Report
The Connected World
The Internet Economy
in the G-20
The $4.2 Trillion Growth Opportunity
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The Connected World
The Internet Economy
in the G-20
The $4.2 Trillion Growth Opportunity
David Dean
Sebastian DiGrande
Dominic Field
Andreas Lundmark
James O’Day
John Pineda
Paul Zwillenberg
March 2012 | The Boston Consulting Group
Contents
3
INTRODUCTION
6
THE INTERNET’S ECONOMIC IMPACT
1 0
THE INTERNET’S FURTHER ECONOMIC IMPACT
12
CONSUMERS (EVERYWHERE) KNOW A GOOD DEAL
WHEN THEY SEE IT
14 FROM HIGH-WEB TO NO-WEB: OPPORTUNITIES FOR SMALL AND MEDIUM ENTERPRISES
17
DON’T BLINK: THE FUTURE IS RUSHING STRAIGHT AT US
18 COUNTRY PROFILES
5 3 NOTE TO THE READER
2 | The Internet Economy in the G-20
INTRODUCTION
T
he January 2012 report in our Connected World series examined how
companies and countries can win in the digital economy. This follow-up
report provides a more comprehensive analysis of how the scale and speed
of Internet-driven economic growth is changing countries, cultures, and
companies around the world. It includes national snapshots capturing the
economic impact of the Internet as well as in-depth looks into consumer
and business usage in the G-20 countries.1 A forthcoming report will
discuss how companies and countries can best build up their digital
balance sheets and create digital advantage.
Since the day the first domain was registered in 1985, the Internet has
not stopped growing. It has sailed through multiple recessions and
one near-collapse and kept on increasing in use, size, reach, and impact. It has ingrained itself in daily life to the extent that most of us
no longer think of it as anything new or special. The Internet has become, quite simply, indispensible.
By 2016, there will be 3 billion Internet users globally—almost half
the world’s population. The Internet economy will reach $4.2 trillion
in the G-20 economies. If it were a national economy, the Internet
economy would rank in the world’s top five, behind only the U.S.,
China, Japan, and India, and ahead of Germany. Across the G-20, it already amounted to 4.1 percent of GDP, or $2.3 trillion, in 2010—surpassing the economies of Italy and Brazil. The Internet is contributing
up to 8 percent of GDP in some economies, powering growth, and creating jobs.
The scale and pace of change is still accelerating, and the nature of
the Internet—who uses it, how, and for what—is changing rapidly too.
Developing G-20 countries already have 800 million Internet users,
more than all the developed G-20 countries combined. Social networks reach about 80 percent of users in developed and developing
economies alike. Mobile devices—smartphones and tablets—will account for four out of five broadband connections by 2016.
The speed of these developments is often overlooked. Technology has
long been characterized by exponential growth—in processing speed,
bandwidth, and data storage, among other things—going back to Gordon Moore’s observation nearly five decades ago. The Intel 80386 microprocessor, introduced in the same year as that first domain name,
held 275,000 transistors. Today, Intel’s Core i7 Sandy Bridge-E processor holds 2.27 billion transistors, or nearly 213 times as many. As the
growth motors along, it is easy to lose track of just how large the exponential numbers get.
The Boston Consulting Group | 3
The power of exponential growth is illustrated by an ancient fable, repopularized by Ray Kurzweil in his book, The Age of Spiritual Machines.
It tells of a rich ruler who agrees to reward an enterprising subject
starting with one grain of rice on the first square of a chessboard,
then doubling the number of grains on each of the succeeding 63
squares. The ruler thinks he’s getting off easy, and by the thirty-second square, he owes a mound weighing 100,000 kilograms, a large but
manageable amount. It’s in the second half of the chessboard that the
real fun starts. Quickly, 100,000 becomes 400,000, then 1.6 million,
and keeps growing. By the sixty-fourth square, the ruler owes his subject 461 billion metric tons, more than 4 billion times as much as on
the first half of the chessboard, and about 1,000 times global rice production in 2010.
The Internet has moved into the second half of the chessboard. (See
Exhibit 1.) It has reached a scale and level of impact that no business,
industry, or government can ignore. And like any technological phenomenon with its scale and speed, it presents myriad opportunities,
which consumers have been quick and enthusiastic to grasp. Businesses, particularly small and medium enterprises (SMEs)—the growth engine of most economies—have been uneven in their uptake, but they
are moving online in increasing numbers and with an increasingly intense commitment.
There are threats too, some misunderstood, and policymakers and
regulators alike are challenged to make the right choices in a fastmoving environment. As is often the case with fast-paced change and
Exhibit 1 | Evolution of the Internet
From developed to developing markets
Internet users in the
G-20 countries (millions)
From fixed to mobile
Consumer broadband
connections (millions)
From basic content to a
data explosion
Global Internet traffic
(exabytes per year)
238
2005
746
total
508
30
167
Fixed connections
Mobile connections
Developed markets
Developing markets
573
672
2015
2,062
total
1,390
2,707
total
966
2,134
Sources: Economist Intelligence Unit; Cisco; Ovum; BCG analysis.
Notes: While the European Union is a member of the G-20, the figures include only the independent European members: France, Germany, Italy, and the
U.K. The developing nations are Argentina, China, India, Indonesia, Mexico, Russia, Brazil, Saudi Arabia, South Africa, and Turkey. The developed nations are
Australia, Canada, France, Germany, Italy, Japan, South Korea, U.K., and U.S.
4 | The Internet Economy in the G-20
complex issues, many governments are still trying to determine what
their role should be.
Meanwhile the rice pile on the next square keeps getting bigger.
This report assesses the far-reaching economic impact of the Internet.
It shows how the benefits are large and getting larger, identifies the
drivers behind them, and examines their clout. It quantifies gains—
economic growth, consumer value, and jobs—in the context of the
economies of the G-20. It demonstrates that no one—individual, business, or government—can afford to ignore the ability of the Internet
to deliver more value and wealth to more consumers and citizens
more broadly than any economic development since the Industrial
Revolution.
Note
1. The Group of 20 major economies comprises Argentina, Australia, Brazil, Canada,
China, the EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi
Arabia, South Africa, South Korea, Turkey, the U.K., and the U.S.
The Boston Consulting Group | 5
The Internet’s Economic
Impact
T
he economic impact of the Internet is
getting bigger—just about everywhere—
and it already has an enormous base. In the
U.K., for example, the Internet’s contribution
to 2010 GDP is more than that of construction and education. In the U.S., it exceeds the
federal government’s percentage of GDP. The
Internet economy would rank among the top
six industry sectors in China and South Korea.
Policymakers in developed countries cite with
envy the GDP growth rates of 5 to 10 percent
per year being achieved in China and India,
particularly in today’s troubled economic environment. At the same time, they can often
look past similar, or even higher, rates close
to home.
The Internet economy in the developed markets of the G-20 will grow at an annual rate
of 8 percent over the next five years, far outpacing just about every traditional economic
sector, producing both wealth and jobs. The
contribution to GDP will rise to 5.7 percent
in the EU and 5.3 percent for the G-20.
Growth rates will be more than twice as
fast—an average annual rate of 18 percent—
in developing markets, some of which are
banking on a digital future with big investments in broadband infrastructure. Overall,
the Internet economy of the G-20 will nearly
double between 2010 and 2016, when it will
employ 32 million more people than it does
today.
6 | The Internet Economy in the G-20
The growth is being fueled in large part by
two factors: more users and faster, more ubiquitous access. The number of users around
the globe will rise to a projected 3 billion in
2016 from 1.9 billion in 2010. Broadening access, particularly via smartphones and other
mobile devices, and the popularity of social
media are further compounding the Internet’s impact. In the developing world in particular, many consumers are going “straight
to social.” (See Exhibit 2.)
