is on the customers who will be using such a technology [12].

According to mobile business portal web site [13] mobile application infrastructure enabler can be categories into four types: application gateway/platform providers (AGP), mobile application service providers (MASP), mobile Internet service providers (MISP) and mobile application enablers (MAE). To deliver a mobile service to customers a mobile provider need to have m-commerce infrastructure ready. The above categories are

interrelated pieces that make up a typical front-end mobile infrastructure.

Reference [14] classified m-commerce application into six categories. These include communication/interaction, entertainment, transaction, remote control and decision support, information and data access, and future application and services. Most mobile service providers provide many of the mentioned applications. Despite availability and convenience of some recent advanced wireless technology like wi-fi, bluetooth, and wi-max, m-commerce would not be successful if the mobile application enablers and service providers are not available and if the infrastructure lack the security. A global survey in 2004 found that 61 percent of respondents said they would be using wireless devices as a universal payment tool [15].

Reference [16] indicated, a Yankee Group analyst indicated that to fully implement a wireless wallet, three-phase process would be required. The first one is a communication phase, in which we are beginning to move beyond it since large amount of population own and use mobile phone for voice, or the massage communication. The second phase is content, in which consumer buys software games, graphics, and news using the mobile devices. This is the phase that we are entering. The third phase according to Zawel is commerce phase, in which consumers are using mobile devices to purchase real goods in the physical world. Once we enter this phase consumers will begin to accept m-commerce fully. This is a challenging opportunity for mobile industry to convince consumers to leave their credit cards at home and let their mobile phones do the purchasing [17]. To make the wireless wallet a reality mobile industry requires an active investment of large and small stakeholders companies in wireless world. This includes content providers, mobile carriers and billing vendors or m-payment [18]. Mobile payment (m-payment) refers to payment method using m-commerce devices [19]. Purchasing products and services using mobile phone in Europe and far-east market is more demanded than the rest of the world [20]. Japan is the leading country in m-commerce and since 1999 some component of Japans economy is dealt with it. M-commerce in Korea is not popular as Japan; however, Merrill Lynch survey in Korea found that, in the first six months of 2003, only 21.2% of a half million subscribers had made purchase using their handsets. Interestingly, the large number of users (29.2 percents) came from the 30-39 age groups [7]. Based on a research from the Korean consumer protection board, about 75% of complaints around the wireless Internet centered on price. Based on a survey in 2004 by Qpass, a provider of m-commerce software in the US and Europe, there are multiple factors that prevent European consumers

from adapting m-commerce. Complicity of European markets, including multiple currencies, languages, availability of many operating systems and mobile phone handset, and constrained of billing system are among factors. The survey further indicated that more than 82% of polled stated that they would be prepared to purchase goods via their mobile phone while only 26% had ever done so satisfactory.

Making m-commerce successful requires not only the development of technology but also consumers’ attitudes toward m-commerce which is still little far to reach. Although there has been many recent publications that discuss various marketing issues related to m-commerce technologies and applications in the world; however, there are no study that directly explores m-commerce in the GCC area. As such, the aim of this paper was to investigate the adoption process and attitudes of the consumers in the GCC region toward this new information technology phenomenon. As the theoretical background, this study has used the Technology Acceptance Model (TAM). The TAM provides one of the most respected models in explaining Information Systems (IS) characteristics and their effects on consumer adoption of new technology. Reference [21] claimed that user adoption and acceptance of IS and its applications consist of a cognitive assessment of the design features, and an effective response to the system. As such, this attitude influences actual use, or acceptance of the computer systems. Davis, the developer of TAM model, described that the constructs of the model are fairly general and can be used for different types of computer system and consumer population. Reference [22], researchers have simulated TAMs to provide empirical evidence on the relationship that exist between usefulness, ease of use and system use.

As the number of mobile phone user in Oman is increasing, consumer attitude toward m-commerce is very important. Consumer attitudes could provide crucial information on interest of mobile phone users toward m-commerce and perhaps amount of budget organizations should invest toward it. The objective of this study was to provide valuable information to mobile industry in the GCC and sultanate of Oman particularly for deriving m-commerce promotion strategies, and identify room for improvements. The study expected outcomes are to answer to the following questions: To what extent telecommunications industry in Oman and GCC are providing m-commerce activities? What are the consumers’ reaction to the products and services provided? What are the consumers’ concerns? Looking to the future, what are the trends of m-commerce adoption in the GCC region? What are the potential uptakes of m-commerce applications?

