When we think about innovation, most often we are trapped with the paradigm where new products are associated with new technology. The product to be commercialized on the market must have new features that attract customers. As a precondition for these features, new technology must be embedded, hence investments for R&D need to be allocated.
Along with such investments, the acquisition of new knowledge to build the capacity to deploy an innovative idea needs to be orchestrated. Consequently, the capital expenditure is spent not only for the hard but also soft side of R&D investments.
But to extend an innovation, a company does not need to initiate radical things. Combining the existing competency with what is needed from the customer side may sometimes bring a unique value proposition for a company.
Consider this case. TNT is often associated with a delivery of goods, most often documents and other sample merchandises. Ordinary packages including fragile ones are inclusive. However, during the SEA Games in Bangkok, samples of blood from athletes need to be tested in China. These samples must be packed in certain temperature to keep the sample valid for testing. Thus, TNT launched its 'Medpak Thermo' service where samples are kept cold by packing them in dry ice.
Medpak Thermo service may be new for TNT. The company needs to source the packing box filled with dry ice, maintain the temperature inside the box, learn new packaging methods for blood samples and ensure the delivered sample meets the criteria for blood testing.
New processes were learnt, but definitely these ones were not new since packing blood samples for laboratory testing has been practiced for decades. The learning curve takes some time, but once TNT gains capabilities to deliver such thing, the company can maintain its business sustainability with this new service.
Showing posts with label Innovation and market. Show all posts
Showing posts with label Innovation and market. Show all posts
Tuesday, 6 September 2011
Thursday, 28 July 2011
Alfamart, Indomaret, dan toko Kembar
Di dekat rumah saya, terdapat sebuah toko kelontong bernama Kembar. Entah mengapa toko tersebut bernama demikian. Mungkin saja pemiliknya kembar siam. Atau bisa jadi anak dari pemilik tersebut kembar. Yang pasti dimula kami tinggal di kompleks tersebut, toko Kembar merupakan satu satunya toko kelontong di sekitar hunian kompleks.
Boleh dibilang kompleks yang terdiri dari tiga blok utama, blok D, E dan I merupakan daerah kekuasaan toko Kembar ini. Di daerah saya, blok E, setidaknya ada dua ratus rumah. Di blok D, terdapat lebih banyak lagi rumah karena ukuran rumah disini rata rata sekitar setengah sampai tiga perempat dari blok E dengan luas area dua kali Blok E. Sementara blok I merupakan daerah dengan luas area yang paling kecil, namun dengan rumah rata rata satu setengah sampai dua kali ukuran rumah di blok E.
Sudah tigapuluh tahun kami tinggal di kompleks blok E dan setidaknya sekitar duapuluh lima tahun toko Kembar memantapkan posisinya sebagai pemonopoli di daerah ini. Adapun posisi dari toko Kembar berada di jalan utama yang membelah blok E dan blok D. Blok I sendiri, sebenarnya sejajar dengan blok E, letaknya cukup jauh dari Kembar jika dibandingkan dengan kedua blok tersebut.
Satu satunya pesaing toko Kembar dimasa lampau adalah mini market Jameson yang berada di blok D. Namun toko ini tidak selengkap toko Kembar. Hanya berjalan lima tahun dan kemudian tutup. Sementara di daerah blok A, kurang lebih dua hingga tiga ratus meter dari blok D, praktis hanya Hero (sekarang menjadi Giant) yang masih beroperasi.
Melakukan transaksi di toko Kembar, layaknya toko kelontong, merupakan suatu keasyikan tersendiri. Dengan susunan barang yang boleh dikata acak-acakan, pembeli seringkali menyisir satu persatu rak untuk mendapatkan barang yang dicari. Pengelolaan susunan barang, boleh dikata belum baik. Memasuki toko, anda akan disambut oleh sebuah tempat berjalan yang membelahi dua bagian. Di sebelah kiri terdapat fotokopi dan beberapa peralatan kantor. Sementara disebelah kanan terdapat makanan dan minuman ringan.