The Internet economy of the
G-20 will nearly double
between 2010 and 2016.
National levels of Internet economic activity
generally track the BCG e-Intensity Index,
which measures each country’s level of enablement (the amount of Internet infrastructure that it has in place), expenditure (the
amount of money spent on online retail and
online advertising), and engagement (the degree to which businesses, governments, and
consumers are involved with the Internet).
Big differences are apparent among the 50
countries examined, with five clusters emerging according to their performance on the index in absolute terms and relative to per capita GDP. (See Exhibit 3.)
Exhibit 2 | Developing Markets Are Going “Straight to Social”
Users Are Adopting Social Networking Quickly as They Come Online
Size of Internet
population = 50 million
Social networking penetration among Internet users (%)
100
Social networking is strong
among the connected elite
90
South Africa
Argentina
Turkey
Mexico
Indonesia
India
Australia
Brazil
Russia
Canada
Italy
80
U.K.
France
Germany
70
U.S.
Chinese social network
growth is exploding
South Korea
60
China
50
0
Japan is experiencing
dramatic social growth
Straight
Social–
Focus on
to social mainstream traditional
and mature
Web
20
40
Japan
60
Heavy users of
more traditional
conversational
media
80
100
Internet penetration (%)
Sources: Economist Intelligence Unit; comScore; Google; Trendstream; eMarketer; local telco reports; BCG analysis.
Note: Data reflect 2011 figures; where unavailable, 2010 figures were used; Saudi Arabia not included.
Exhibit 3 | Developed Markets Score Significantly Higher in BCG’s e-Intensity Index
BCG e-Intensity score
200
South Korea
Denmark
Netherlands
Iceland
Japan Finland
U.S.
Germany
U.K.
150
Hong Kong
New Zealand
100
France
Czech Republic Slovenia
Spain
Estonia
Portugal
Poland
Israel
Italy
Hungary
Russia
Turkey Brazil
Greece
Slovakia
Malaysia
Argentina
50
Saudi Arabia
Chile
Colombia
China
Venezuela
Morocco
Mexico
Egypt South Africa
0
Singapore
Canada
Belgium
Austria Ireland
Norway
Australia
Luxembourg
Switzerland
United Arab Emirates
Nascent
natives
India Indonesia
20
Sweden
40
60
Natives
Players
Laggards
Aspirants
80
2010 GDP per capita ($thousands)
Sources: Economist Intelligence Unit; International Monetary Fund, ITU; Speedtest.net; Gartner; Ovum; World Bank; Pyramid Research; United Nations;
World Economic Forum; comScore; Magnaglobal; Euromonitor; BCG analysis.
Note: The scores of several countries are estimates based on incomplete data.
The Boston Consulting Group | 7
Consumption is the principal driver of Internet GDP in most countries, typically representing more than 50 percent of the total in
2010. It will remain the largest single driver
through 2016. Investment, mainly in infrastructure, accounts for a higher portion of the
total in “aspirant” nations as they are in the
earlier stages of development.
Several “natives” on BCG’s e-Intensity Index—the U.K., South Korea, and Japan—are
among those nations with the largest Internet
contributions to GDP. China and India stand
out for their enormous Internet-related exports—China in goods, India in services—
which propel their Internet-economy rankings toward the top of the chart. Mexico and
South Korea have also developed significant
Internet export sectors.
Among G-20 “players,” the United States benefits from a vibrant Internet economy, while
Germany and France tend to lag. The picture
will change by 2016 as, for example, the Internet economies of India and the EU-27
grow rapidly to move into the top five. (See
Exhibits 4 and 5.)
Retail represents almost one-third of total
GDP in the G-20, and online retail contributes
a significant and increasing share in many
countries. (See Exhibit 6.) Nowhere is the impact more apparent than in the U.K. Thanks
in part to high Internet penetration, efficient
delivery infrastructure, a competitive retail
market, and high credit-card usage, the U.K.
has become a nation of digital shopkeepers,
to paraphrase Adam Smith.
Several European economies—Denmark, the
Netherlands, Sweden, and the U.K.—to name
but four—perform strongly on BCG’s e-Intensity Index. But various barriers hold back the
EU as a whole, the world’s biggest single market, when it comes to cross-border e-commerce. In January, the European Commission
announced plans to catch up, removing these
impediments and creating a “digital single
market.” The commission believes that ecommerce can double its share of overall retail sales by 2015.
Exhibit 4 | The Internet Currently Accounts for 4.1% of GDP in the G-20 Countries
Internet economy as a percentage of 2010 GDP
GDP
GDP
($trillions)
U.K.
South Korea
China
Japan
U.S.
G-20
India
EU-27
Australia
Germany
Canada
France
Mexico
Brazil
Saudi Arabia
Italy
Argentina
South Africa
Russia
Turkey
Indonesia
(%)
2.3
1.0
5.9
5.5
14.5
54.9
1.7
16.2
1.2
3.3
1.6
2.6
1.0
2.1
0.4
2.1
0.4
0.4
1.5
0.7
0.7
8.3
7.3
5.5
4.7
4.7
4.3
4.1
Developed market average
4.1
3.8
3.6
3.3
3.0
3.0
2.9
Developing market average
2.5
2.2
2.2
2.1
2.0
1.9
1.9
1.7
1.3
Natives
Players
Laggards
Aspirants
Sources: Economist Intelligence Unit; Organisation for Economic Co-operation and Development (OECD); country statistical agencies; BCG analysis.
8 | The Internet Economy in the G-20
Exhibit 5 | The Internet Economy Will Account for 5.3% of GDP in the G-20 Countries in 2016
Internet economy as a percentage of 2016 GDP
GDP
U.K.
South Korea
China
EU-27
India
Japan
U.S.
G-20
Mexico
Germany
Saudi Arabia
Australia
Canada
Italy
France
Argentina
Russia
South Africa
Brazil
Turkey
Indonesia
CAGR
2010–16
(%)
GDP
($trillions)
(%)
12.4
2.8
1.4
12.4
20.0
4.3
6.6
18.6
79.9
1.5
3.9
0.8
1.7
2.1
2.4
3.1
0.8
2.7
0.6
3.7
1.3
1.5
10.9
7.4
17.4
10.6
23.0
6.3
6.5
10.8
15.6
7.8
19.5
7.1
7.4
11.5
6.1
24.3
18.3
12.6
11.8
16.5
16.6
8.0
6.9
5.7
5.6
5.6
5.4
5.5
5.3
4.9
4.2
4.0
3.8
3.7
3.6
3.5
3.4
3.3
2.8
2.5
2.4
2.3
Natives
1.5
Developed market average
Developing market average
Players
Laggards
Aspirants
Source: Economist Intelligence Unit; Organisation for Economic Co-operation and Development (OECD); country stastical agencies; BCG analysis.
Exhibit 6 | Online Retail Is Expected to Account for Up to 23% of Total U.K. Retail in 2016
Online retail as a percentage of total retail, 2016
Online
retail
(%)
U.K.
Germany
Australia
South Korea
Saudi Arabia
Italy
U.S.
Japan
France
G-20 1
Canada
India
Brazil
China 2
Russia
Argentina
Mexico
South Africa
Turkey
Indonesia
23.0
11.7
8.9
8.1
8.5
Developed market average
8.0
8.0
7.1
6.8
6.7
6.0
5.3
4.5
4.3
3.4
3.2
2.9
3.2
Developing market average
1.6
1.5
1.1
0.3
Natives
Players
Laggards
Aspirants
Sources: Economist Intelligence Unit; Organisation for Economic Co-operation and Development (OECD); country stastical agencies; BCG analysis.
