Demand Estimation & Market

Sizing
Study to Understand
M-Commerce Market in India
Subject: Top Urgent Project: M-Commerce Market Size and projection



Dear Deepak,

Can you kindly help us with any report that provides this information / project;

We are looking for Indian M-commerce market size related statistics & next 4-5 years forecast in terms of total transactions & total
business amount from those transactions.



Main transaction types of m-commerce are:



1. Mobile commerce based self Recharges

2. Mobile commerce based movie/travel tickets booking, Shopping & 3rd party payments

3. Mobile Banking (Money transfer, Cash deposit/ Cash with drawl)


Regards


2
While SMS Banking is being offered as a
convenience banking service, mobile banking is
a more advanced technology service that
requires a GPRS subscription and a GPRS-
enabled mobile handset.

For mobile banking, the user is required to
download an application on the handset
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Objective
Business Objective:

To estimate and forecast the size of Mobile
Commerce market in India with respect to main
transaction types of Self recharge, 3
rd
party
payments and Mobile Banking


4
Research Objectives
Business Objective:

To estimate and forecast the size of Mobile Commerce market in India with
respect to main transaction types of Self recharge, 3
rd
party payments and
Mobile Banking
For simplicity assume there is only one transaction type

Research Objective

To understand current M-Commerce market scenario in India in terms of
Market size
Types of transactions
Profile of people using m-commerce

To understand Drivers / Barriers towards adoption of m-commerce
amongst consumers

Estimated growth in M-Commerce market over next 2 years
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What should be the Rsch Design
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Research Framework
Secondary research : Various secondary resources like industry reports,
published data, mobile commerce forum websites, news articles etc have
been scrutinized for this study

Primary research : This phase includes the following modules

Qualitative interviews : Qualitative interviews have been conducted with
people in the telecom industry as well as with industry experts using a
semi structured discussion guide

Quantitative interviews : Quantitative interviews were initiated after
conducting a few qualitative interviews (so that these serve as an
exploratory study towards hypothesis generation and questionnaire
development for the quantitative study).


Analysis: The data obtained from all the above modules has been jointly
analyzed to generate most meaningful insights
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Research Design
Secondary
Research
Desk
Research
Primary Research
Qualitative
Module
Quantitative Module
Listings Mains
What would be the approach or
framework
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Approach
The Listings should enable us to get the penetration of m commerce
in 2010, the current year usage and likely penetration in 2012

From the m commerce users we expect to get data on current
volume of transactions by type & also the avg. value per transaction

From the DIs, we hope to get the future growth expected, the drivers
and barriers and how their weight age would change with time

Hence for e.g. the total market for Mobile commerce based self
Recharges in 2012= total mobile subscribers expected in
2012*expected m commerce penetration in 2012*total number of
likely self recharge transactions per user in 2012 *likely average
amount per transaction.

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Research Methodology: Qualitative interviews
We have carried out in-depth interviews amongst following segment











Each of these interviews was a freewheeling discussion held by the Research
Manager and/or Insights Director of the research team

Each interview was recorded, transcribed and content analyzed to derive the
required insights.
Categories Interviews
Mobile Operators 2
M-Commerce Service Providers Such as mChek,ngPay, Eko,Obopay,etc 5
Third Party application providers 4
Experts 5
Total 16
Info areas ????
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Info areas
Current M-Commerce Scenario
Percentage of growth over last 1-2 years
Current growth rate
Reasons of growth of market
Current size of the market
Barriers/Drivers of m-Commerce

Future Scenario
Estimated growth in mCommerce market over next 2 years
By transaction volume
By subscribers
By number transactions
Impact of falling cost of handsets and introduction of feature
rich phones, rising use of tablet-PCs, Support of regulatory
authority etc

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Quantitative what will be the
approach
How would you define the universe

How would you project to universe

How would you estimate the future mkt size
Listings sample design & info areas???
15
16
Zone City Mobile Subscriber
North
Tier 1 Delhi 550
Tier 2 Lucknow 350
Tier 3 Chandigarh 150
East
Tier 1 Kolkata 550
Tier 2 Patna 350
Tier 3 Bhubaneswar 150
West
Tier 1 Mumbai 550
Tier 2 Indore 350
Tier 3 Baroda 150
South
Tier 1 Chennai 550
Tier 2 Cochin 350
Tier 3 Mangalore 150
Total 4200

LISTINGS
The listing questionnaire will be a short
questionnaire (1-2 pgs) designed to help us
identify key parameters such as
Awareness & penetration of M-Commerce
applications,
penetration of smartphones,
Intention of adopting M-Commerce usage
Drivers & Barriers
Intention of purchasing smartphone
Intention of purchasing wireless mobile connections.
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Mains - sample design & info areas???

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Zone City
M-Commerce
User
North
Tier 1 Delhi 30
Tier 2 Lucknow 30
Tier 3 Chandigarh 30
East
Tier 1 Kolkata 30
Tier 2 Patna 30
Tier 3 Bhubaneswar 30
West
Tier 1 Mumbai 30
Tier 2 Indore 30
Tier 3 Baroda 30
South
Tier 1 Chennai 30
Tier 2 Cochin 30
Tier 3 Mangalore 30
Total 360

