Future Insight:
Mobile Commerce
in Japan
Mobile Copenhagen 2009
June 16, 2009



              Christopher Billich
What I will talk
about in the
next 30 minutes
Why the Mobile Web
is huge in Japan
Some interesting
Statistics
Mobile Shopping
via Browser
Mobile Shopping
via NFC
What I won’t talk about
daddytypes.com
I work for a company called
based
somewhere around here
                        nasa.gov
The
                            Shameless
                            Advertising
                               Part




which works for companies like
The
Shameless
Advertising
   Part
The
                       Shameless
                       Advertising
                          Part




Who all want to know
One Thing:
The
                          Shameless
                          Advertising
                             Part




“How can we apply
what already works in Japan
in our mobile market?”
“Wheel” [(h)w ēl]
circular object rotating on an axle
need not reinvent
Why look for answers in Japan?
“It’s when a
technology
becomes
normal, then
ubiquitous, and
finally
so pervasive it’s
invisible,
that the really
profound changes
happen [...].”
108 million
mobile subscribers
9 in 10 use the
Mobile Web
...and they use it lots
Mobile Web Usage Frequency, 16-24 year-old users

 “At least daily”: 90%
  “More than an hour daily”: 61%

   24%
                                22%


                       15%                  16%

                                                            13%




                                                                              4%
                                                                                            3%
   >3 hrs             2-3 hrs   1-2 hrs   30 min-1 hr   Daily, <30 min   Less than daily   I don’t

 Source: Infinita, April 2008
Why that is




istockphoto.com
Operators: benevolent dictators
High-Spec Handsets
No device fragmentation
Unwalled Gardens
Revenue share
favoring content
providers




                   istockphoto.com
Content Provider Revenue Share

30-50%
Carrier X
            70%
            Android
                      70%
                      iPhone
                               70%
                               Nokia
                                       90%
0 ,- -
¥         Messaging is
          (almost) free




                  istockphoto.com
...yet extremely
rich:

10,000 characters
Mobile      PC
Multiple Links
Emoticons
Attachments
Almost everyoneon 3G
  4 in 5 of them on 3G
40% of mobile data users
on data flat rate plans

                           istockphoto.com
The
Low Entry Barrier
Gym Membership
Pricing Model
The Secret Sauce
Key differences to other markets

                              Same cost for         Flat rate data
     User Experience Level                                                 >90% 3G
                               on- and off-          with “free”          penetration
                               deck access            messaging



                              Operators
                                                                          Operators
     Operator-Handset Maker    control              All handsets          pay handset
     Relationship Level        handset              SIM-locked              makers
                               makers


                                                     Operator
    Operator Business Model    Email, not             revenue              (Open)
    Level                        SMS                share favors          standards
                                                        CPs


    Regulatory/Government           Competition on network technologies
    Level

                                              No spectrum license costs
Market Volume                                                                    3.06

 Mobile Commerce and Auctions (US$ billion)
                                                                                  1.79
        Auctions
        Transactions
        Services
        Goods
                                                                                  6.23


                                                                           1.85


                                                      1.55                 1.34


                               1.30                   1.23
                                                                           3.39
                               1.11                                               9.17
        1.12                                          2.71
        0.89                   1.93
        1.65                                                               4.44
                               2.58                   3.29
        1.54

       2005                   2006                   2007                  2008   2011
Source: Mobile Content Forum (2005-2007), Infinita (2008 est.; 2011 est.)
Mobile Commerce User Behavior
 Usage and Usage Intention

                                                             Active Usage
                                                             Very interested
                                                             Interested
                             4%                              Undecided
                                                             Not really interested
                                                             Definitely not interested
                                                  29%        Don’t know
           34%


                                                     1%
                                                    4%
                          17%               11%



Source: impress R&D, 2008 (Mobile Internet Users, N=3,178)
Mobile Commerce User Behavior
 Usage by Demographic
 Male Users                                              Female Users
                                                                                                           No
                                                                                                           Yes