In the following section, research methodology is discussed.

III. Research Methodology

Different factors could influence people to buy products and services using their mobile phone. In this study, survey was carried out with 300 mobile-phone users in Oman in 2006 to investigate their attitudes and concerns toward m-commerce and other mobile devices. Survey is the most widely used technique in education and the behavior science for the collection of data [13]. Data were gathered by means of a questionnaire. Measurement scales for most of questions were taken from existing TAM scales, with modified wording to adopt the current topic. There were three groups of questions that participant answered or selected. These three groups are general information, TAM based questions, and questions on respondent current use of m-commerce. TAM is a theoretically justified model intended to explain information technology adoption [11]. The data were translated into a MS Excel sheet and were transferred to and analyzed using SPSS for windows version 13.0. Based upon the results of the questionnaire a series of analysis were used on variables. The population for this study is 300 in which 62 percents are male and 38 percents are female.

The following section presents the emprical findings and summary of the survey research.

IV. Results

In this study, 49.3 percent of the participants aged between 17-23. Twenty four percents of participants have previously purchased or ordered good or services via the Internet. This indicates that 75.6 percent of participants have never used the computer to order products and services.

As shown in the first figure, from 300 owners of mobile phones, 76% have Bluetooth. Furthermore, it is very interesting to notice that 68 percent of mobile phone users have access to the Internet using their mobile phone. This was above our expectation and indicates that Internet access through mobile phones is

growing.

0

50

100

150

200

250

300

Bluet oot h WAP SMS Mult imediaCapabilit y

Int ernetAccess

Figure .1. Distribution of services by mobile users

One of the early questions in the questionnaire

asked: Prior to this demonstration did you know that nowadays people can buy products using their mobile phones (for example, can purchase Pepsi from a vending machine)? Fifty-nine percent answered that they did not know about it. It shows that mobile phone users do not know about m-commerce and its concept and have to be educated.

At this point in the survey m-commerce was defined in a sentence to the participants as “buying and selling of goods and services using a mobile phone“. The first question after demonstration and defining m-commerce was: If you have the opportunity, are you willing to purchase products using your mobile phone? Above 66% said that they are willing to buy products using their mobile phone. This is another important point in this study in which it specifies that future is promising for m-commerce in Oman.

Ringtons

Wallpaper/Logos

Games

Information Services

Figure 2. Distribution of services purchased by mobile

users In the next question it was asked if participants

have purchased ringtones, wallpaper/logos, games or information services (for example paying to receive news) using their mobile phone. Figure 2 shows that out of 137 who bought services through their mobile

phone, 65% of them said that they have bought ring tones, 46.3% bought wallpaper/logos, 42% bought games, and 40% purchased information services using their mobile phone.

Respondents were asked about the maximum amount of money they would be willing to pay each month for additional mobile content services. Result reveal that majority of mobile phone customers in Oman, to some extent, are price sensitive. For mobile companies to do well in this market, they have to consider prices as their very high priority for customers in Oman. Figure 3 below shows the result that respondents surveyed and asked to select the kind of services and products they would be prepared to purchase via their mobile phones.

Parking , 98

cinema, 157

vending machines, 76Newpapers/magazines ,

120

Music/video downloads, 121

puplic transportation, 82

none, 42

Figure 3 .Services and products mobile phone users

would be prepared to purchase via their mobile phones in the future

In addition, the study showed that there is a promising future for m-commerce in Oman as above 66% of respondents said that they are willing to buy products and services using their mobile phones. Security of mobile transactions and the cost of products and services are great concerns to mobile phone users in Oman. Thinking of the future, the 300 respondents surveyed were asked to select the kind of services and products they would be prepared to purchase via their mobile phones. Among all the choices, paying for cinema came as first choice, followed by purchasing music or video downloads, and then buying newspapers or magazines. The following section provides a list of recommendations based on the result of the survey that would be of importance to the mobile industry stakeholders in Oman, GCC, and other countries with a similar economy, market and consumer characteristics.