Tidak jauh dari situ, terdapat kasir yang ditunggui oleh si Kokoh dan istrinya, sang pemilik toko. Meskipun nama aslinya tentu bukan Kokoh, namun seperti tipe warga negara Indonesia keturunan Tionghoa yang berdagang, julukan Kokoh selalu melekat di para pelanggan. Adapun si Kokoh, bisa menjadi sumber informasi letak barang sekecil apapun. Dengan gayanya yang unik, sesekali Kokoh berteriak kepada para penjaga toko untuk melayani pembeli. Si Kokoh pula yang menjadi kasir dan menyambut para pelanggan. Terkadang pada saat membayar, si Kokoh sering bersenda gurau dengan pembeli, membuat suasana menjadi cair dan akrab. Yang paling unik, dengan banyaknya barang di toko tersebut, tanpa bar code scanner, si Kokoh hafal semua harga barang. Entah ini dibuat atau memang hafal, hanya si Kokoh dan Tuhan yang tahu.
Kebutuhan mulai dari makanan ringan, sabun, sampo, beberapa barang kamar mandi seperti gayung, bahkan alat alat kantor dijual disini. Demikian juga tabung gas serta air mineral galon. Dibagian belakang terdapat beberapa alat kantor yang tidak terdapat di bagian depan. Yang menarik, untuk pembelian gas, pembeli dapat meminta pelayanan antara selama daerah yang dituju masih di kisaran ketiga blok tersebut.
Sejak lima tahun terakhir, dengan adanya Indomaret dan kemudian disusul Alfamart, serta dengan beroperasinya jaringan ritel Carrefour, pangsa pasar dari Kembar mulai menurun. Benar bahwa dengan adanya tambahan pelayanan cuci baju, Kembar masih bisa bertahan. Namun untuk jenis makanan ringan serta kebutuhan kelontong lain yang menjadi andalan toko ini, daya beli masyarakat sekitar mulai menurun. Membeli di toko semacam Alfamart dan Indomaret sangat praktis, disamping pengelolaan barang yang mudah, sehingga pembeli yang kurang cerdas sekalipun dapat dengan cepat menemukan barang yang dicari. Lagipula di kedua toko tersebut dipasang pendingin udara, sehingga membuat nyaman para pelanggan.
Ada satu kelebihan yang mungkin tidak didapat di toko Kembar. Kecepatan dalam transaksi. Pemakaian bar code scanner mempercepat proses transaksi, dibandingkan dengan daya hafal si Kokoh beserta mesin kasir jaman dulu yang masih digunakan. Kebanyakan pembeli di jaringan toko tersebut bukan hanya membeli satu atau dua barang kebutuhan. Terkadang bisa sampai sepuluh jenis dengan barang yang bervariasi. Penggunaan bar code scanner dalam hal ini tentunya sangat membantu.
Selain itu, diterimanya penggunaan debit card, semakin membuat pelanggan beralih dari toko Kembar ke Alfamart atau Indomaret. Dengan mudah pembeli di sekitar kompleks melakukan transaksi tanpa perlu harus mengeluarkan uang dari dompet, menghitung lembaran yang harus diserahkan, juga untuk kembalian dari kasir.
Faktor lain yang tidak kalah pentingnya adalah terdapatnya hiburan di jaringan toko tersebut. Setidaknya kedua tipe toko tersebut selalu menyalakan musik, apakah itu radio atau CD. Terkadang, televisi yang terpasang di Alfamart dinyalakan pada sore hingga malam hari sehingga pengantri di kasir dapat menonton sambil menunggu giliran barang mereka untuk dihitung.
Hanya baru satu bulan terakhir ini, Juli 2011, toko Kembar tutup. Seiring dengan waktu, si Kokoh beserta istrinya nampaknya sudah mulai memperhitungkan pembeli yang makin menurun. Kecuali untuk tabung gas, praktis barang dagangan si Kokoh juga dijual di Alfamart dan Indomaret. Adapun untuk jasa cuci baju, terdapat laundry star wash yang menyediakan pelayanan cuci basah dan kering untuk berbagai jenis pakaian dan bahan. Praktis tidak terdapat lagi nilai keuntungan yang didapatkan pembeli di toko Kembar.