MAINS
The mains questionnaire shall be used to capture data from M-
Commerce users regarding the
a. When did respondent start using mobile phones to conduct
financial transactions?
b. Type of M-Commerce transactions commonly performed by
the respondent:
i. What is the number of transactions (by type) that the
respondents have performed during :
1. 2011, so far
2. Last month
3. Last week
4. 2010
5. Year 2009
ii. Average value of each type of transaction (2009-2012)
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Zone City Mobile Subscriber
M-Commerce
User Total
North
Tier 1 Delhi 550 30 580
Tier 2 Lucknow 350 30 380
Tier 3 Chandigarh 150 30 180
East
Tier 1 Kolkata 550 30 580
Tier 2 Patna 350 30 380
Tier 3 Bhubaneswar 150 30 180
West
Tier 1 Mumbai 550 30 580
Tier 2 Indore 350 30 380
Tier 3 Baroda 150 30 180
South
Tier 1 Chennai 550 30 580
Tier 2 Cochin 350 30 380
Tier 3 Mangalore 150 30 180
Total 4200 360 4560

What can be other Sources of m commerce users
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Sources of m commerce users
o M-Commerce Subscriber Database: Databases of people who
have participated in such transactions. The databases will be purchased
from various sources such as third party service providers, etc. We request
MTS to also provide a list of their list of subscribers using m commerce.

o Exit Interviews at Partner outlets: Exit interviews shall be
conducted at partner outlets/ affiliates who have tied up with M-Commerce
companies. E.g. Green Money Transfer Initiative between Corporation
Bank, Tata Teleservices and PayMate that allows sending & receiving of
money at over 700,000 retail points

o Exit Interviews at places frequented by target segments such as
movie theatres (here we are also likely to find people who have booked
movie tickets via m commerce), malls, schools, colleges and universities.

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How would you like to define the Target
respondents for
LISTINGS

MAINS
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Target Segment
Listings Segment:
Anyone (SEC A to E) who was 16 yrs and above and using a mobile phone for at
least the past 6 months.

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Target Segment
Mains Segment:
Mobile subscribers who have ever used (relaxed from last 6 months) any of the
following m-commerce transaction types:
Mobile commerce based Self-Recharges
Mobile commerce based movie/travel tickets booking, Shopping & 3
rd
party
payments
Mobile Banking (Money transfer, Cash deposit/ Cash with drawl), etc.
Mobile Remittances
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Sampling Method for
LISTINGS

MAINS
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Research Methodology
Listings Segment:

We have covered the households in a random manner.
Within each household we have tried our best to cover the Technology Decision
Maker (TDM) i.e. (Family member who takes the decision regarding purchase and
use of technology items such as mobile phones, PCs, etc.) or who ever in the
household was using/has ever used/most likely to use m commerce.


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Research Methodology
Mains Segment:

A mix of Random and Purposive interviews were conducted for this segment
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M Commerce India Market
Size & Projections
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The Framework
The research framework for market sizing of m-commerce users in India is an amalgamation of
insights gained from both primary (Qual & Quant) and secondary (desk) research. The broad
steps are detailed below
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Step 1
Defining the Universe
Estimating urban (above 14 years) population in tier-1,2 & 3 cities in India
Projecting the estimated population to current year
Estimating mobile penetration in tier-1,2 & 3 cities in India
Step 2
Estimating Mobile Commerce users penetration
Penetration of users by various services used
Step 3
M-Commerce market size
Total number of users currently using these services
Total number of transactions in volume & value terms
Growth rate for estimating future market size of these services
Defining the Universe
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Total Population
(Census 91, 01 &
11)
Urban Population
Tier I, II & III
cities
Population Tier I,
II & III cities
Above 14 years age
Urban population above 14 years of age in Tier I, II & III cities of India
Current Urban population above 14 years of age in Tier I, II & III cities of India
Decadal
Growth Rate
From random
listings
Current Mobile users in Urban population above 14 years of age in Tier I, II & III
cities of India
From census
Mobile
Penetration
M-Commerce Services Market Sizing
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Current Mobile users in Urban population above 14 years of age in Tier I, II & III
cities of India
% subscribers using
Mobile Recharge
Service
% subscribers using
Retail Purchase Service
% subscribers using
Mobile Banking Service
% subscribers using
Mobile Money
Remittance Service
Current mobile commerce users in Urban population above 14 years of age in Tier I,
II & III cities of India
From Primary &
Secondary Research
Growth Rate
Projected mobile commerce transactions in volume & value terms amongst Urban
population (above 14 years of age in Tier I, II & III cities of India)
From Primary
Research
(The impact of increase in population and mobile subscribers with time has been taken
into account while arriving at the forecast for next 2 yrs)
Ref to XL sheet
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Key Assumptions
The market size pertains to universe of Tier 1, 2 & 3 cities (In all 73 cities of which 8 are Tier 1
cities, 27 are Tier 2 cities and 38 are Tier 3 cities)

Census decadal growth rate used for arriving 2011 population projections city wise

Only those saying Very Interested (on a 5-point scale) to conduct m commerce transactions
over mobile phone/tablet PC over the next 1 year used for 2011-12 growth. We have used Very
Interested and some part of Interested score to project for 2012-13 (Hence we have
discounted the claimed intention by not using complete top 2 box scores)

We have taken into consideration only the active mobile users (and not the entire base claimed
by operators). This is about 61.7% of the total number of subscribers reported by TRAI & we
have assumed this proportion will remain same for 2012-13

To project for 2012-13 in volume and value terms we have used the average nos of transactions
p.a and the average last transaction value per subscriber per m commerce service respectively
and assumed it will remain the same in 2012 & 13

Population below 14 yrs of age is assumed to have no/negligible mobile ownership

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Total Value Market by Service
M Recharge M Retail M Banking M Remittance
2011
5,460 5,784 12,730 7,563
2012
31,965 39,491

118,333 72,811
2013
50,973 66,354 202,650 110,439
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Above mentioned figures are in Rs. mn
Thank You