WW-161 -- NTT DoCoMo and McDonald's establish mobile payment and marketing platform

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J at pan Inc presents the Wireless Watch Newsletter:

W I R E L E S S W A T C H

Commentary on the Business of Wireless in Japan
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Issue No. 161
Tuesday March 13, 2007
Tokyo

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CONTENTS
+ Viewpoint: NTT DoCoMo and McDonald's establish mobile
payment and marketing platform


*NTT DoCoMo and McDonald's establish mobile payment and
marketing platform*

NTT DoCoMo and McDonald's Japan will jointly start an
e-marketing initiative based on DoCoMo Osaifu-Keitai e-wallet
services. Both companies agreed to establish a joint venture
to plan and manage e-marketing promotions to McDonald's new
membership club, and the introduction of DoCoMo's iD-platform
for mobile-phone credit cards and ToruCa e-coupon service
at McDonald's stores. McDonald's will take a majority share
of 70% in the new company.

This initiative integrates the huge customer bases of both
companies. Yearly, McDonald's receives more than 1.4 billion
people visits in its 3,800 stores. DoCoMo has currently more
than 52 million subscribers.
The services will start in October 2007.

Currently, McDonald's mainly uses newspapers and TV for
its campaigns. Campaign preparations usually take several
months. Issuing and distributing coupons is also expensive.
Another benefit is that mobile payment processing is faster.
Speed is key in the fast food industry - a 30 second reduction
in processing time, increases sales with 5%.
E-coupon and mobile campaigning also allow for more targeted
marketing according to the user profile and location.
Effectiveness of promotions can also be directly measured
through user ID recognition and feedback.
McDonald's will migrate two million members of their existing
membership services to the new platform.

iD credit payment service is a credit payment service that
enables the user to shop or withdraw cash by simply holding
up the user's Osaifu-Keitai over a compatible reader/writer.
The service is based on post-payment.

DoCoMo is keen to create a success story for Toruca.
The service will enable users to obtain information by simply
waiving their phones in front of dedicated readers/writers
installed at the restaurants. Usage of Toruca is not only
limited to McDonald's. It is basically suitable for any shop
outlet. For example, when buying a DVD at a store using the
e-wallet additional information about the movie can be
retrieved from the reader/writer terminal. The shop can offer
even a promotional e-coupon or membership information can
be exchanged. The information obtained from the reader/
writers will also be available at i-mode sites.
The Toruca service is free of charge, except for data traffic.

DoCoMo hopes that the joint e-CRM platform with McDonald's
will give Toruca a push in the market. It is not know if and
how the other mobile carriers will offer similar services.
We expect that they will follow with a one or two-year delay
like they did with Felica e-wallet services.

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STAFF
Written by Arjen van Blokland; edited by the
J at pan Inc staff (editors at japaninc.com)
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