Inovasi bisa dimulai dengan hal yang sepele. Bar code scanner membuat kecepatan transaksi meningkat. Penggunaan pendingin udara di Alfamart dan Indomaret membuat pelanggan lebih nyaman. Susunan rak yang rapih dan terkelola membuat pelanggan mudah untuk mencari barang. Adanya hiburan membuat pelanggan betah untuk berlama lama di toko, sehingga menimbulkan keinginan untuk membeli barang lain yang bisa jadi tidak terlalu dibutuhkan.
Di satu sisi, tutupnya toko Kembar merupakan kekalahan era keemasan toko kelontong. Era dimana pembeli dan penjual bisa berinteraksi, bersenda gurau dan tertawa. Di lain sisi, tutupnya toko Kembar merupakan sebuah refleksi bagi para pedagang untuk terus melakukan perubahan. Dalam bentuk sekecil apapun, perubahan tersebut dapat dideteksi oleh pelanggan. Pada akhirnya, pelanggan sendiri yang akan memilih kemana tempat yang paling sesuai untuk melakukan transaksi.
Boleh dibilang kompleks yang terdiri dari tiga blok utama, blok D, E dan I merupakan daerah kekuasaan toko Kembar ini. Di daerah saya, blok E, setidaknya ada dua ratus rumah. Di blok D, terdapat lebih banyak lagi rumah karena ukuran rumah disini rata rata sekitar setengah sampai tiga perempat dari blok E dengan luas area dua kali Blok E. Sementara blok I merupakan daerah dengan luas area yang paling kecil, namun dengan rumah rata rata satu setengah sampai dua kali ukuran rumah di blok E.
Sudah tigapuluh tahun kami tinggal di kompleks blok E dan setidaknya sekitar duapuluh lima tahun toko Kembar memantapkan posisinya sebagai pemonopoli di daerah ini. Adapun posisi dari toko Kembar berada di jalan utama yang membelah blok E dan blok D. Blok I sendiri, sebenarnya sejajar dengan blok E, letaknya cukup jauh dari Kembar jika dibandingkan dengan kedua blok tersebut.
Satu satunya pesaing toko Kembar dimasa lampau adalah mini market Jameson yang berada di blok D. Namun toko ini tidak selengkap toko Kembar. Hanya berjalan lima tahun dan kemudian tutup. Sementara di daerah blok A, kurang lebih dua hingga tiga ratus meter dari blok D, praktis hanya Hero (sekarang menjadi Giant) yang masih beroperasi.
Melakukan transaksi di toko Kembar, layaknya toko kelontong, merupakan suatu keasyikan tersendiri. Dengan susunan barang yang boleh dikata acak-acakan, pembeli seringkali menyisir satu persatu rak untuk mendapatkan barang yang dicari. Pengelolaan susunan barang, boleh dikata belum baik. Memasuki toko, anda akan disambut oleh sebuah tempat berjalan yang membelahi dua bagian. Di sebelah kiri terdapat fotokopi dan beberapa peralatan kantor. Sementara disebelah kanan terdapat makanan dan minuman ringan.
Tidak jauh dari situ, terdapat kasir yang ditunggui oleh si Kokoh dan istrinya, sang pemilik toko. Meskipun nama aslinya tentu bukan Kokoh, namun seperti tipe warga negara Indonesia keturunan Tionghoa yang berdagang, julukan Kokoh selalu melekat di para pelanggan. Adapun si Kokoh, bisa menjadi sumber informasi letak barang sekecil apapun. Dengan gayanya yang unik, sesekali Kokoh berteriak kepada para penjaga toko untuk melayani pembeli. Si Kokoh pula yang menjadi kasir dan menyambut para pelanggan. Terkadang pada saat membayar, si Kokoh sering bersenda gurau dengan pembeli, membuat suasana menjadi cair dan akrab. Yang paling unik, dengan banyaknya barang di toko tersebut, tanpa bar code scanner, si Kokoh hafal semua harga barang. Entah ini dibuat atau memang hafal, hanya si Kokoh dan Tuhan yang tahu.
