Is a New Era for Japan’s Mobile Wallet Coming?

KDDI, a Japan's mobile carrier, announced that they will launch “au Wallet”, mobile wallet which has both e-money and point reward program, in the coming May 2014. This mobile wallet is available for not only online shopping but also offline shopping at more than 30 million merchants. KDDI has pushed forward 3M strategy – multi-use, multi-network and multi-device a couple of years ago. As a part of that, they are launching new O2O (online-to-offline) payment service. “au Wallet” can be accessed from both PC and mobile devices and will used MasterCard prepaid payment system for their payment processes. Also, they have a unique function for point program. When customers use this mobile wallet, rewarding points will be saved up and customers can use reserved points for their mobile bill payments. KDDI has some 34 million customers as of February 2014 and based on the customer base, they are targeted to create US$ 12 billion O2O market by 2016. Also, they will utilize big data analysis to improve the service. Source: KDDI KDDI starts this service with a solid customer base and a significant number of acceptances. However, it might be difficult to meet the goal they are aimed at because it might take time to influence customer behaviours. In Japan, mobile payment has existed since before smartphones spread but Japan has not achieved great success in mobile payment. However, the situation surrounding mobile wallet has been changing little by little. In Japan, the number of smartphone users has been increasing steadily and smartphones spread at a certain extent and the number of e-money users has been growing firmly. Therefore, au Wallet has a enough potential to success in O2O market. To lead this service toward success, KDDI should be sensitive to customer behaviours and try to add new twists continuously to their mobile wallet service with their CRM analysis.