In recent years, I’ve been communicating more frequently with friends and family online through email, Skype, and chat. More recently, I have been able to communicate with coworkers digitally across the globe on a daily basis even though I never get to see them in person. It’s no secret that the internet is global and it’s also no secret that the BRIC countries, which consist of Brazil, Russia, India, and China, are each developing in their own unique and fast ways. Among the similarities that these developing countries share is that internet usage is increasing more than ever before. As the BRIC analyst here at gap, I was interested to find how these countries are changing in the digital age and what specifically about internet usage is growing.
BRIC countries have been on the radar as the world’s source of global growth, as well as the source of exciting changes in internet usage. In the next five years, it is expected that internet usage in these countries will become more distinct. The growth and change is due not only to the size and speed of these countries transformation of the digital landscape but also the actual online habits of these internet users.
Right now, about 60 percent of BRIC internet users are under the age of 35. It is estimated that by 2015, these countries will have more than 1.2 billion internet users, which is well over 3 times the amount of internet users in the US and Japan combined. The digital markets in Brazil and Russia are more advanced than India, while China itself is by far the most advanced compared to the other three countries.
In terms of how internet is used varies from country to country but overall, personal computers are much less prevalent than mobile devices in the BRIC countries. Mobile devices and internet cafes are where most of the digital consumption occurs. By far, mobile phones are the most popular form of using the internet in the BRIC countries with about 1.8 billion SIM devices, which exceeds the usage in the US and Japan, which has about 394 million. According to Boston Consulting Group (http://www.bcg.com/), PC penetration in Brazil and Russia is about 32 percent while in China it is about 20 percent and India is less than 5 percent. By comparison, PC penetration in the US and Japan is about 90 percent. .
Russia leads in mobile phone usage (many Russians own more than one SIM card) followed by Brazil, then China and India. Russians take advantage of prepaid plans which are popular and will become more popular in the other countries like Brazil and China. Recently, PC and mobile device affordability has amounted to the emergence of local brands that offer lower prices with good functionality.
Younger BRIC residents are seeing their incomes grow and are adjusting their lifestyle accordingly to accommodate to their growing disposable incomes. The younger generation also tends to be more open to new things and more comfortable with technology. Many of them are using the internet as a source of entertainment and a place for self-expression and communication. Instant messaging is much more popular in the developing BRIC countries than the developed countries, as are online music and games. Let’s take a look at each country’s internet usage patterns:
Brazil – Oi!
Brazil is a fairly urbanized country and most of the population living in the cities. However, in less wealthy areas of Brazil users go to LAN (local area network) houses to access the internet. More affluent users are “always on” meaning they use multiple media and internet sites. Brazilian consumers in their forties and fifties go online to check email and news, seek entertainment, and participate in online social networking. Social networking in Brazil is more popular than in the other of the BRIC countries.
Cost and availability are also key factors in influencing digital habits in the country. In Brazil, broadband costs are high, limiting the number of in-home internet users. Mobile phone usage is fairly popular but is still relatively new in Brazil. Only about 11 million Brazilian mobile phone users use mobile internet.
One growing trend in the country is internet shopping, which has become adopted by about 17 percent of Brazilian Internet users. It is an emerging trend especially for lower cost items. Even those Brazilian consumers that do not make purchases online use the internet for product information and price comparisons.
In terms of most visited sites in Brazil, they are owned by multinationals like UOL (Brazilian version of AOL), Globo (news and entertainment portal), Terra, iG (both are classic portals like UOL), and Mercadolivre (Latin-American online auction site), all of which are local sites. Brazil’s social networking platform from Google – Orkut.com is the leader although Facebook and Twitter are becoming more popular among higher income brackets.
Russia – Privet!
In Russia, about 12 percent of mobile phone users access the internet through their handsets. Wealth gaps are less significant in Russian than the other BRIC countries. Widespread mobile device ownership and inconsistent fixed-line availability contribute to the emerging trend of mobile phone internet usage.
Russian fixed broadband costs vary dramatically by region, for example, in big cities like Moscow and St. Petersburg, unlimited traffic broadband costs are about $10 to $15 per month compared to Murmansk, where it can cost as much as $120 per month.
Russians are active mobile users and search engine use and email are the two leading online activities. More than half the users use instant messaging and about 21 percent shop online – the second highest proportion after China among the BRIC countries. Online social networking is also increasing especially on Russian sites like Vkontakte.ru and Odnoklassniki.ru. Almost three quarters of Russia’s most popular internet sites are local sites like Yandex.ru (search engine and internet portal).
India – Namaste!
Internet is accessible mainly to the young, wealthy, urban populations. But extremely good deals in mobile services have shrunk the rich/poor distinction in India’s telecom market. In terms of PC usage, India has the highest PC costs and lowest PC availability of all the BRIC countries. Therefore, Internet cafes are major venues for internet access.
Much of the mobile growth in India occurred in the last 24 to 36 months, motivated by stable declines in charges. Rates for voice calls are as low as $0.006 per minute, and price promotions are plentiful. In general, most mobile devices in India are low-end models compared to other BRIC countries and the purchase of second-hand mobile devices is fairly common.
About 95 percent of all Indian digital consumers use email and job hunting sites more than any other online usage compared to other BRIC countries. India has one of the highest online gaming rates of all the BRIC countries among its mobile device users.
China – Ni hao!
Broadband in China is actually cheaper than dial up contributing to the rise of hundreds of thousands of internet cafes throughout the country. Of course, with China’s massive population, the country’s 384 million internet users still only represents 28 percent of the population!
In China, internet and mobile phone use is deeply embedded in in the lives of hundreds of millions of Chinese people. In rural China, digital users use mobile SMS (short message service), social networking, online entertainment, and basic ecommerce. While in urban areas of China, consumers have highly sophisticated online usage, many of which are online around the clock due to mobile chat functions on their cell phones. Internet usage to the Chinese meets a wide and elaborate variety of needs.
Overall, digital usage in the BRIC markets is significant and not surprisingly growing extremely fast! Companies have a huge opportunity to expand digitally with services and products in each of these countries, but individual plans will need to be developed for each country. Companies need to understand the different stages of BRIC development and adapt to local conditions. But now, more than ever before, internet usage whether it’s through a PC or mobile device is exposing people around the world to well…the world! It’ll be even more interesting to see what other countries will follow the footsteps of today’s “developing countries” and see what the future will bring.
(The Boston Consulting Group http://www.slideshare.net/agarwalvaibhav/bcg-internet-report)