Kebutuhan mulai dari makanan ringan, sabun, sampo, beberapa barang kamar mandi seperti gayung, bahkan alat alat kantor dijual disini. Demikian juga tabung gas serta air mineral galon. Dibagian belakang terdapat beberapa alat kantor yang tidak terdapat di bagian depan. Yang menarik, untuk pembelian gas, pembeli dapat meminta pelayanan antara selama daerah yang dituju masih di kisaran ketiga blok tersebut.
Sejak lima tahun terakhir, dengan adanya Indomaret dan kemudian disusul Alfamart, serta dengan beroperasinya jaringan ritel Carrefour, pangsa pasar dari Kembar mulai menurun. Benar bahwa dengan adanya tambahan pelayanan cuci baju, Kembar masih bisa bertahan. Namun untuk jenis makanan ringan serta kebutuhan kelontong lain yang menjadi andalan toko ini, daya beli masyarakat sekitar mulai menurun. Membeli di toko semacam Alfamart dan Indomaret sangat praktis, disamping pengelolaan barang yang mudah, sehingga pembeli yang kurang cerdas sekalipun dapat dengan cepat menemukan barang yang dicari. Lagipula di kedua toko tersebut dipasang pendingin udara, sehingga membuat nyaman para pelanggan.
Ada satu kelebihan yang mungkin tidak didapat di toko Kembar. Kecepatan dalam transaksi. Pemakaian bar code scanner mempercepat proses transaksi, dibandingkan dengan daya hafal si Kokoh beserta mesin kasir jaman dulu yang masih digunakan. Kebanyakan pembeli di jaringan toko tersebut bukan hanya membeli satu atau dua barang kebutuhan. Terkadang bisa sampai sepuluh jenis dengan barang yang bervariasi. Penggunaan bar code scanner dalam hal ini tentunya sangat membantu.
Selain itu, diterimanya penggunaan debit card, semakin membuat pelanggan beralih dari toko Kembar ke Alfamart atau Indomaret. Dengan mudah pembeli di sekitar kompleks melakukan transaksi tanpa perlu harus mengeluarkan uang dari dompet, menghitung lembaran yang harus diserahkan, juga untuk kembalian dari kasir.
Faktor lain yang tidak kalah pentingnya adalah terdapatnya hiburan di jaringan toko tersebut. Setidaknya kedua tipe toko tersebut selalu menyalakan musik, apakah itu radio atau CD. Terkadang, televisi yang terpasang di Alfamart dinyalakan pada sore hingga malam hari sehingga pengantri di kasir dapat menonton sambil menunggu giliran barang mereka untuk dihitung.
Hanya baru satu bulan terakhir ini, Juli 2011, toko Kembar tutup. Seiring dengan waktu, si Kokoh beserta istrinya nampaknya sudah mulai memperhitungkan pembeli yang makin menurun. Kecuali untuk tabung gas, praktis barang dagangan si Kokoh juga dijual di Alfamart dan Indomaret. Adapun untuk jasa cuci baju, terdapat laundry star wash yang menyediakan pelayanan cuci basah dan kering untuk berbagai jenis pakaian dan bahan. Praktis tidak terdapat lagi nilai keuntungan yang didapatkan pembeli di toko Kembar.
Inovasi bisa dimulai dengan hal yang sepele. Bar code scanner membuat kecepatan transaksi meningkat. Penggunaan pendingin udara di Alfamart dan Indomaret membuat pelanggan lebih nyaman. Susunan rak yang rapih dan terkelola membuat pelanggan mudah untuk mencari barang. Adanya hiburan membuat pelanggan betah untuk berlama lama di toko, sehingga menimbulkan keinginan untuk membeli barang lain yang bisa jadi tidak terlalu dibutuhkan.
