The “Far East” still “Far Ahead” in Mobile Commerce

POSTED BY Global Administrator
It has long been the case that the Far East has been far ahead of the West in the deployment and mass-market use of mobile commerce applications.  However, many of Juniper Research’s recent forecasts show that the Far East dominance may be challenged over the next five years as North America and Western Europe gain traction in mobile payments and mobile ticketing in particular. One of the key catalysts for this traction is the rollout of NFC.

But the Far East isn’t going to give up its lead easily (if at all) – this headline paragraph says it all: “South Korean operators have started out fast with their NFC rollouts, selling more than five million phones since last year, including 250,000 of the new NFC-enabled Samsung Galaxy Note devices in just a few weeks” (NFC Times article published January 12  2012).  These are NFC-enabled shipment volumes and user penetrations only dreamed about in the West today.

In the Far East, Japan was the front runner with an early ground-breaking, although proprietary, NFC-like technology called FeliCa.  But now that NFC has become internationalised through the NFC Forum, Japan is transitioning to NFC rapidly, ensuring its first mover advantage.  Add to this the ongoing mobile commerce cooperation between the two countries (for example KT and NTT DOCOMO have an agreement in place to launch cross-border mobile NFC services in both markets including payment, mass-transit ticketing and coupons during 2012) and there’s every chance, with such powerful synergies, that the Far East will continue to lead strongly.

So what’s been the secret of their mobile commerce success?  Apart from the early technology lead, it seems to be simply that the telcos have little domestic competition and have not been afraid to offer financial services themselves.  In the West, competition is much greater through deregulation, and you can’t turn the clock back on that, but I wonder if we shall start to see Western-based operators eschewing the mobile-financial-based mobile commerce business model and going it alone? There’s at least one big MNO name that reportedly intends to do that; we’ll have to wait and see what 2012 brings …