1
This figure does not include the EU-27.
2
This figure reflects business-to-consumer retail only.
The Boston Consulting Group | 9
The Internet’s Further
Economic Impact
A
s significant as the GDP figures are,
they capture only part of the story. In
retail alone, G-20 consumers researched
online and then purchased offline (ROPO)
more than $1.3 trillion in goods in 2010—the
equivalent of about 7.8 percent of consumer
spending, or more than $900 per connected
consumer.
ROPO is a bigger factor in developed economies, as one would expect, but consumers everywhere research a wide variety of products
online before purchasing them elsewhere. In
China, groceries are a popular ROPO purchase; in the United States, cars; India, technology products; Brazil, electronics, appliances, and travel packages. Multiple factors affect
e-commerce and ROPO. In addition to regulatory barriers like those cited above, the state
of infrastructure for online and bricks-andmortar retail plays a big role, as do Internet
penetration, credit-card use, and consumer
confidence in online payment systems, delivery, and fulfillment.
ROPO spending is higher than online retail in
virtually all the nations we studied. (See Exhibit 7.) In the U.S., online retail sales totaled
$252 billion in 2010, and ROPO added another $482 billion. ROPO dwarfs online retail in
Turkey—$37 billion compared with $2 billion—owing in large part to poor delivery infrastructure and consumer concern over fulfillment. In Mexico, although low credit-card
10 | The Internet Economy in the G-20
penetration and security concerns over online payments hold back online commerce,
Mexican consumers without credit cards can
pay for their online purchases at 7-Eleven
stores. Like the U.S., Japan has a busy online
retail market, which totaled $89 billion in
2010. ROPO added $139 billion because
Japanese consumers still prefer the experience of shopping in stores. Across the G-20,
ROPO would add an additional 2.7 percent if
it were counted as part of Internet GDP.
Consumers everywhere
research a wide variety of
products online before purchasing them elsewhere.
Mobile shopping—using a smartphone to
identify deals, compare products and prices,
and “seal the deal” while on the go—is growing in popularity worldwide. As device prices
fall, especially in developing markets, increased smartphone penetration will have a
dramatic impact on both retail commerce
and e-commerce—further blurring the lines
between online and offline buying. Mobile
apps such as RedLaser, Google Shopper, and
Amazon Remembers make it ever easier for
consumers to research products, compare
deals, and make purchases as they see fit at
Exhibit 7 | ROPO Greatly Amplifies the Internet’s Impact on Retail
Online retail and ROPO (research online, purchase offline), 2010
Value
($)
U.S.
Japan
U.K.
Germany
China¹
France
Canada
Italy
South Korea
Australia
Russia
Turkey
Brazil
Mexico
India
Argentina
Saudi Arabia
South Africa
Indonesia
252
89
102
38
10
2
2
7
2
3
27
18
58 76
20
48 68
23
44 67
20
38 58
12
33 45
37 40
15 19 34
27 29
6 13
9 11
5 8
482 734
139 228
87 189
88 126
96 106
78 105
2 24
0 11
Online retail
($billions)
ROPO
($billions) 2
Sources: Euromonitor; Google-TNS; BCG analysis.
Note: Figures exclude real estate for some countries; the figures for online retail and ROPO do not add up to the total due to rounding.
1
This figure reflects business-to-consumer retail only.
2
Total ROPO (auto and nonauto).
any given moment. Retailers of all stripes
face an especially fast-changing and increasingly competitive environment in the years
ahead. With the rapid growth of e-commerce
and its potential to disrupt both the top and
bottom lines, retail may be ripe for a transformation similar to the one seen in media. A
multichannel offering that captures sales
wherever they occur will become a “must
have” for most businesses.
Online advertising, a $65 billion business in
the G-20 in 2010, is forecast to grow 12 percent a year to almost $125 billion in 2016. In
countries with more developed Internet economies, 15 to 30 percent of advertising spending has migrated online. Online advertising
spending in the U.K. overtook spending on
television advertising in 2011—and it now
exceeds spending on all other media categories.
Taobao in 2010 than at China’s top-five brickand-mortar retailers combined.
The Internet is having a big impact on how
enterprises do business and interact with one
another, too. Cloud-based data storage, integrated procurement systems, and “enterprise
social networks” that facilitate communication within and among organizations in real
time are helping companies address a host of
procurement, coordination, communication,
and fragmentation issues. With spending in
the $3 trillion range, both the U.S. and Japan
lead the world in business-to-business e-commerce, but penetration is picking up in other
countries. South Korea’s percentage of business-to-business e-commerce is approaching
50 percent, as is Japan’s.
Consumer-to-consumer Internet commerce is
a big factor in China, facilitated by websites
such as Taobao, a marketplace for goods of
all sorts. More products were purchased on
The Boston Consulting Group | 11
Consumers (Everywhere)
Know a Good Deal When
They See It
C
onnected consumers place a considerable value on the Internet. In the G-20
economies, this “consumer surplus”—the
perceived value that consumers themselves
believe they receive, over and above what
they pay for devices, applications, services,
and access—amounts to $1,430 a person.1
Consumer surplus varies vastly across
countries, depending in part on the impact of
the drivers shaping each nation’s Internet
economy. For example, it’s $323 per person in
Turkey, $1,215 in South Africa, $1,287 in
Brazil, and $4,453 in France. The aggregate
consumer surplus across 13 of the G-20
countries is $1.9 trillion, or about 4.4 percent
of the GDP.
It is interesting to note that in countries such
as France and Germany, which have relatively low levels of Internet GDP, consumers’ perceived value of the Internet is very high. Furthermore, although the consumer surplus
figures are lower for many developing markets, they are actually quite high relative to
local incomes—lower-income people get relatively more benefit from the Internet than
wealthier people do. Closing the digital divide can have a meaningful impact for the
less well-off.
Consumer surplus has multiple drivers,
among them the quality of online content, the
number of devices in use, the ease and frequency of access, and the number of people
12 | The Internet Economy in the G-20
online. Demographics play a role in the last
factor: in many markets, the heaviest users of
the Internet are the young—no surprise
there—and those over 55, whose ranks will
swell as the population ages. (See Exhibit 8.)
All these factors are on the rise, which points
to continued growth in the consumer surplus.
Various aspects of consumer surplus are illustrated in the country profiles at the end of
this report. These profiles also show the Internet’s impact on GDP and on the retail
market in each country. Most significantly,
they highlight how deeply the Internet has
ingrained itself in daily life around the world,
by showing what consumers are willing to
give up—from satellite navigation to sex—in
order to keep their Internet access.
Note
1. In our analysis, we took into consideration the value
derived from communication, content (entertainment,
news, and social media), search, commerce, and job
searches. We used a “loss aversion technique” to avoid
anchoring the data to the current prices of goods and
services—many of which are free—and to determine
the true value that people place on them. To measure
“consumer surplus,” we subtracted from this value what
people currently pay to access the Internet and the cost
of the devices, content, and applications. Our analysis
found that consumers receive a “surplus” equal to
about 80 percent of value, or 4 to 5 percent of personal
income.