Di satu sisi, tutupnya toko Kembar merupakan kekalahan era keemasan toko kelontong. Era dimana pembeli dan penjual bisa berinteraksi, bersenda gurau dan tertawa. Di lain sisi, tutupnya toko Kembar merupakan sebuah refleksi bagi para pedagang untuk terus melakukan perubahan. Dalam bentuk sekecil apapun, perubahan tersebut dapat dideteksi oleh pelanggan. Pada akhirnya, pelanggan sendiri yang akan memilih kemana tempat yang paling sesuai untuk melakukan transaksi.
Wednesday, 21 July 2010
Innovation adoption in rural areas: mobile internet in dwindling information gap
How can innovation in information technology be extended to cover not only its richness but also its reach characteristic?
The key here is that the transformation of technology platform from:
1. Products that need significant amount of learning to product less need of learning
2. Product having ‘higher’ price to ‘lower’ price (massive scale of economies)
3. Product that can be economically attractive enough (through its installed and network based) for companies to extend
As an example is the spread use of internet through mobile phone. At a decade ago (i.e. 1990s and early 2000s), when the use of internet was solely mediated through PC/Laptop with cable from the network operator, the digital divide issue was coined intensively and efforts to dwindle such gap were concentrated on the enlargement of wiring network infrastructure. The dominant users of the internet were supposed to be those in the middle class income or those opportune enough to be provided such information at their office.
Nicholas Negroponte, seeing the impact of the digital device on the lag knowledge for those living in poor countries or rural areas, introduced the OLPC (one laptop per child) enabling the next generation to be familiar with the information technology start up kit.
The revolution of mobile phone penetrates not only on the way people connect to each other, but also on the provision of information. The price of mobile phones, first introduced with over $ 1,000 each, has rapidly plunged to a range of $ 30. This price is affordable for rural communities. Not only the price is reduced, but the service is extended to the provision of information such as via mobile internet, with a reasonable price. The extension benefits not only those who has the ability to pay for information access both through mobile and wiring technology, but also for people who never think about the internet, let alone to use it.
Why the mobile internet can become or will become even effective in dwindling the digital divide. By looking at the three factors above, it can be seen that in comparison with the PC or laptop, the mobile phone is relatively straightforward in its function. It is solely tailored for communication but also can be extended for accessing information. Because its function is simple yet flexible enough, a mass scale adoption could be spread for wide range of communities, at cities, urban and rural areas.
With such opportunity, telecom operator is encouraged to invest on larger network by installing Base Transmission Station (BTS) in urban and rural areas. This installed base platform convinces mobile phone makers to introduce low cost mobile phones that can be absorbed by communities in rural areas.
The key here is that the transformation of technology platform from:
1. Products that need significant amount of learning to product less need of learning
2. Product having ‘higher’ price to ‘lower’ price (massive scale of economies)
3. Product that can be economically attractive enough (through its installed and network based) for companies to extend
As an example is the spread use of internet through mobile phone. At a decade ago (i.e. 1990s and early 2000s), when the use of internet was solely mediated through PC/Laptop with cable from the network operator, the digital divide issue was coined intensively and efforts to dwindle such gap were concentrated on the enlargement of wiring network infrastructure. The dominant users of the internet were supposed to be those in the middle class income or those opportune enough to be provided such information at their office.
Nicholas Negroponte, seeing the impact of the digital device on the lag knowledge for those living in poor countries or rural areas, introduced the OLPC (one laptop per child) enabling the next generation to be familiar with the information technology start up kit.
The revolution of mobile phone penetrates not only on the way people connect to each other, but also on the provision of information. The price of mobile phones, first introduced with over $ 1,000 each, has rapidly plunged to a range of $ 30. This price is affordable for rural communities. Not only the price is reduced, but the service is extended to the provision of information such as via mobile internet, with a reasonable price. The extension benefits not only those who has the ability to pay for information access both through mobile and wiring technology, but also for people who never think about the internet, let alone to use it.
Why the mobile internet can become or will become even effective in dwindling the digital divide. By looking at the three factors above, it can be seen that in comparison with the PC or laptop, the mobile phone is relatively straightforward in its function. It is solely tailored for communication but also can be extended for accessing information. Because its function is simple yet flexible enough, a mass scale adoption could be spread for wide range of communities, at cities, urban and rural areas.