          62                                             64        64      64      63
  71            71      69      74
                                        79                                                 82
                                                91                                                 92




          38                                             36        36      36      37
  29            30      31
                                26
                                        21                                                 18
                                                 9                                                  8
  Total   10s   20ies   30ies   40ies   50ies   60ies     10s      20ies   30ies   40ies   50ies   60ies


Source: impress R&D, 2008 (Mobile Internet Users, N=3,178), in %
Mobile Commerce User Behavior
  Preference Criteria

              Trustworthiness                                                63.1

             Ease of purchase                                             60.3

                Loading speed                                             59.9

                 Convenience                                          54.8

Ease of reaching products page                                     49.4

  Ease of comparing products                                41.0

  Degree of information detail                       33.3

    Quality of product search                    27.9

                       Design                 22.8

           Ease of registration              22.4


Source: IMJ Mobile, 2008 (Active Mobile Shopping Users, N=312), in%, multiple answers
Mobile Commerce User Behavior
 Payment Preferences

           Cash on Delivery                                               65.0


                Credit Card                                    49.4


   Pay at Convenience Store                          36.1


               Bank Transfer               22.6


              Postal Transfer             20.5


        via Mobile Phone Bill   6.3




Source: impress R&D, 2006 (Active Mobile Shopping Users, N=795), in%, multiple answers
Mobile Commerce User Behavior
 Product Categories

                    Fashion                                              39.5

           Books, Magazines                                          35.7

                  CD, DVD                                     30.3

                 Cosmetics                           22.4

                      Foods                        20.6

       Travel, Accomodation                 14.8

    Furniture, Design Goods                13.7

              Health Goods                 13.4

                 PC-related               12.4

                     Games               11.4


Source: impress R&D, 2008 (Active Mobile Shopping Users, N=927) in%, multiple answers
Mobile Commerce User Behavior
 Spend per Year (in US$)

                                                                  up to 29
                                                                  30-49
                                                                  50-99
                        5% 1% 12%                                 100-299
                9%                                                300-499
                                                                  500-999
                                                                  1,000-2,999
                                                                  3,000-4,999
          11%                                       15%           5,000+




                    24%                       20%



Source: impress R&D, 2008 (Active Mobile Shopping Users, N=927)
Mobile Commerce User Behavior
 Usage Frequency

                                                         Not at all
                                                         Once a year
                                                         2-4 times/yr.
                       10%                               5-9 times/yr.
                2%                       16%             10-19 times/yr.
                                                         More than 20 times
              8%                                         Don’t know


           11%


                   17%                           37%




Source: impress R&D, 2008 (Active Mobile Users, N=927)
Mobile Commerce User Behavior
 Average Spend per Year by Reference Group (in US$)

         2007
         2008




                                                                                                           411



                                                                                              205

                             89                                        103
          77                                         81


             Mobile Users                          Mobile Data Users                           Mobile Shoppers

Sources: impress R&D, 2008/2007; Mobile Content Forum 2007; Infinita 2008 (est.); includes Auctions
Product Recognition
Camera! ER Search
Product Recognition
Camera! ER Search
Operator/Retailer Collaboration
au Shopping
Shopping for Labor
Otetsudai Networks
Luxury Goods meet Manga on Mobile
Louie Vuitton
Love Soap and Runway Shows
Girlswalker/Tokyo Girls Collection
Mobile TV with Built-in Shopping
1seg
Mobile NFC
                                         Enabled: 73%
                                         Usage: 18%




Source: impress R&D, September 2008
Base: All Respondents, N= 3,178 (2008)
Payment
(Prepaid & Credit)
Coupons/CRM
Flight Check-in
:
“Lifestyle Infrastructure”
a.k.a.
Glued to the screen 24/7.
The second-best
screen to be glued to:
Check out www.infinita.tv
(it’s completely free)
Thank you!
billich@infinita.co.jp

Future Insight: Mobile Commerce in Japan