V. Summary and Recommendations

Overall, this study provided some insights into consumers’ attitudes towards mobile commerce and mobile services in Oman. The results of this survey can contribute to market stakeholders’ understanding of their existing and potential consumers in Oman and GCC region. Although, this study surveyed only 300 mobile phone users, it was able to show some good indications of what mobile phone users think of the emerging technology and what their concerns are. Research is a key method that industry stakeholders have to employ in order to guarantee, to some extent at least, the success of this emerging market. It is even more important for them to research the market now while the m-commerce is still in its introductory phases in most countries around the world as it is in Oman. This survey was meant to contribute to that effort. The following is a list of some recommendations that we believe would be of importance to the mobile industry stakeholders in Oman, GCC and in other countries with a similar economy, market and consumer characteristics.

- As 59% of the respondents said that they are not familiar with m-commerce concepts prior to demonstration and taking the questionnaire, stakeholders in the market should invest in marketing and educating consumers about what m-commerce is and how it can be of advantage to them, keeping in mind the different kinds of consumers. Focusing on the usefulness, convenience, value-added advantage and other unique characteristics that this technology could bring to users is very important in the marketing and education efforts.

- One of the main concerns that m-commerce consumers in Oman have is cost. This might also be the case in other markets other than Oman. Investigating the purchasing power of customers and building pricing strategies on that would be an important step that mobile commerce companies have to take. In addition, mobile industry stakeholders have to decide on the best billing and payment methods that fit their consumers’ needs and financial abilities.

- Security is another reported concern by m-commerce consumers in this study. To tackle this, stakeholders have to increase and empower security measures from the technical side to guarantee maximum safety in mobile transactions. In addition, they have to inform customers about their efforts on this side and show them that m-commerce is as safe as they say it is. This should increase consumers’ confidence and trust in the technology and urge them to adopt it.

- Confirmation of available privacy measures and polices by mobile commerce service providers is also needed by m-commerce consumers.

- Because m-commerce is a new experience to most Omani consumers, their “first impression” of the technology is critical. Oman Mobile, Al-Nawras and other mobile operators in Oman have to be careful in the introduction of m-commerce services and products to the market. If these companies are successful in gaining consumers' initial interest, they will be able to build future strategies on it and introduce more services and products in later stages.

- A level of acceptance of the technology is sensed since 66% of respondents’ are willing to try buying products and services using their mobile phones. This is a good indication for mobile operators in Oman since acceptance can possibly develop in interest and later into adoption if the right strategies are implemented.

- Internet access from anywhere at anytime is one of the greatest advantages of wireless technology and an important enabler of future mobile commerce applications. Since 68% of the respondents said that they already have Internet access via their mobile phones, it means that these customers are at the threshold of becoming active m-commerce consumers if mobile operators and content providers are able to seize the opportunity. That would be by providing valuable content and useful services. Content availability is quoted as one of the most important factors behind the I-mode market in Japan.

- Since 24% of the respondents had a prior experience in buying goods and services using e-Commerce websites, this could cut down on the efforts that stakeholders have to make to convince this group about the idea of buying and selling in virtual environments, which was a great struggle for e-commerce companies when the technology first started. With the existence of such consumers with prior experience, m-commerce companies can build on that instead of starting from zero as e-commerce companies had to do. However, this does not mean that using e-commerce and m-commerce is exactly the same experience, but rather means that the concept of buying and selling in virtual non-physical spaces is similar.

- For those consumers who have no prior experience of using e-commerce or m-commerce, stakeholders have to spend more money and efforts to attract them. As an initial step, these consumers have to be educated about the concepts and then introduced to services in steps to guarantee their continuous interest (especially that they have to pay for each and every m-commerce service they use).

- Because of the personal nature of m-commerce technology, intensive market research that

involves consumers directly is needed for stakeholders to be able to offer what users are actually looking for out of the technology.

References

[1] Wireless Week, Buying numbers. 2004, P. 30. [2] S. Sleeper,. “Can M-commerce Ride Wi-Fi

Coattails?”, last updated: November 2002, http://www.ecommercetimes.com/story/20019.html, date visited: May 2006.

