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Money spent online: who, where, and how much?

6 November 2017 

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Money spent online: who, where, and how much?

Report summary

The future of business is online. Online subscription services stream music directly to end-users without ever having to ship an album. The growth of online activity even affects companies that sell physical goods in brick-and-mortar stores by making it easier for them to reach new markets and market their goods directly to their potential customers before new products and services are even released. With an estimated USD 730 billion being spent online each year (a number that is perpetually growing), more and more companies are seeing a significant chunk of their revenue coming from international markets.

In this report, we look at the online consumption index broken down by market (country) and by language. The online consumption index ranks countries and languages by percentage of online spending. It tells us how much is being spent online and by whom. This study can be used for a number of purposes, such as:

  • Measure market penetration:

Companies that provide online services need to know potential size (both in potential customer base as well as total revenue) of international markets. This can be used as a baseline for defining international expansion goals and measuring market penetration.

  • Build a strong internal case for localization:

It is often not easy to make a decision to localize. While localization industry veterans are usually aware that localization is a crucial step in international expansion, sometimes they are met with resistance from budget owners in senior management who don’t fully understand the potential return on investment. Understanding the data available for each market (country) and each language, allows localization managers to build a strong case for prioritizing localization budget in order to maximize international revenues.

  • Provide context for setting up international distribution:

While it is important to understand the data available for each market and each language, there are usually other factors involved in deciding which markets to enter. For example, US companies that rely upon on-the-ground distribution networks may prioritize Spanish and French for the North American market before they decide to make the jump overseas. When expanding abroad, the country information can be used to help make decisions on where to locate their international distribution networks for maximum reach to potential international customers.

The online consumption index is calculated based on available data around output (GDP, household consumption expenditure), online infrastructure (prevalence of secure servers), online adoption (internet subscribers), and demographics of each market. We look at the online consumption index over the last six years. Because we need to make decisions today on where to invest for tomorrow, we also look at the forecasted data over the next three years to see how buying behavior will shift in the future in different markets.

If you are viewing this report online at www.nimdzi.com, all of the graphs and maps are fully dynamic so you can drill down to see specific data by hovering the mouse over individual data points in the graphs. If the full dataset is what you are interested in, then all relevant data is provided in table format as well, broken down by 217 countries and over 400 languages.

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