Exhibit 8 | Youngest and Oldest Consumers Tend to Value the Internet the Most
Perceived Internet value per user
($)
(€)
USA
4,000
3,506
3,000 2,926
1,953
2,000
2,363
5,174
2,978
1,456
2,324
3,062
25–34
(€)
35–44
45–54
55+
3,226
3,000
2,722
2,578
2,478
0
18–24
0
18–24
35–44
45–54
35–44
45–54
158
178
55+
0
18–24
25–341
35–44
45–54
55+
India
55
60
2,130
2,000
55+
172
(Rp thousands)
South Korea
40
1,807
1,000
25–34
25–34
3,060
1,000
244
100
(KRW
thousands)
3,000
Germany
4,000
316
200
2,000
0
18–24
Japan
400
300
4,000 3,701
1,000
2,000
(¥thousands)
France
6,000
0
18–24
782
25–34
494
35–44
24
936
45–54
24
22
25–34
35–44
20
55+
0
18–24
22
45–54
55+
Age categories
Source: BCG survey.
Note: Value comparisons are weighted by income (excluding the highest and lowest levels by country) to minimize bias.
1
The figure for Japan’s 25–34 category is estimated (base size).
The Boston Consulting Group | 13
From High-Web to No-Web
Opportunities for Small and Medium Enterprises
G
iven their agility and ability to
innovate, one would expect SMEs—long
the engine of economic growth in many
economies—to grasp the power of the
Internet to build their businesses. Indeed,
many have, and these companies have helped
turned the Web into an important vehicle for
revenue growth and job creation. But a
surprising number have not—or have ventured online only to a limited extent. These
companies are leaving an enormous opportunity untapped.
In our view, every business needs to “go
digital”—and fast. Policymakers, too, should
pay heed. Given SMEs’ track record in job creation, policies that encourage more of these
companies to develop an online presence
could help address the lingering unemployment that currently characterizes the recovery in many countries.
Over the last 18 months, BCG has surveyed
workers at more than 15,000 companies that
operate in the world’s biggest economies and
that employ fewer than 250 people (in the
U.S., the cutoff was 500). We grouped the
companies into four categories: high-Web,
medium-Web, low-Web, and no-Web.1
The results are compelling. Across 11 of the
G-20 countries, high-Web SMEs have experienced revenue growth that was up to 22 percent higher than that achieved by SMEs with
14 | The Internet Economy in the G-20
low or no use of the Web over the last three
years. (See Exhibit 9). In the U.K., sales at
high-Web companies increased six times as
fast as revenues at firms with no Internet
presence.
Many U.S. SMEs have integrated the Internet
into their businesses. They are much more
aggressive online than low-Web companies,
particularly in activities such as search engine optimization, social networking, buying
from and paying suppliers. They are even
managing their business finances and recruiting staff online.
In many developed and developing markets,
high-Web companies are twice as likely as
their low- or no-Web counterparts to have a
national and international customer base, as
opposed to selling only locally. In the U.S.,
high- and medium-Web businesses expect to
grow by 17 percent over the next three years,
compared with 12 percent for low- and noWeb companies.
High- and medium-Web SMEs generate
more jobs. In Germany, 93 percent of highWeb and 82 percent of medium-Web companies increased employment over the past
three years, compared with only 50 percent
of the no-Web firms. Japan experienced similar results. In South Korea, employment increased at 94 percent of high-Web SMEs and
at 60 percent of no-Web companies.
We’ve identified five value levers that explain
the “Internet advantage” of High-Web SMEs:
••
••
Geographic Expansion. The Internet creates
a borderless world for many SMEs,
enabling them to compete with much
larger, multinational companies by
accessing markets that were previously
out of reach.
Enhanced Marketing. Online marketing
delivers expanded reach and measurable
returns. It also yields valuable data about
consumers and their preferences, enabling
expressly targeted advertising and offers.
••
Improved Customer Interactions. Social
media make it possible for companies to
engage in real-time dialog with customers
not only to boost sales but also to build
loyalty and even to help create, refine, and
enhance products and services.
••
Leveraging the Cloud. SMEs can access
sophisticated, often cloud-based, tools to
enhance a wide range of functions,
including customer relationship management, information management, and
customer payments. As a result, these
companies can grow quickly without
requiring large investments in infrastructure.
••
Easier and Quicker Staff Recruitment. The
recruiting options available today are
more powerful and less expensive than
ever before, and they enable SMEs to tap
a global talent market.
The most powerful lever may be improved
customer interaction, which is achieved principally by exploiting the participatory nature
of today’s Internet. Nearly two-thirds of highWeb SMEs are moving quickly to match their
customers’ engagement in social networks.
The impact can be seen in such developing
markets as Brazil and China. (See Exhibit 10.)
Despite high barriers impeding SME adoption
of online activities (e.g., lack of infrastructure
and computer penetration), these countries
Exhibit 9 | SMEs That Make Extensive Use of the Web Grow Faster
Historical three-year sales growth
(%)
30
China
20
10
15
25
Turkey
India
Brazil
8
20
9
5
19
12
17
13
0
(%)
30
22
–5
U.S.
Germany
France
South Korea
20
10
0
14
18
4
3
10
15
–5
10
7
11
6
–5
Source: Survey of approximately 4,700 SMEs; BCG analysis.
High-Web SMEs1 Low-Web and No-Web SMEs1
Note: Figures for some countries may not add up to the totals due to rounding.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
The Boston Consulting Group | 15
Exhibit 10 | More SMEs in Developing Markets Are Using the Internet to Engage with Consumers
Brazil and China have higher percentages of
High-Web SMEs...
Percentage of SMEs by Web involvement
China
35
8
30
...and generally higher percentages of SMEs
engaging consumers online
Percentage of SMEs using Internet activity to engage consumers
53
51
Website
27
72
71
Online
advertising
Brazil
27
8
36
Blogging
29
61
71
41
38
22
56
Social
networking
U.K.
23
No-Web
7
54
Low-Web
Medium-Web
16
43
39
66
57
E-commerce
High-Web
49
Brazil
China
U.K.
Sources: Survey of approximately 1,500 SMEs; IDC; Organisation for Economic Co-operation and Development (OECD); Brazilian Internet Steering
Committee; China Network Information Centre; Internet & Mobile Association of India; Zinnov; MARS Indonesia.
Note: Values were adjusted for Internet penetration rates in each country and weighted to reflect an equal distribution of company sizes.
not only boast higher percentages of highWeb SMEs than their developed-market
counterparts, but their SMEs are also substantially more adept at moving beyond Internet
marketing to exploit the Web’s facility for
driving sales through more intensive customer interaction.
The barriers keeping SMEs from engaging
more broadly or deeply online fall into five
general categories: poor access to the requisite technology, lack of capabilities, lack of resources, doubt over the potential returns, and
an unfavorable business environment. Not
surprisingly, access problems and an unfavorable business environment were cited far
more often by SMEs in developing markets
than by their developed-market counterparts.
Almost half of SMEs in India and Indonesia
cited “local business culture” as a significant
impediment; one-third of Chinese SMEs said
that they are held back by lack of access to
computers. Inadequate staff knowledge and
time were named the biggest barriers in Japan, and about one-quarter of U.S. and U.K.
firms reported a lack of necessary financial
resources.
16 | The Internet Economy in the G-20
Most of these barriers must be hurdled by the
SMEs themselves. But policymakers should
take note that access issues and government
regulations were cited as impediments by
one in five SMEs in developed markets—and
by two in five in developing economies.
These are areas where governments may
have opportunities to lend a hand and can
reap the benefits of increased economic
growth and job creation.
Note
1. High-Web companies use a wide range of Internet
tools to market, sell, and support customers, interact
with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online;
low-Web businesses have a website or a social networking site; no-Web businesses do not have a website.