[3] G. Lindsay, “An answer in search of a question: Who wants m-commerce?” Fortune, 2000, Vol. 142, No. 9, pp. 398-400.

[4] D. Buhan, Y. C. Cheong., C. Tan (2002). “Mobile Payments in M-commerce”, last updated: not available, www.cgey.com/tmn, date visited: May 2006.

[5] N. Andrews, (2001). “e-Commerce vs m-commerce - Creating a winning proposition”, last updated: not available, www.digitalrum.com, date visited: May 2006.

[6] J. Zhang, and Y. Yuan,, “M-commerce vs. Internet-based E-Commerce: The Key Differences,” Proceeding of American Conference on Information Systems. 2002, Dallas, Texas, U.S.A.

[7] S. Chong, “An Empirical Study of Factors that Influence the Extent of Deployment of Electronic Commerce for Small- and Medium sized Enterprises in Australia”. Journal of Theoretical and Applied Electronic Commerce Research, 2006, Vol. 1, No. 2, pp. 45-68.

[8] R. Dholakia, N. Dholakia, “Mobility and Markets: Emerging Outlines of M-commerce”. 2003, Journal of Business Research,

[9] I. Clarke III, “Emerging value propositions for M-commerce”, 2001, Journal of Business Strategies Vol. 18, No. 2, pp.133-148.

[10] N. Clarke, S. M. Funnel, Authentication of users on Mobile telephones – Survey of attitudes and practices. Computer & Security, 2005, Vol. 24, pp. 519-527.

[11] B. Wixom, and P. Todd, “A theoretical integration of user satisfaction and technology acceptance”. Information Research, 2005, Vol. 16, No 1, 85-102.

[12] P. Vittet-Philippe N. Millan-Navarro (2000). “Mobile E-Business (M-commerce): State of Play and Implications for European Enterprise Policy and services: ” last updated: December 2000,

http://www.ncits.org/tc_home/v3htm/v301008.pdf, date visited: May 2006.

[13] Anonymous. (2004). “Mobile Commerce Adoption in Hong Kong, Research Findings” last updated: October 2005, http://www.hkpc.org/html/eng/industry_survey/doc/mobile_commerce.pdf, date visited: May 2006.

[14] M. Lehrer, N. Dholakia, and N. Kshetri, ”National Sources of Leadership in 3G M-business Applications: A Framework and Evidence from Three Global Regions.” 2002, Proceedings of the American Conference on Information Systems (AMCIS), Dallas, Texas.

[15] U. Varshney, and R. Vetter, Emerging Mobile and Wireless Networks (Technology Information), 2000, Communications of The ACM.

[16] L. Ward, (2003). “Is M-commerce Dead and Buried?” last updated: November 2002, http://www.ecommercetimes.com/story/21464.html, date visited: May 2006.

[17] M. Donegan,. “The m-commerce challenge”, Telecommunications, 2000, Vol. 34, No 1, pp. 58.

[18] N. Sadeh, “M-commerce: Technologies, Services, and Business Models”. 2002, Hershey, PA: Wiley Computer Publishing “Service scenarios for m-commerce”, last updated: not available 2005 http://www.eurescom.de/Public/projectresults/latest-releases.asp, date visited: May 15, 2005.

[19] P. May, “Mobile Commerce: Opportunities, Applications, and Technologies of Wireless Business.” 2001, New York, NY: Cambridge University Press, London, UK.

[20] S. P. Bradley, S. Matthew “Case Study: NTT Do Como – The Future of the Wireless Internet?”. 2002, Journal of Interactive Marketing, Vol. 16, No. 2, pp. 80-96.

[21] F. Davis, “User acceptance of information technology: System characteristics, user perceptions, and behavioral impacts”. International Journal of Man-Machine Studies, 1993, Vol. 38, 475-487.

[22] D. A. Adams, R. R Nelson, and P. A. Todd,. “Perceived usefulness, ease of use, and usage of information technology: A replication,” MIS Quarterly, 1992, Vol. 16, No 2, pp. 227-247.

[23] “European M-commerce Survey”, last updated: December 2005, www.qpass.com, date visited: December 15, 2005.