Recently I published a forecast about mobile subscriptions and mobile subscribers (people) by region, worldwide. In 2012, more than half of the world’s population — around 4.3 billion people — will own at least one mobile handset. In emerging markets, where the penetration of landline phone connections has been low, the adoption of mobile phones has soared over the past five years. Mobile handsets are able to provide a cheaper and more convenient means of telecommunications access. They are breaking down barriers to entry — and have been received with welcoming hands and ears.
In the recently published Forrester Research World Mobile Adoption Forecast, 2011 To 2016 (Global), we break down the numbers and growth drivers for the adoption of mobile Internet across the globe. Many consumers who have not been able to go online will now get the opportunity to access the Internet due to declining mobile data costs. About a fifth of the world’s mobile subscribers are currently using their mobile handsets to go online. According to our research, the global penetration of mobile Internet users will exceed that of PC-based Internet users in 2016.
The New York Times recently published an article based on a Forrester report (Mobile Is The New Face Of Engagement) about the uptake of smartphones worldwide in the years to come. And for 2011 it was estimated that just under 500 million smartphones were shipped. Knowing the drivers behind the growth of smartphones gives businesses confidence in mobile technology investment — even when uptake is currently still limited.
In the US today, Consumer Technographics® data shows that mobile usage is still far from mature in many industries. Take the financial industry as an example: 21% of US online adults with a mobile phone do any form of mobile banking versus 73% of US online adults who do online banking. When looking at the different generations, we see that younger generations, who are more likely to be early smartphone adopters, dominate in mobile banking.
Brands rarely enter a market by selling direct on their websites. Most brands enabling eCommerce on their global websites today already sell in these markets through traditional retail channels — the online sales channel simply becomes a new way to reach consumers.
Country selection is not always dictated by market size. Brands expanding their online offerings in Europe, for example, often focus first on the UK, France, and Germany. After the big three, however, the ease and convenience of serving other markets often trumps market size.
Online sales strategies differ by market. Rare is the brand that has an identical offering in every international market. Most brands that offer eCommerce-enabled sites also provide informational sites in other markets, with little consistency in how the informational sites direct online shoppers to the brands’ retail partners.
As we look back on the year 2011, eCommerce organizations continued to expand their global reach. A growing number of US and European retailers started shipping internationally. Brands enabled eCommerce on their own websites in new markets and launched online stores on marketplaces in multiple countries. Other companies with an interest in global eCommerce used the year to gain insights into new markets, determining which ones to prioritize in the years ahead. Rumors swirled about Amazon preparing to enter India. Or Brazil.
For many companies, however, the globalization process is still just beginning. Aside from a handful of companies that operate eCommerce sites around the world, few companies have a truly global online footprint. The growing number of US- and European-based companies that ship internationally will see revenues increase from these markets, but will start to hit a language ceiling: Close to two-thirds of online consumers in both France and Germany, for example, agreed with the statement, “I only shop from websites in my native language.” In the UK, the percentage is close to three-quarters.
2012 will not be the year that eCommerce organizations blanket the globe with localized offerings – they will, however, continue stepping into international waters. Next year we expect to see :
Over the past year, we’ve worked together with the forecast team at Forrester to help eBusiness professionals understand the size of different online retail markets around the globe. Last year we published our first look at the online retail markets in some of the major markets in Asia-Pacific — this year, we’ve just published our first forecast for two of the largest online retail markets in Latin America, Brazil and Mexico. Some findings from the report include:
Brazil is — and will remain — the powerhouse in the region. With more than 40% of the online users in the region and a steadily growing economy, it’s not surprising that Brazil’s eCommerce market will outpace all others by a wide margin. Brazil’s projected 2011 sales of almost $10B put it behind other major online retail markets like France and South Korea but ahead of smaller ones such as the Netherlands and Italy.
Mexico’s online retail market is small today —but growing by a CAGR of almost 20%. With less than half of the online users of Brazil and limited online spending, Mexico’s online retail market remains a small fraction of the size of Brazil’s. Average online spending per buyer will not increase significantly over the next five years, but the sheer number of online buyers will.
