Skip to main content
Industry Trends

Mobile Is The Best Route To Some Markets

By August 25, 2010July 30th, 20234 Comments

A recent report on the Nielsen Blog indicates that the growth of the information and communications sectors is showing a changing trend across the world. This is especially true in countries with a growing middle-class population such as India, China, Russia, Bangladesh, Turkey and Egypt.

The International Monetary Fund has predicted that the Gross Domestic Product (GDP) in these markets will grow much faster over the next 5 years than in the developed countries.

Keeping this fact in mind, marketers in industries such as media, financial services, telecommunications and consumer products will need to remodel their marketing strategy if they wish to target these developing markets.

Taking into consideration the difference in demand for Internet and mobile connections in these developing countries gives invaluable insight in the market’s requirements.

In developed countries, a per capita income of about $20,000 is required for Internet penetration to reach 50%, and the demand rises further with the income.

Mobile penetration, on the other hand, requires a much lower per capita income – just about $5,000 – to reach 50%. Several consumers also have more than 1 mobile phone, enabling penetration can exceed 100%! In fact, mobile penetration in countries such as Russia and Saudi Arabia is higher than that in the U.S. and Canada due to the fact that  mobile handsets are more affordable than personal computers.

It is estimated that in the next 5-7 years, mobile penetration will be 140 phones for 100 people even in countries with low GDP.

Mobile communication in emerging economies may generate even higher growth in business, than other mediums. While TV and the Internet can be used to reach larger and targeted audiences in developed countries, it may be wiser and easier for marketers to use mobile to reach larger audiences in developing countries, especially since Internet penetration in these countries will still take a while to grow to the same levels as those in the U.K. and Europe.

A reverse innovation model has been created, mobile advertising is being nurtured in developing coutries and then transferred to the developed markets. Investment in mobile advertising and technology would also yield better results to businesses in these developing countries.