euromonitor digital consumer index extract - top 20 markets

2016 DIGITAL CONSUMER INDEX: IDENTIFYING THE NEXT DIGITAL FRONTIERS October 2016

© Euromonitor International PASSPORT 2 2016 DIGITAL CONSUMER INDEX: IDENTIFYING THE NEXT DIGITAL FRONTIERS

INTRODUCTION

Key findings

The world is more connected than ever before

The number of internet users has doubled over the last seven years to reach 3.2 billion globally in 2016. An estimated 43% of the population uses the internet as of 2016. This rapid uptake of digital services has underpinned generational shifts in how consumers live, work, shop and play.

Increased connectivity transforms the commerce experience

This connectivity has driven a fundamental shift across all corners of commerce. Today’s connected consumer browses and buys goods and services differently from the previous generation. Digital is how consumers of tomorrow expect brands will interact with them before, during and after a purchase.

Unprecedented digital shifts creates need for market prioritisation

It is no longer a question as to whether a digital strategy is needed. In order to assist companies with identifying which geographic markets are the most digitally attractive and offer the best prospects for future deployment of digital initiatives, Euromonitor International developed the Digital Consumer Index.

Degree and type of digital connectivity varies greatly between market types

In general, developed nations lead in internet access, with many establishing this connectivity years ago through a fixed broadband connection in the home. Digital connectivity in emerging markets has been far more often driven by mobile, due in large part to cheaper network investment and falling prices of mobile devices.

Digital commerce opportunities remain driven by more established developed market economies

The Digital Consumer Index examines the interplay of digital connectivity and digital commerce to identify promising markets for digital commerce opportunities. Of the top 20 markets on the Digital Consumer Index, all but two are developed markets. China and the UAE outperform other emerging markets on both components that feed into the overall Digital Consumer Index score.

http://www.euromonitor.com/


Consumers are more connected than ever before, and this rapid increase in digital connections has ushered in speed and convenience across all aspects of life. Whether or not a company needs a digital strategy is no longer up for debate. The question is how and where to deploy limited resources for these digital initiatives. Leveraging more than 2,500 data points, Euromonitor International created the Digital Consumer Index to assist clients with this market prioritisation for all digital initiatives, including digital commerce.

Introducing the 2016 Digital Consumer Index


Consumers are more connected today than ever before INTRODUCING THE 2016 DIGITAL CONSUMER INDEX

49% Population using internet as of 2020

Consumers are more connected today than ever before, and will be even more connected in the future. The number of internet users has doubled over the last seven years to reach 3.2 billion globally in 2016. To put that figure into perspective, an estimated 43% of the population uses the internet. By 2020, almost half of the population is expected to use the internet. There is a stark digital divide between developed and emerging market consumers. As of 2016, 79% of developed market consumers used the internet, compared with 36% of emerging market consumers. That gap will narrow by 2020, as the number of internet users in emerging markets is projected to expand four times faster than in developed markets.

43% Population using internet as of 2016




Increasingly, consumers are connecting to the internet via devices which may include anything from a computer to a smartphone to a smartwatch to a refrigerator to an automobile. These digital connections, which have ushered in speed and convenience, are underpinning generational shifts in how consumers live, work, shop and play. As billions of people become connected by these devices, it means a number of possibilities, including unprecedented processing power, storage capacity, access to knowledge and other things that one can not imagine today. Broadly speaking, society is on the brink of another technological revolution, which has been dubbed the Fourth Industrial Revolution. The first Industrial Revolution leveraged water and steam to mechanise manufacturing facilities. The second used electrically-powered machines and division of labour to introduce the world to mass production. The third used electronics and information technology to automate production. The fourth is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres. Additional breakthroughs in areas such as artificial intelligence, robotics, the “internet of things”, 3D printing and autonomous vehicles will further accelerate this technological revolution. Consumers have benefited from this digital connectivity revolution thanks to the increased access to the digital world and the simplicities it brings. Today’s connected consumers can now summon a taxi, book a flight, browse products, order food, listen to music, play a game, watch a film or chat with others anytime and anywhere, all from the small handheld computing device known as the smartphone.

Digital connections underpin generational shifts across society INTRODUCING THE 2016 DIGITAL CONSUMER INDEX

Automation 1970s

Mass Production 1990s

Mechanisation 1700s

Connectivity Present




Growing connectivity has driven a fundamental shift across all corners of commerce. Today’s connected consumer browses and buys goods and services differently from previous generations. Brands are using digital devices to connect and give today’s consumers the ability to browse their commerce offering anytime and anywhere they would like. Brands have also introduced new and engaging ways of conducting commerce that have changed consumer behaviour and disrupted long-standing business models. Two examples of this disruption are the sharing economy, which was made famous by the likes of Uber and Airbnb, and subscription-based services for both digital and physical goods and services, such as those provided by Birchbox, the Dollar Shave Club and Netflix. In this digital-first world, consumers can execute payments using any number of things, including mobile phones, watches, rings, refrigerators and cars. Digital has allowed commerce to spring up in a number of places, both online and offline. As the number of connected things increases, the number of digital commerce touchpoints will rise. Digital is already impacting various industries, and this digital disruption is far from over. Euromonitor International projects that by 2020, 58% of all travel bookings will unfold in the digital channel, due to the wide popularity of making all types of travel bookings online. In comparison, those figures will stand at 11% for retailing, specifically goods sold, and 7% for consumer foodservice, meaning a vast addressable market.

