Rural mCommerce

Although China's booming cities are the focus of so much development and attention, some 60% of the population still lives in the much less accessible countryside. For traditional specialist media operations to target them is almost impossible and certainly uneconomic.

Even if they can be targeted by online media, the extention of that into e-commerce is again unrealistic. Most of even the more affluent (a highly relative term in this case) consumers and business people in these areas have very limited payment options. McKinsey addresses the mobile payment solutions opportunity in an interesting article (free registration required).

It says:

McKinsey research shows that the mainland’s existing mobile Short Message Service network could be quickly and cheaply deployed to provide an SMS-based payment system in rural areas. Because the most expensive parts of the infrastructure—the mobile network and millions of mobile phones—are already in place, we estimate that the cost of this solution would range from less than $40 million to $60 million.

This is a not a new idea and the system, McKinsey says is well established in the Philippines:

The experience of the Philippines, where SMS-based payment systems have been widely adopted for some time, augurs well for China: Philippine consumers are rapidly catching on to new “mobile-wallet” systems. China is similarly well positioned to introduce such a service. Up to 15 percent of China’s rural population already subscribes to a mobile-phone network; we expect penetration to reach 22 percent by 2010 and 40 percent by 2016. Around 75 percent of current mobile subscribers use SMS, suggesting that there would be few technological obstacles to the adoption of mobile payments.

"The cheque is the text" doesn't sound like quite the same sort of excuse does it?