Don’t Blink
The Future Is Rushing Straight at Us
T
he Internet will change even more in
the next five years than it has in its first
twenty-five. It will have more users (especially in developing markets), more mobile users,
more users using various devices throughout
the day, and many more people engaged in
an increasingly participatory medium. On the
second half of the chessboard, as the rice pile
starts to rival Mount Everest in magnitude
(the size it would reach on the sixty-fourth
square), the rapidly evolving Internet has the
potential to both enrich and overwhelm.
Businesses in particular need to make a
choice. They can rise to the challenge of a
new Internet-driven marketplace—and benefit from the expanded capabilities and higher growth rates that high-Web SMEs are already achieving throughout the G-20 nations.
The alternative is following in the footsteps
of such industries as music and publishing,
which held on to outdated business models
for too long and are now dealing with competitive environments that have been reshaped around them.
For those willing to think big, embrace
change, move quickly, and organize differently, there are countless opportunities to reap
the rewards of the Internet’s creative destruction (as defined by economist Joseph Schumpeter rather than by Karl Marx) in industries
ranging from health care to retail and consumer goods.
Companies that have not yet developed an
online strategy for themselves need to build
their digital assets while reducing digital liabilities (which are often organizational) that
might prevent them from tapping opportunities. This topic will be the subject of the next
forthcoming report in BCG’s Connected
World series.
Governments also face challenges and opportunities—and many of these are increasingly
complex. Fifteen years ago, as the commercial
Internet was beginning to make its potential
apparent in the U.S. and elsewhere, President
Bill Clinton outlined five principles constituting a “framework for global electronic commerce”:
1. The private sector should lead.
2. Governments should avoid undue restrictions on electronic commerce.
3. Where governmental involvement is
needed, its aim should be to support and
enforce a predictable, minimalist, consistent, and simple legal environment for
commerce.
4. Governments should recognize the unique
qualities of the Internet.
5. Electronic commerce on the Internet
should be facilitated on a global basis.
The Boston Consulting Group | 17
The Internet is a very different, much bigger,
and more complex place now than it was
then. New, important, and difficult issues
have moved to the fore, among them privacy,
piracy, protection, security, “net neutrality,”
and taxation. They are already causing conflict and contention as different players with
distinct interests choose sides. The recent debate over SOPA—the proposed Stop Online
Piracy Act—in the U.S. is one example of how
fractious such issues can be. In February,
street protests in several European cities
against an antipiracy agreement seen as limiting the freedom of online speech showed
that citizens are paying attention and have
strongly held points of view.
In the best of all worlds, with the Internet being a global phenomenon, governments
would act in a coordinated manner, working
toward international standards when they are
called for and toward cross-country agreements to limit intervention when it is better
to let the free market do its own work. This is
a high bar, to be sure, and we may need an
updated framework with some new principles, but those put forth by President Clinton
offer a still-valid structure for engaging the
debate.
On a national level, policies that promote investment—especially in the infrastructure in
the developing world—and emphasize education, training, and skills-building everywhere
are essential. Perhaps even more than the industrial era and information age, the Internet
economy requires a well-educated and skilled
workforce. Countries that fall behind in providing educational opportunity are also likely
to lose out to others in Internet-driven economic growth.
Policies that promote investment and emphasize education, training, and skills-building are essential.
Different countries will take different approaches, but the overarching challenge facing those empowered to do the people’s business is the same—ensure ready and
affordable access, a level playing field, and an
open competitive environment that enables
everyone to tap the economic benefits of the
Internet.
COUNTRY PROFILES
I
n this section, we feature a series of
detailed profiles illustrating Internet
economic activity across the G-20. For each
economy, we have provided information on
the impact of the Internet on commerce and
18 | The Internet Economy in the G-20
GDP, an illustration of how consumers are
using the Internet and what they value, and
an assessment of use by—and impact
on—small and medium enterprises.
Argentina’s Internet Economy
2016
5
GDP contribution
($billions)
Real estate
8
Government
spending
Agriculture, forestry, and hunting
Logistics and communication
28
Public administration
18
Investment
Financial transactions
Construction
5
Consumption
--1
Net exports
Community services
Mining
--3
Hotels and restaurants
Percentage of GDP
Argentina
Education and health services
TOTAL
2
3
8
Manufacturing
Wholesale and retail trade
2010
TOTAL
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
Utilities
Argentina
2.0
3.3
5.3
4.1
G-20
Fishing
2.0
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; INDEC; CACE; IEMR; company reports; World Bank; World Trade Organization; AméricaEconomía; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Argentina
$9
$2
billion
(1.4%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(2.9%)
$568
per
online
user
$9
2016
billion
(5.9% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
45.8
2016
32.2
6.7
10.0
7.7
4.5
3.1
$0.3
billion
Television
Newspaper
Out-of-home
Magazine
Radio
Online
40.0%
CAGR
$1.9
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; INDEC; CACE; IEMR; company reports; World Bank; World Trade Organization; AméricaEconomía; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 19
Australia’s Internet Economy
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
GDP contribution
($billions)
Government
spending
2010
2016
14
17
9
Investment
15
TOTAL
61
50
TOTAL
41
Real estate
Financial services
and insurance
Wholesale and retail trade
Manufacturing
Mining
Construction
Professional, scientific,
and technical services
Health care
Logistics
Public administration
Education and training
Information and telecommunications
Administration
Hotels and restaurants
Agriculture
Utilities
Arts, entertainment, and recreation
29
Consumption
–12
Net exports
--19
Percentage of GDP
Australia
Australia
3.7
3.3
5.3
4.1
G-20
3.3
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Australian Bureau of Statistics; Forrester Research; IEMR; Australian Communications and Media Authority; company reports; National
Broadband Network; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Australia
$38
$20
billion
(5.8%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(8.9%)
$2,302
per
online
user
$38
2016
billion
(10.9% of
total retail)
Total
retail
2016
Percentage of total advertising expenditures in 2010
31.5
30.2
7.5
4.5
7.9
$2.1
billion
Television
Newspaper
34.0
18.4
Radio
Magazine
Out-of-home
Online
16.4%
CAGR
$5.3
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Australian Bureau of Statistics; Forrester Research; IEMR; Australian Communications and Media Authority; company reports; National
Broadband Network; BCG analysis.
Note: Percentages may not total 100 due to rounding.
20 | The Internet Economy in the G-20
Brazil’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
8
GDP contribution
($billions)
2010
Public and personal
services
21
Government
spending
Manufacturing
Wholesale and retail trade,
hotels, and restaurants
Real estate and business
services
4
Investment
14
TOTAL
76
Public administration
89
Financial services and insurance
TOTAL
46
34
Consumption
--6
Net exports
Agriculture
Construction
Logistics
--16
Mining
Percentage of GDP
Brazil
Brazil
Electricity, gas, and water
2.4
2.2
2.2
5.3
4.1
G-20
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Brazilian Census Bureau (IBGE); EC; IMRG; ITU, U.K. Office for National Statistics (ONS); IE Market Research; CETIC; Teleco; CGI/ICT;
Faraban; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Brazil
$36
$15
billion
(3.1%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(4.3%)
$260
per
online
user
$19
2016
billion
(4.0% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
60.3
2016
10.1
2.9
7.5
3.5
$1.7
billion
Television
Newspaper
Magazine
Radio
Out-of-home
17.4
15.6
Online
14.2%
CAGR
$3.7
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Brazilian Census Bureau (IBGE); EC; IMRG; ITU, U.K. Office for National Statistics (ONS); IE Market Research; CETIC; Teleco; CGI/ICT;
Faraban; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 21
Brazil’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$1,287
$1,472
$154
E-mail
$152
General search
Consumer
surplus
Perceived
value
$131
$185
Online banking
and investing
Cost
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
78
Satellite
navigation
76
72
Alcohol
60
Fast food
59
Coffee
43
Chocolate
24
Exercise
12
Car
8
Sex
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Brazilian Census Bureau (IBGE); EC; IMRG; ITU, U.K. Office for National Statistics (ONS); IE Market Research; CETIC; Teleco; CGI/ICT;
Faraban; BCG analysis.