With such opportunity, telecom operator is encouraged to invest on larger network by installing Base Transmission Station (BTS) in urban and rural areas. This installed base platform convinces mobile phone makers to introduce low cost mobile phones that can be absorbed by communities in rural areas.
Monday, 4 February 2008
E-Wallet: Transaction cost strategy?
If you are an opportune customer to join one of the leagues of e-whatever, you will use electronic payments (e-payment) as an instrument to pay your bills. As you might argue, by using this gizmo, you’ll avoid yourself from hectic queues in cashing your money at the bank. Subsequently, you can pay your bills without using cash taken from your pocket. E-payment also eases us to make various transactions at a single point with the facility of one stop payment service. With an ATM on hand, you can now pay bills of your telephone, mobile phone, electricity, internet, insurance, credit card and so on. Now, thanks to innovation, e-payment has been diversified to a different mode of payment known as the e-wallet.
The latter is quite interesting. Although people have been familiar with debit cards for quite some time, the inception of e-wallet as a method of electronic payment is quite recent in
On the other hand, the T-Cash of Telkomsel employs the user’s mobile phone as a medium to perform transactions. The SIM card inside the phone functions both as the mobile signal activation and as the wallet. The user fills the e-wallet at the ATM. Transaction is carried out by notifying the user’s phone number. The cashier will type in the phone number on the cashier machine. The amount of money in the wallet will appear on the screen. The cashier then deducts the wallet based on the transaction value charged to the customer.
Transaction cost strategy
Through the lens of strategic management, the use of e-wallet reduces transaction costs and shortens transaction time. Customers do not spend their time to cash in their money since they can use their e-wallet to pay their bills. From the merchant perspective, the adoption of the e-wallet cuts transaction time as well. Furthermore, with the pervasive use of e-wallets, merchants can start eliminating changes on the cashier machine. Payment verification activities such as those exhibited in credit or debit card transactions can be shortened since the e-wallet contains the money. This is quite different with a credit card payment in which a clearinghouse must verify both the merchant identification and the credit card status before the transaction proceeds. The e-wallet transaction is also faster than the debit card since the only thing required, except for some security reasons, is the amount of money contained in the wallet.
But the question remaining is in what way the use of e-wallet will pay off. How does it differentiate with credit and debit cards? What’s the real advantage of using e-wallet? Put it simply, will e-wallet work in
To answer the question, I will first assess two fundamental factors in analyzing the transaction cost strategy: the system and the market. I will address some system issues attributed to e-wallet issuers if they want to commercialize this payment method. Then, I will scrutinize the market of e-wallet. Specifically, the essay will assess the segmentation of the e-wallet through the lens of the customer attitude. From these factors, I will advise the future of e-wallet in
The system
It can be noticed that the concepts of e-wallet is derived from those in credit and debit cards. The real difference lies on the credit limit assigned to the e-wallet (both on SIM or “ordinary” card) and the refilling system. As it serves as a wallet, e-wallet issuers assign lower credit limits to the e-wallet than those given to credit and debit cards. Consequently, the security attached to the e-wallet system is rather loose compared to its two counterparts. Once the amount of money in the wallet is not sufficient, the user should know from the merchant that the transaction cannot be completed. Moreover, since the credit limit is relatively low, frauds can be identified earlier (e.g. during transactions) than those in debit or credit cards (Table 1). E-wallet users can detect irregularities once they use their wallet on the cashier machine. Lower limits assigned to the e-wallet and the refilling method eases the e-wallet holder to identify suspicious and unknown transactions. The refilling method forces the holder to fill the e-wallet, thus avoiding further money losses to the authentic owner.