The Groundswell is now global. Social media has entered the mainstream in every single market Forrester regularly surveys — and in most of those markets, social media use is at 75% or higher. Australian, Japanese and Italian online users all show stronger adoption of social media than Americans do – and Chinese, Dutch and Swedish users have nearly pulled level with the Americans. And in 2010 Facebook reported that more than 70% of its active users were outside the US, while Twitter said more than 60% of its accounts come from outside the US.
The simple fact is that if your company has a social media program, that program is global — whether you want it to be or not. And this isn’t just a nuisance or a language issue. Failing to recognize the global nature of your social programs means you might be telling foreign users about products that aren’t available in their countries (for instance, Toyota UK reached more than 100 million people with a fantastic blogger outreach program for its iQ model; but it turns out that more than 95% of those people live in countries where the iQ isn’t for sale). Or you may be advertising discounts and promotions to which many users don’t have access (for instance, while Amazon’s Facebook page promoted a special price of $89 for the Kindle last November, a Kindle cost almost twice as much in the UK — and wasn’t available at all in most other markets). If you work in a regulated industry like financial services or pharmaceuticals, you risk running afoul of government regulators.
I've always loved examples of the crossover between online and offline influence; my 2009 report The Analog Groundswell contains some of my favorite examples of that overlap. Our new London-based Interactive Marketing Research Associate James McDavid is here with the story of how Smirnoff brought social media into the real world -- and how it had a bit of fun in the process:
The weekend of November 27th saw the culmination of a multinational marketing campaign by Smirnoff that showed the extent to which a clear, well-executed social media strategy is able to drive engagement with a brand across multiple regions and interactive channels.
Using Facebook pages and Twitter accounts, Smirnoff asked fans and followers in 14 cities (such as London, Rio, Miami and Bangalore) what made the nightlife in their city unique -- and then wrapped all the best elements from each city into shipping containers and delivered them to other host cities. Smirnoff posted a steady stream of Facebook status updates asking fans to say which city they’d like to exchange with. The company also made videos showing the shipping containers being filled -- as well as videos of the parties to celebrate the crates' departures -- and posted them to its YouTube channel. Once the crates arrived, Smirnoff threw the parties in its new locations, with its fans and attendees generating even more content and sharing it online.
One trend over the past year has been a growing interest in markets outside of North America and Europe. We're getting an increasing number of inquiries about markets in Asia-Pacific, Latin America and the Middle East - companies are anxious to map out their strategies for major eCommerce markets like Japan and China, as well as others such as Brazil and Russia. Retailers with an offline presence in affluent markets like the Gulf States are considering supplementing their traditional retail channels with an online one.
If you're looking to expand into any of these areas of the world, I wrote up some observations which were just published in Internet Retailer yesterday. Have a look if you're interested in emerging trends among online buyers in China, Japan, South Korea, Australia, Brazil and the UAE.
The past couple of months have seen a number of new initiatives and shifts on the global online retail front: Zara went live with a series of eCommerce sites (in five languages in Spain alone) while Gap started selling to an international online audience. At the same time, eBay conceded the market in China and looked to partner with market leader Alibaba. More companies have started coming to us asking about eCommerce in less traditional markets, with markets like Russia and Saudi Arabia being brought up with increasing frequency in our calls with clients.
Working in Europe, I'm constantly hearing about social media programs designed for one country accidentally reaching users in other countries -- especially when they're done in English. Toyota's excellent social media-focused iQ car launch in the UK attracted attention from the US, where the car isn't available. Yesterday a client told me that their Australian marketing team launched a Facebook page that they thought was just for their market -- but when they looked at the analytics, they found that only about 5% of the page's fans were Australian, with the rest coming from other big English-speaking markets.
As I see it, there are two big challenges when global companies use social media:
How do you best leverage social media resources from one country (be they staff, technologies, partnerships, or content) across other countries to improve your efficiency and effectiveness?
How do you keep social media messages that are appropriate for just one market (because product availability, or specifications, or pricing, or marketing message can vary from place to place) from "bleeding out" to reach users in other markets?