Note: Due to rounding, perceived value does not total consumer surplus plus cost.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in Brazil
98
High-Web
53
20
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage) 1
SMEs’ percentage of
private-sector
employment
Medium-Web
dium-Web
Low-Web and
No-Web
95
20
77
6
12
SMEs’ percentage of GDP
Medium- Low-Web and
No-Web
Web
HighWeb
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
100
3
Website
86
Online
advertising
74
26
Search
engine
optimization
73
100
24
Blogging
100
3
Social
networking
60
38
1
E-commerce Recruitment
50
70
0
Finance
3
54
3
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Brazilian Census Bureau (IBGE); EC; IMRG; ITU, U.K. Office for National Statistics (ONS); IE Market Research; CETIC; Teleco; CGI/ICT;
Faraban; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; mediumWeb businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a
website.
22 | The Internet Economy in the G-20
Canada’s Internet Economy
GDP contribution
($billions)
2016
Government
spending
2010
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
Financial services,
insurance, and real estate
Manufacturing
13
Wholesale and retail trade
Health care and social services
Public administration
29
11
22
Construction
27
Consumption
--12
Net exports
Professional, scientific, and technical services
73
51
TOTAL
48
Education services
TOTAL
Investment
Logistics
Mining, oil, and gas extraction
Information and cultural industries
Administrative and support
Utilities
--20
Hotels and restaurants
Percentage of GDP
Canada
3.6
3.0
Agriculture, forestry, and fishing
Canada
Arts, entertainment, and recreation
5.3
4.1
G-20
3.0
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; eMarketer; Statistics Canada; Retail Council of Canada; Industry Canada; AXCO; IEMR; H2; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Canada
$33
billion
(3.4%)
Online
retail
$2,082
per
online
user
$58
2016
2010
Research online,
purchase offline
2010
billion
(5.3%)
$18
billion
(11.3% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
32.6
2016
21.8
14.7
5.5
5.3
$2.1
billion
Television
Newspaper
28.8
20.0
Radio
Magazine
Out-of-home
Online
10.6%
CAGR
$3.8
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; eMarketer; Statistics Canada; Retail Council of Canada; Industry Canada; AXCO; IEMR; H2; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 23
China’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
27
92
GDP contribution
($billions)
Government
spending
2010
Manufacturing
Agriculture, forestry, and fishing
Wholesale and retail
Mining
Construction
Logistics
321
852
55
62
Investment
Consumption
197
Net exports
TOTAL
326
Financial intermediation
Real estate
Public and social organizations
Education
Electricity, gas, and water
Information and communications technology (ICT)
Hotels and restaurants
TOTAL
12
412
Leasing and business services
Health care, social security, and social services
Services to households
Scientific research and technical services
Arts, entertainment, and recreation
Percentage of GDP
China
China
6.9
5.5
5.5
5.3
4.1
G-20
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Chinese government; iResearch; China Information Almanac; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in China
$176
$10
Online
retail (C2C)
Online
retail (B2C)
billion $62
(0.4%) billion
(2.5%)
2010
Research online,
purchase offline
2010
billion $246
(3.4%)
billion
(4.7%)
$213
per
online
user
$96
2016
billion
(4.2% of
total retail)
Total retail
Percentage of total advertising expenditures in 2010
45.8
2016
25.4
6.6
2.4
$2.8
billion
Television
Newspaper
Out-of-home
18.0
11.9
7.9
Radio
Magazine
Online
25.1%
CAGR
$10.9
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Chinese government; iResearch; China Information Almanac; BCG analysis.
Note: Percentages may not total 100 due to rounding.
24 | The Internet Economy in the G-20
China’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$451
$598
$53
$47
Online shopping
Consumer
surplus
Perceived
value
Instant messaging
$46
$147
Cost
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
86
Alcohol
85
82
Coffee
79
Chocolate
78
Satellite
navigation
56
Fast food
45
Car
37
Exercise
Shower
36
Sex
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Chinese government; iResearch; China Information Almanac; BCG analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in China
High-Web
59
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage)1
SMEs’ percentage of
employment
Medium-Web
dium-Web
Low-Web and
No-Web
80
97
25
91
90
20
9
Medium- Low-Web and
No-Web
Web
HighWeb
SMEs’ percentage of GDP
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
12
Website
100
76
Online
advertising
77
3
Search
engine
optimization
89
12
Blogging
100
100
0
Social
networking
46
64
6
E-commerce Recruitment
62
3
Finance
59
0
64
3
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Chinese government; iResearch; China Information Almanac; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
2
This percentage reflects fewer than 10 responses from no-Web SMEs.
The Boston Consulting Group | 25
France’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
16
GDP contribution
($billions)
33
Government
spending
2010
TOTAL
14
28
Investment
42
Consumption
105
67
TOTAL
73
Real estate
Manufacturing
Wholesale and retail trade
Health care and social services
Public administration
Construction
Logistics
--12
Net exports
--10
Percentage of GDP
France
France
2.9
3.4
4.1
2.9
5.3
G-20
Education
Financial services
Hotels and restaurants
Agriculture
Food, beverages, and tobacco
Metals
Utilities
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; H2; IE Market Research; IDS; INSEE; company reports; Eurostat; Forrester Research; AXCO; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in France
$46
$27
billion
(4.5%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(6.7%)
$1,682
per
online
user
$78
2016
billion
(12.9% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
32.2
2016
19.4
15.1
7.0
Television
Newspaper
Magazine
Out-of-home
19.7
15.3
11.1
Radio
$2.3
billion
Online
5.6%
CAGR
$3.2
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; H2; IE Market Research; IDS; INSEE; company reports; Eurostat; Forrester Research; AXCO; BCG analysis.
Note: Percentages may not total 100 due to rounding.
26 | The Internet Economy in the G-20
France’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$4,453
$4,788
$597
E-mail
$570
General search
Consumer
surplus
Perceived
value
$420
$335
Online banking
and investing
Cost
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
86
77
Fast food
69
Satellite
navigation
66
Alcohol
61
Chocolate
42
Coffee
23
Exercise
16
Car
Sex
5
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; H2; IE Market Research; IDS; INSEE; company reports; Eurostat; Forrester Research; AXCO; BCG analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in France
96
High-Web
56
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage)1
SMEs’ percentage of
private-sector
employment
60
87
10
Medium-Web
dium-Web
Low-Web and
No-Web
65
6
7
HighWeb
SMEs’ percentage of
private-sector turnover
Medium- Low-Web and
No-Web
Web
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
43
Website
100
49
Online
advertising
78
8
Search
engine
optimization
63
100
4
Blogging
100
7
Social
networking
32
49
9
E-commerce Recruitment
38
5
Finance
61 10
38 5
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; H2; IE Market Research; IDS; INSEE; company reports; Eurostat; Forrester Research; AXCO; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
The Boston Consulting Group | 27
Germany’s Internet Economy
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
2016
GDP contribution
($billions)
Real estate
15
Government
spending
2010
Manufacturing
39
Wholesale and retail trade
Health care and social work
14
31
Investment
59
Consumption
TOTAL
Public administration
157
95
Logistics
TOTAL
100
Education
Construction
8
Financial services
Net exports
--5
Utilities
Hotels and restaurants
Percentage of GDP
Germany
Germany
Mining
4.0
3.0
3.0
5.3
4.1
G-20
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; Eurostat; Forrester Research; H2; IE Market Research; AXCO; DB Research; FBS; GfK; IDC; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Germany
$68
$38
billion
(7.1%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(11.7%)
$1,330
per
online
user
$88
billion
(16.2% of
total retail)
2016
Total
retail
Percentage of total advertising expenditures in 2010
34.3
22.9
Television
26.4
20.7
13.3
Newspaper
2016
Magazine
4.8
Out-of-home
$5.0
4.0
billion
Radio
Online
6.2%
CAGR
$7.1
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; Eurostat; Forrester Research; H2; IE Market Research; AXCO; DB Research; FBS; GfK; IDC; BCG analysis.