Table 1. Comparison between credit card, debit card and e-wallet
Based on characteristics given in Table 1, we can draw some insights on benefits of the e-wallet as described in
From benefits given in
The market
Based on the system characteristics discussed above, it can be suggested that the use of e-wallet is a better proposition than debit or credit cards. From the customer perspective, e-wallet is a manageable electronic payment. The refilling system attached to the e-wallet enables users to control their spending, thus avoiding excessive money usages. If it is so, then we could promulgate that the use of e-wallet should cover larger market demographics to gain the economies of scale. Therefore, we could expect e-wallet adoptions not only confined in large cities but also in small/mid towns and even municipals.
However, I believe the pervasiveness of e-wallet will pose challenges if we assess the market of electronic payments. Although the e-wallet is a promising payment method once it reaches the economies of scale, permeating this payment for larger demographics requires infrastructures supporting e-payment systems. This means that the targeted region must have been connected with e-wallet systems both on the issuers and the merchants.
While most of the large cities in the nation have been equipped with such infrastructures, similar networks may not be available in mid/small cities/towns. Even if they exist, such infrastructures (e.g. ATMs and e-payment devices) may not be equally distributed throughout the targeted region. One cannot even expect the availability of these networks in municipals. Thus, the adoption of e-wallet is hampered by the lack of system availabilities easing customers in using their e-wallets.
Second, people living in mid/small cities/towns may not be used to electronic payments. Conservative payments may dominate the region. A limited number of electronic payments may exist in mid/small cities but the percentage of users using such payments will not be significant in commercializing the use of e-wallet. As a result, the adoption of the e-wallet will have difficulties in reaching the economies of scale.
We can presume that the adoption of e-wallet can only be acceptable in large cities. However, I believe that e-wallet issuers do not elevate the segmentation and differentiation of the e-wallet. Until now, the attitude of using e-wallet is indifference. People do not perceive the advantage of using this payment method compared to credit and debit cards. E-wallet is considered as a payment method overlapped with credit or debit cards. They may not even know that such product exist. I do not see campaigns to promote e-wallet in public spots especially in shopping centres where credit card issuers frequently set up stands to attract customers. Nor do I see advertisings on newspaper to penetrate this payment method.
Therefore, it appears that the e-wallet may lose its market shares over credit and debit cards should the issuers do not come up with a solid proposition distinguishing the use of e-wallet and its counterparts.
Conclusion
E-wallet is a new method to fill the “reach” gap on transaction payments. Either through the plastic or SIM card type, people assume that e-wallet is a substitute of both credit and debit cards. However, looking at the credit limit assigned to e-wallet, there is a misconception on when and where to use the e-wallet.
Challenges in commercializing the e-wallet are due to the limited users. E-wallet is expected to be used not only in large cities but also in small and medium cities. Yet, the network supporting the system may have not been equally distributed or even unavailable; leaving the pervasiveness of the e-wallet confined to the area where the infrastructures are clustered.
The adoption of the e-wallet poses challenges as it competes with debit and credit cards. People may be confused on when and where they use their e-wallet. Merchants may become dubious due to the limited consumers using this method. Thus, the hesitant use of the e-wallet creates multiplier effects hampering the pervasiveness of this payment method.
Recommendation
We expect e-wallet issuers invest in marketing activities making the e-wallet more appealing for customers. However, some crucial highlights that can be suggested for e-wallet issuers are related to the networking system supporting the e-wallet and the market differentiation of the e-wallet relative to its substitutes (
Issuers should not attempt to enter e-wallet markets unless they ensure the availability of infrastructure supports. This is not only restricted to the infrastructure but also the consumer attitude within the targeted demographics. Since prerequisites to induce the customer are the availability of the networking system and the adoption of the e-payment by merchants, e-wallet issuers should invest on infrastructures and distribution (e.g. merchant) channels, either through self investing or through cooperation with financial institutions.
The pervasive diffusion of the e-wallet is also related to e-wallet acceptances by credit and debit card users. Since these users may have decided occasions in using their cards, e-wallet issuers must define, identify and develop differentiation strategies to place e-wallet at different markets. I believe that cooperating with small and mid size merchants is a niche for e-wallet issuers in dispersing this payment method. E-wallet should be positioned as a payment method replacing a wallet. Thus, e-wallet markets should not intersect too much with debit and even credit card markets.
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