The Internet’s New Billion
September 1, 2010

Taking with it everything from ordering dim sum to finding a groom online, the digital revolution is sweeping across emerging economies impacting purchasing decisions, how we grow our social circle and empowering women and children in areas far-flung from urban chaos.

Recording to reveal the business catapulting the growth of the internet in Brazil, Russia, India, China and Indonesia, the Boston Consulting Group released a report entitled ‘The Internet’s New Billion’ – Digital Consumers in Brazil, Russia, India, China and Indonesia, otherwise known as the BRICI.  According to the report, the five countries will collectively double their Internet users to 1.2 billion by 2015, totaling three times the Internet users of the U.S. and Japan combined by then, fueling growth at media companies and phone carriers.

This growth will be driven by BRICI Internet-penetration growth rates of 9 percent to 20 percent annually from 2009 through 2015. While mobile phones with Internet access will support growth, personal computers will double in the BRICI countries to more than 920 million in 2015, according to the report.

In 2009, the BRICI countries represented about 45 percent of the world’s population and about 15 percent of global GDP, and had some 610 million Internet users.

“The Internet is already having a fundamental impact on consumption patterns, and the patterns we’re seeing are significantly different from those in the United States and Japan,” said report coauthor David Michael, who heads BCG’s Global Advantage practice.

Despite similarities across user segments, however, digital markets in Brazil and Russia are more advanced than those in India and Indonesia, and China is far beyond its fellow BRICI markets.

“India is going to be different from what we’ve seen in mature markets but also in emerging markets. It’s going to be predominantly a mobile experience,” said Mr. Subramanian, who says the Internet will transform itself in the process.

“The traditional Internet in its current form would be largely inaccessible even if it were to be available,” he said. “The language and literacy barriers in the country—those are formidable.”

Taking from China, already the world’s largest internet user base, in order to grow their market share global sites that want to keep the edge they already have in India, compared to some other emerging markets, will have to Indianize more than they have so far.

According to the report, social networking is more popular in Indonesia and Brazil than in any of the other BRICI countries. And while an extremely high percentage of Indian digital consumers use e-mail, Chinese Internet users have gravitated toward instant messaging. Further while a majority of Chinese spend their time online listening to music, Indians use the internet to enhance personal productivity, such as job alerts or continuing education or visit matrimonial sites, something that is uniquely Indian.

BRICI Internet users are much more likely to pay for online services than for content though Indian and Indonesian users are quite reluctant to pay at all, said the report. User fees, subscriptions or e-commerce aren’t going to be major sources of earnings for a while.

PC penetration rates in Brazil and Russia are expected to exceed 50 percent in 2015. Currently, the penetration in Brazil and Russia is around 32 percent, while in China it is only about 20 percent. India and Indonesia have PC penetration rates of only about 5 percent. Comparatively, it is about 90 percent or more in the United States and Japan.

Internet cafes and mobile phones will also act as important means of digital access. Mobile phones are expected to be used more than the PC’s mainly because of low average disposable incomes in many parts of the BRICI countries.

“The commercial opportunities in these digital markets are rapidly evolving,” said report coauthor Yvonne Zhou, a principal in BCG’s Beijing office, “and the presence of strong local competitors in many of these markets means that the ‘incumbent’ digital-market leaders in the United States and Europe should not take success in the BRICI countries for granted.”


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