Note: Percentages may not total 100 due to rounding.
28 | The Internet Economy in the G-20
Germany’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$3,487
$3,857
$438
E-mail
$389
General search
Consumer
surplus
Perceived
value
$362
$370
Online banking
and investing
Cost
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
89
77
Fast food
Satellite
navigation
77
70
Alcohol
55
Chocolate
Coffee
45
23
Exercise
16
Car
10
Sex
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; Eurostat; Forrester Research; H2; IE Market Research; AXCO; DB Research; FBS; GfK; IDC; BCG analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in Germany
93
High-Web
54
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage)1
SMEs’ percentage of
private-sector
employment
61
82
18
57
Medium-Web
dium-Web
8
Low-Web and 4
No-Web
Medium- Low-Web and
No-Web
Web
HighWeb
SMEs’ percentage of
private-sector turnover
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
100
22
Website
67
Online
advertising
75 12
Search
engine
optimization
45
100
2
Blogging
100
0
Social
networking
49
50
3
E-commerce Recruitment
49
7
Finance
72
7
39
0
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; EC; Eurostat; Forrester Research; H2; IE Market Research; AXCO; DB Research; FBS; GfK; IDC; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
The Boston Consulting Group | 29
India’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
11
2
GDP contribution
($billions)
2010
Government
spending
32
Agriculture
forestry, and fishing
Financial services,
real estate, insurance,
and business services
108
Hotels and restaurants
TOTAL
Manufacturing
242
TOTAL
70
2
12
14
8
41
Social and personal services
Investment
Consumption
Construction
91
Net exports
Logistics and communications
Mining
Percentage of GDP
India
India
Utilities
5.6
4.1
4.1
5.3
4.1
G-20
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; H2; Reserve Bank of India; Indian government; Telecom Regulatory Authority of India; NASSCOM; MediaNama; Trendstream; BCG
analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in India
$84
Research online,
purchase offline
2010
billion
(4.5%)
$7
billion
(0.9%)
Online
retail
2010
$78
per
online
user
$6
2016
billion
(0.8% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
41.7
39.8
2016
7.7
3.5
4.0
$0.1
billion
Television
Newspaper
Out-of-home
Radio
Magazine
4.6
3.4
Online
25.3%
CAGR
$0.6
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; H2; Reserve Bank of India; Indian government; Telecom Regulatory Authority of India; NASSCOM; MediaNama; Trendstream; BCG
analysis.
Note: Percentages may not total 100 due to rounding.
30 | The Internet Economy in the G-20
India’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$414
$494
$48
E-mail
$46
Consumer
surplus
Perceived
value
General search
$44
$80
Cost
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
71
70
Satellite
navigation
67
Alcohol
64
Fast food
63
Chocolate
44
Coffee
38
Exercise
36
Car
Shower
33
Sex
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; H2; Reserve Bank of India; Indian government; Telecom Regulatory Authority of India; NASSCOM; MediaNama; Trendstream; BCG
analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in India
25
17
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage)1
SMEs’ percentage of
private-sector
employment
100
High-Web
19
Medium-Web
dium-Web
Low-Web and
No-Web
19
98
13
Medium- Low-Web and
No-Web
Web
HighWeb
SMEs’ percentage of GDP
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
100
86
5
Website
Online
advertising
74
79
17
Search
engine
optimization
100
35
Blogging
100
7
Social
networking
83
75
55
3
E-commerce Recruitment
51
1
Finance
60 12
50
1
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; H2; Reserve Bank of India; Indian government; Telecom Regulatory Authority of India; NASSCOM; MediaNama; Trendstream; BCG
analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
The Boston Consulting Group | 31
Indonesia’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
2
GDP contribution
($billions)
Manufacturing
2010
10
Government
spending
Agriculture
Hotels and restaurants
TOTAL
TOTAL
9
Mining
22
1
5
Investment
3
Consumption
Services
Financial services, real estate,
and business services
Logistics and communications
--2
Net exports
--1
Construction
13
Percentage of GDP
Indonesia
Indonesia
Electricity, gas, and water
1.5
1.3
5.3
4.1
G-20
1.3
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Magnaglobal; CCB; APEC; PTIK; Nielsen; IDC; Statistics Indonesia; H2;
Indikator TIK 2010; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Indonesia
$2
$0.4
billion
(0.1%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(0.3%)
$16
per
online
user
$1
2016
billion
(0.3% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
52.6
2016
35.1
7.0
0.6
3.9
0.8
$0.03
billion
Television
Newspaper
Out-of-home
Magazine
Radio
Online
2.1
39.3%
CAGR
$0.2
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Magnaglobal; CCB; APEC; PTIK; Nielsen; IDC; Statistics Indonesia; H2;
Indikator TIK 2010; BCG analysis.
Note: Percentages may not total 100 due to rounding.
32 | The Internet Economy in the G-20
Indonesia’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$364
$459
$46
General search
$43
Consumer
surplus
Perceived
value
E-mail
$36
$94
Cost
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
89
Alcohol
78
78
Chocolate
Shower
76
75
Satellite
navigation
73
Coffee
52
Fast food
34
Exercise
34
Car
Sex
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Magnaglobal; CCB; APEC; PTIK; Nielsen; IDC; Statistics Indonesia; H2;
Indikator TIK 2010; BCG analysis.
Note: Due to rounding, perceived value does not total consumer surplus plus cost.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in Indonesia
95
High-Web
97
57
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage)1
SMEs’ percentage of
private-sector
employment
Medium-Web
ium-Web
Low-Web and
No-Web
87
16
69
14
7
HighWeb
SMEs’ percentage of GDP
Medium- Low-Web and
No-Web
Web
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
100
7
Website
76
Online
advertising
79
22
Search
engine
optimization
100
75
16
Blogging
100
10
Social
networking
65
60
7
E-commerce Recruitment
56
0
Finance
64
3
63
0
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Magnaglobal; CCB; APEC; PTIK; Nielsen; IDC; Statistics Indonesia; H2;
Indikator TIK 2010; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
The Boston Consulting Group | 33
Italy’s Internet Economy
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
GDP contribution
($billions)
Investment
31
Consumption
--9
Net exports
43
Wholesale and retail trade
7
14
Public administration and defense
Health and social work
Construction
7
14
TOTAL
2016
Government
spending
2010
Real estate
and business services
Manufacturing
Financial services
TOTAL
Education
83
70
Travel and tourism
Restaurants
Agriculture
--9
Utilities
Logistics
Percentage of GDP
Communications
Italy
Italy
Mining
3.5
2.1
5.3
4.1
G-20
2.1
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Italian National Institute of Statistics (Istat); Politecnico di Milano (Polimi); Confindustria; Forrester Research; company reports; Assinform;
BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Italy
$50
$20
billion
(3.4%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(8.0%)
$1,499
per
online
user
$48
2016
billion
(8.4% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
2016
56.1
13.3
3.9
10.1
5.4
$1.3
billion
Television
Newspaper
Magazine
Radio
Out-of-home
26.6
11.3
Online
20.8%
CAGR
$3.8
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Italian National Institute of Statistics (Istat); Politecnico di Milano (Polimi); Confindustria; Forrester Research; company reports; Assinform;
BCG analysis.
