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24Nov2014

Slow local take-up for location based services

Local businesses have yet to catch on to the potential that location based services can have on their organisation.

ALTHOUGH recent developments in the use of location based services are showing interesting potential, Johary Mustapha, president of the Malaysian Mobile Content Providers Association (MMCP) feels that this will not be a trend that will take off so soon among the local business community.

“I think there is still a lack of awareness amongst businesses how mobile technology can actually help increase their revenue,” he says.


LACK OF CONVICTION: Johary Mustapha believes that local businesses are still not convinced as to how location-based services can increase their revenue.

According to him, many local merchants are only beginning to learn of these possibilities, and have yet to be convinced that a feature like location-based services is necessary to drive their marketing efforts.

“They are still not willing to dive into proximity-based applications and are taking a wait-and-see approach. I think they are still sceptical about how this translates into more money for them. They have moved from knowing nothing about it to being aware of it, just that the push factor is not there yet.”

And even for those companies that do recognise that there are tangible benefits to using location based services, Johary feels they may still hold back from jumping onto the bandwagon because of the perception that “not many consumers want it” at the moment.


MASSIVE MARKET: Johary believes that once Malaysia’s smartphone penetration rates hit 60% or 70%, local businesses may become more motivated to adopt location-based services.

In his opinion, the early adopters have thus far been confined mostly to multinational corporations.

“Most of the companies which are spending a lot on digital advertising are foreign entities,” he says.

However, he believes that “peer pressure” will eventually influence local businesses to consider using location-based services to enhance customer relationships.

“As of 2014, Malaysia’s smartphone penetration has hit 40%. Once it reaches 60% or 70%, perhaps only then will merchants feel the pressure to make a difference in the way they promote their products or services,” he adds.

For now, though, Johary expects to continue to see many Malaysian organisations still relying on traditional approaches to branding and promotions. For example, through the use of TV commercials.

Retail adoption

Meanwhile, C.P. Lim, managing director at ATA Retail Solution Sdn Bhd claims that there has been plenty of interest within the retail sector with regards to the use of location-based services.

“Around 90% of our clients are giving us positive responses. It’s still a very new thing for retailers though, so it’s a question of when do they want to implement it and how much they’re actually willing to spend,” he says.

Among the challenges that most retailers tend to face in adopting location based services as part of their marketing strategy is that many of them don’t have a dedicated department to look into the maintenance and management of the data analytics that it entails.

“Human resources is one of the issues. Also, almost 80% of local retailers are still relying on very manual processes and systems. They may have a huge database, but might not have done much analysis,” he says.


PUTTING YOURSELF ON THE MAP: C.P. Lim demonstrating how location based services can be used to point consumers towards nearby retail outlets via a mobile app solution.

Besides that, Lim says it really depends on who does the decision making within a particular organisation.

“If it consists of those from the younger generation, they are usually quite comfortable with adopting this technology. However, those of the older generation often need more time to think it over and need lots of case studies and statistics in order to convince them that this is a good idea,” he says.

On the whole, Johary believes that government ought to play a bigger role in encouraging greater usage of newer technologies such as mobile solutions and location-based services.

“In the industry, there is a lack of incentive for using newer marketing models such as these. It’s the government’s responsibility to drive adoption and determine the speed of our economical progress. This can’t be dictated by the private sector alone,” he says.

Source: The Star Online
Related Story: Closer to you: The appeal of location based mobile services

  • 24 Nov, 2014
  • marilyn
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