SMEs missing out on m-commerce benefits

Mobile commerce applications have the potential to offer both time and cost savings to Hong Kong's struggling small and medium-sized enterprises (SMEs), but few companies appear to be exploring these options.

Electronic commerce and m-commerce can be ideal tools for smaller companies, according to wireless technology specialists. "SMEs have small workforces and spend little time in their offices. The time and cost-saving benefits of being able to conduct business on the road are obvious," said Vander Ng, chief operations officer at Realvision Technology Ltd., a Hong Kong-based wireless applications provider.

Both mobile applications providers and industry experts agree that the conditions in Hong Kong are right for m-commerce to thrive. "The mobile penetration rate in Hong Kong being very high, along with the high acceptance level of mobile devices, I believe that m-commerce will feature strongly in businesses sooner rather than later," said K.T. Yung, general manager of the infrastructure and quality division at the Hong Kong Productivity Council (HKPC).

However, the harsh reality is that SMEs are not making use of m-commerce despite its apparent benefits. Most wireless vendors have seen their business come from the enterprise market rather than SMEs. "We do not as yet have any SME clients. That is not to say that they are not interested or are not inquiring," said Allen Lee, chief IT consultant at EMobile1010 Co. Ltd., a local developer of PDA-based applications. "It's just that when it comes to actually investing and implementing in these schemes, SMEs tend not to take that final step."

"Most of our business is admittedly with larger enterprises, SMEs do not like to take the lead with new technology and will adopt a wait-and-see approach," said Raymond Wong, managing director at JungleSoft Net Ltd., a Hong Kong-based developer of mobile applications.

The Hong Kong Productivity Council argues that in many cases, cost shouldn't deter SMEs from investing in mobile applications. "Most SMEs can quite simply adapt existing office systems to adopt an m-commerce approach," said Fritz Chiu, principal consultant at HKPC. Boxed software is available to SMEs that doesn't require high investment into hardware, while mobile phones and PDAs are quite affordable, he said.

Vendors may also be too focused on enterprises, with too few offering tailored applications for SMEs, Chiu said. He cited one firm, CyberM International Holdings Ltd., a Hong Kong-based software developer, that takes more of an SME focus. He also offered an example, where CyberM had worked with a stationery company to adapt software to take orders, transfer data, process transactions and arrange delivery while at customer sites.

Even CyberM admits that the present market lies with the larger corporate companies. "Even we are looking at corporations, they understand their own needs and how m-commerce can address them," said Raymond Yip, sales director at CyberM. He added that, "for the time being (enterprises) also bring in the higher revenues. SMEs, though interested, find it hard to communicate their needs."

Therein lies another problem for SMEs. A poor understanding of m-commerce applications and implementation is a key factor in the decision not to employ it. Most SMEs understand the concept, but have yet to see how it is best applied, according to Chiu at HKPC. "Mobile commerce is a straightforward concept, it isn't a complicated technical subject, that's why the potential is so good for SMEs," he said.

"SMEs in Hong Kong are rather conservative, and they are not far-sighted enough in making investment in IT. They demand justification," said Realvision's Ng. He added that most SMEs would only react when they can see the savings and benefits demonstrated.

The culture of most SMEs prevents their speaking about their own operations in fear of giving too much away. "The biggest barrier is the lack of live examples of SMEs using mobile applications," Chiu noted. Businesses in Hong Kong "generally follow the lead, at the moment there isn't much lead." He added that, "without more cases, there will be very little uptake."

To alleviate the perceived complexity of m-commerce, SMEs need guidance and education, said CyberM's Yip. "For that we need larger bodies to engage in this process, for example the government," said Yip. Other means of making it easier for SMEs to adopt m-commerce is through an application service provider (ASP) type model, Chiu said.

One example is the M-Coupon project launched in February by ideaCulture Ltd.'s Cherrypicks, a local wireless application provider, with Hutchison Telecommunications Ltd.'s Orange mobile network. The project allows retailers and merchants to offer special deals and marketing information to targeted customers of Orange, according to Denny Lee, chief operating officer at Cherrypicks.

Consumers simply receive promotions via short message services (SMS), which contain all relevant information about the retailer, the offer and a serial number unique to the coupon. Retailers receive reports on the profile of the people that redeemed their coupons and pay for this service based on the number of SMS messages sent and received by the operator, as well as coupons redeemed. Companies that have used the promotion include Garden Flower shops, Genryoku Sushi outlets and the Double Rainbow ice cream chain.

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