0 50 100 150

Fast Food

ConsumerAppliances

Other TravelIntermediaries

Direct LodgingBookings

Food and Drink

Full-ServiceRestaurants

ConsumerElectronics

Media Products

Direct AirlineBookings

Apparel andFootwear

Online TravelAgencies

Absolute value sales growth (US$ billion) 2015-2020

Online Value Sales Growth by Category

2015-2020

Increased connectivity is transforming the commerce experience INTRODUCING THE 2016 DIGITAL CONSUMER INDEX



Digital connectivity expected to impact the travel industry most INTRODUCING THE 2016 DIGITAL CONSUMER INDEX

11% Share of total retailing sales expected to occur digitally in 2020. US$760 billion in absolute value is predicted to be added over 2015-2020.

58% Share of total travel-related purchases expected to occur digitally in 2020. US$360 billion in absolute value is predicted to be added over 2015-2020

7% Share of total consumer foodservice sales expected to occur digitally in 2020. US$113 billion in absolute value predicted to be added over 2015-2020.


Given that technological advances are driving unprecedented changes across all aspects of society, the decision as to whether or not a company needs a digital strategy is no longer up for debate. The question is now how and where to deploy limited resources either as its relates more broadly to digital connectivity initiatives or specifically digital commerce strategies. What is the best way to make sense of the multitude of factors impacting digital connectivity to prioritise markets in a way that is simple, intuitive and makes the most of the wide range of available information? How can digital strategists weigh the health of the macroeconomic context, micro indicators of digital maturity and potential digital commerce uptake? In order to assist companies with identifying which geographic markets are the most digitally attractive and offer the best prospects for future deployment of digital initiatives, Euromonitor International developed the Digital Consumer Index. This tool pinpoints a country’s relative digital standing in the present, as well as offers forecasts for where it is expected to be five years from now. Leveraging more than 2,500 data points from Passport, Euromonitor International’s syndicated research platform, the Digital Consumer Index will assist clients with market prioritisation exercises for all digital initiatives, including digital commerce. In total, the Digital Consumer Index utilises 18 different metrics, all weighted according to Euromonitor International’s industry expertise, to provide an overall market attractiveness score for each component of the index.

Digital shift creates need for market prioritisation INTRODUCING THE 2016 DIGITAL CONSUMER INDEX




The 2016 Digital Consumer Index consists of two central components: the Digital Connectivity Index and Connected Commerce Index. Each component, which is broken down into further subcomponents, is given equal weight in the overall Digital Consumer Index. Each index contains a current and forecasted score. The Digital Consumer Index score (out of 100 points) reflects the current or forecasted readiness in a particular country. Coverage spans 50 countries across all regions. A full explanation of the methodology and full rankings can be found in the appendix at the end of this document.

Introducing Euromonitor International’s Digital Consumer Index INTRODUCING THE 2016 DIGITAL CONSUMER INDEX

Digital Connectivity Index

Connected Commerce Index

Measures economic and demographics

factors

Measures the market’s overall

internet connectivity

Measures the infrastructure’s

digital commerce readiness

Measures consumer spend

across digital channels

Measures the market’s mobile

connectivity specifically

Mobile Connectivity

Index

Home Connectivity

Index

Commerce Infrastructure

Index

Market Environment

Index

Digital Commerce

Index

Digital Consumer Index




2016 Digital Consumer Index INTRODUCING THE 2016 DIGITAL CONSUMER INDEX

Based on the rank of the Digital Consumer Index Current Score

1 UK

2 South Korea

3 US

4 Denmark

5 Norway

6 Switzerland

7 Australia

8 Sweden

9 Netherlands

10 Singapore

11 Japan

12 Hong Kong, China

13 China

14 Belgium

15 France

16 Canada

17 UAE

18 Germany

19 Israel

20 Taiwan



FOR FURTHER INSIGHT, PLEASE CONTACT Michelle Evans Digital Consumer Manager Euromonitor International [email protected]

RELATED ANALYSIS Introducing the 2016 Digital Consumer Index (Opinion, October 2016)

Five Key Insights from Euromonitor International’s 2016 Digital Consumer Index (Opinion, October 2016)

How to Meet the Connected Consumer’s Need for a Seamless Mobile Commerce Experience (Strategy Briefing, August 2016)

The New Connected Consumer Code: Unlocking Digital Commerce Opportunities (Strategy Briefing, July 2016)

Top Three Trends for the Digital Consumer in 2016 (Opinion, December 2015)

https://twitter.com/mevans14\ https://www.linkedin.com/in/michelleevansmaclachlan

mailto:[email protected]

http://www.linkedin.com/groups?about=&gid=744327

https://twitter.com/mevans14/



https://www.linkedin.com/in/michelleevansmaclachlan

euromonitor digital consumer index extract - top 20 markets

Marketing