INTERNET RETAILING IN EMERGING MARKETS: LONG-TERM GROWTH OPPORTUNITIES IN BRIC COUNTRIES

May 2012

© Euromonitor International PASSPORT 2 RETAILING: INTERNET RETAILING IN EMERGING MARKETS

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Alcoholic Drinks

Consumer Appliances

Consumer Electronics

Hot Drinks

Soft Drinks

Apparel

Beauty and Personal Care

Consumer Health

Packaged Food

Pet Care

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Internet retailing share of distribution (%)

World: Internet Retailing Penetration by Industry 2010

Industry Average Highest Penetration Category Lowest Penetration Category

Significance of internet retailing

varies from industry to industry

Whilst internet retailing has

become a major force in retail, its

impact is more pronounced within

non-grocery industries.

Internet retailing is most advanced

within consumer electronics, due to

the fact that most products in this

industry are high value. This means

that consumers are more likely to

shop around before purchase.

Conversely, soft drinks have not

been affected much by the internet

retailing channel due to the impulse

nature of the product, as well as the

importance of convenience.

Within industries, there are also

variations. In consumer health, for

instance, sports nutrition sells very

well over the internet, whilst most

consumers cannot wait for delivery

of emergency contraception.

Which industries and categories sell well on the internet?

Please note: Value-based industries and Volume-based industries denote in what terms the relevant

industries are researched in. E.g.. Alcoholic drinks is researched in volume terms, therefore the

industry average for internet retailing is for the channel to account for less than 2% of volume sales.

WHY INTERNET RETAILING? WHY BRICS?

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Other clones

Fa

cebook c

lones

Twitter clones

The importance of social media

In developed markets, social

media has played a major role

in changing the way brands

communicate with consumers.

This is also true of the BRIC

markets, although the lower

number of internet users does

diminish the impact somewhat.

A different kind of Facebook

Many consumers in the BRIC

markets, however, prefer local

versions of popular social media

sites. In China, for instance,

many websites are blocked by a

government-imposed firewall.

This has led to many social

media sites, such as Facebook

and Twitter, being inaccessible.

This has resulted in the rise of

Chinese clone sites, which are

immensely popular in China.

Welcome to a world of social media without Facebook and Twitter

Sina

Weibo

Tencent

Weibo

Sohu

Weibo Kaixinwang

Douban (product

review site)

Meilishuo

(Pinterest clone)

Tencent

Qzone

QQ (MSN

messenger clone)

CHALLENGES IN THE BRIC MARKETS AND HOW TO OVERCOME THEM

© Euromonitor International PASSPORT 4 RETAILING: INTERNET RETAILING IN EMERGING MARKETS

80 Markets: Internet Retailing Channels by Language

English

Japanese

German

French

Chinese

Korean

Portuguese

Russian

Spanish

Others

English: The primary language of the

internet

In 2011, 47% of internet retail sales

were generated by markets using

the English language. This is due to

decline to 43% by 2016 as the value

of the Chinese market increases.

Spanish language has mass appeal

Whilst English is used in 14 of the

top 80 markets, Spanish is fast

becoming an important language. Its

dominance in the Latin American

region means that there are 13

markets which use it.

Sales from these Spanish speaking

markets only accounted for 2% of

internet retail sales. However, this is

expected to rise as Mexico and

Argentina undergo rapid growth.

Creating a single platform across all

of Latin America has been a popular

strategy used by the likes of Apple.

Is a language-based approach to expansion the best option?

BEYOND THE BRICS: THE NEXT MARKETS