Note: Percentages may not total 100 due to rounding.
34 | The Internet Economy in the G-20
Japan’s Internet Economy
2016
GDP contribution
($billions)
Public and
personal services
Manufacturing
36
2010
Government
spending
32
88
Real estate and business services
80
Wholesale and retail trade,
hotels, and restaurants
Public administration
TOTAL
163
372
271
Investment
TOTAL
258
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
Logistics and communications
Construction
Consumption
Finance and insurance
Net exports
--16
Electricity, gas, and water
--23
Percentage of GDP
Agriculture
Japan
Japan
5.6
4.7
4.7
5.3
4.1
G-20
Mining
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Japanese government; IDC; FCR; Nomura Research Institute; Nielson; Japan External Trade Organization ( JETRO); Dentsu; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Japan
$158
$89
billion
(4.3%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(6.8%)
$1,387
per
online
user
$139
2016
billion
(6.7% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
2016
50.4
13.8
8.1
Television
Newspaper
26.3
21.6
Out-of-home
4.1
Magazine
$7.0
2.0
billion
Radio
Online
3.7%
CAGR
$8.7
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Japanese government; IDC; FCR; Nomura Research Institute; Nielson; Japan External Trade Organization ( JETRO); Dentsu; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 35
Japan’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$679
Consumer
surplus
$1,446
Perceived
value
$148
E-mail
$142
$767
General search
$104
Cost
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
86
Satellite
navigation
86
Chocolate
85
74
Fast food
70
Coffee
Alcohol
60
56
Exercise
44
Sex
Car
17
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Japanese government; IDC; FCR; Nomura Research Institute; Nielson; Japan External Trade Organization ( JETRO); Dentsu; BCG analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in Japan
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage)1
SMEs’ percentage of
private-sector
employment
94
–3 High-Web
57
20
–4
–10
73
Medium-Web
Low-Web and
No-Web
SMEs’ percentage of
private-sector turnover
HighWeb
Medium- Low-Web and
No-Web
Web
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
57
Website
100
31
Online
advertising
68
7
Search
engine
optimization
88
12
Blogging
100
9
Social
networking
100
19
56
17
E-commerce Recruitment
54
28
2
Finance
56 7
51
2
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Japanese government; IDC; FCR; Nomura Research Institute; Nielson; Japan External Trade Organization ( JETRO); Dentsu; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
36 | The Internet Economy in the G-20
Mexico’s Internet Economy
2016
2
GDP contribution
($billions)
Manufacturing
2010
18
Government
spending
0
TOTAL
26
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
Hotels and restaurants
TOTAL
61
24
9
Investment
9
Consumption
7
Net exports
Financial services,
insurance, real estate,
and business services
Mining
Construction
Logistics and communications
18
Public and personal services
Agriculture, forestry, and fishing
Percentage of GDP
Mexico
Mexico
Electricity, gas, and water
4.2
2.5
5.3
4.1
G-20
2.5
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Banco de México; INEGI; company reports; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Mexico
$10
$2
billion
(0.3%)
Online
retail
$706
per
online
user
$27
2016
2010
Research online,
purchase offline
2010
billion
(1.6%)
billion
(5.8% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
2016
74.6
6.7
4.0
9.1
2.6
5.6
3.1
$0.1
billion
Television
Radio
Out-of-home
Newspaper
Magazine
Online
14.9%
CAGR
$0.2
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Banco de México; INEGI; company reports; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 37
Russia’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
3
GDP contribution
($billions)
Wholesale and
retail trade
Processing
21
Real estate
Government
spending
2010
Mining
Logistics and communications
TOTAL
2
75
63
Investment
12
Public administration
Construction
Financial services
TOTAL
27
18
Energy, gas, and water
Consumption
Agriculture
Net exports
Health care
--5
--12
Education
Percentage of GDP
Russia
Russia
Hotels and restaurants
Fishing
2.8
1.9
5.3
4.1
G-20
1.9
Internet
G-20
Sources: Economist Intelligence Unit (EIU); Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Central Control Directorate (GKU); ITU; Datamonitor; HSE; InSales; IDC; TNS; company reports; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Russia
$43
$12
billion
(1.7%)
Online
retail
Research online,
purchase offline
2010
billion
(3.2%)
2016
2010
$670
per
online
user
$33
billion
(4.8% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
2016
53.8
9.2
13.3
4.2
$0.9
billion
Television
Out-of-home
Newspaper
Magazine
19.0
10.8
8.6
Radio
Online
28.1%
CAGR
$4.0
billion
Online
Sources: Economist Intelligence Unit (EIU); Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Central Control Directorate (GKU); ITU; Datamonitor; HSE; InSales; IDC; TNS; company reports; BCG analysis.
Note: Percentages may not total 100 due to rounding.
38 | The Internet Economy in the G-20
Russia’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$138
$102
$1,002
$1,197
Consumer
surplus
Perceived
value
General search
Social networking
$89
$196
News
Cost
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
88
Fast food
85
Satellite
navigation
80
Alcohol
76
Chocolate
70
Coffee
50
Exercise
36
Car
15
Sex
14
Shower
Sources: Economist Intelligence Unit (EIU); Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Central Control Directorate (GKU); ITU; Datamonitor; HSE; InSales; IDC; TNS; company reports; BCG analysis.
Note: Due to rounding, perceived value does not total consumer surplus plus cost.
The Boston Consulting Group | 39
Saudi Arabia’s Internet Economy
2016
4
GDP contribution
($billions)
Public administration
Nonoil manufacturing
Wholesale trade and restaurants
Financial services and real estate
29
21
Financial services nondwellings
5
Investment
Logistics and communications
5
Consumption
Oil manufacturing
–2
Net exports
Agriculture, forestry, and fishing
--4
Social services
Percentage of GDP
Saudi
Arabia
Construction
TOTAL
2
10
Mining
7
Government
spending
2010
TOTAL
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
Saudi
Arabia
Electricity, gas, and water
Mining and quarrying (nonoil)
3.8
2.2
5.3
4.1
G-20
2.2
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD); CCB;
Saudi Arabia Central Department of Statistics and Information; Arab Advisors Group; Pyramid Research; IEMR; company reports; World Bank; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Saudi Arabia
$15
$3
Online
retail
billion
(2.9%)
2010
Total
retail
Research online,
purchase offline
2010
billion
(8.0%)
2016
$5
billion
(4.7% of
total retail)
$424
per
online
user
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD); CCB;
Saudi Arabia Central Department of Statistics and Information; Arab Advisors Group; Pyramid Research; IEMR; company reports; World Bank; BCG analysis.
40 | The Internet Economy in the G-20
South Africa’s Internet Economy
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
2016
GDP contribution
($billions)
Financial services, real
estate, and business services
2
Manufacturing
2010
Government
spending
6
Public administration
1
TOTAL
7
14
4
Investment
4
Consumption
Logistics and communication
9
Personal services
Mining
Net exports
--2
Construction
--3
Agriculture, forestry, and fishing
Percentage of GDP
South
Africa
Wholesale and retail trade,
hotels, and restaurants
TOTAL
South
Africa
2.5
1.9
Electricity, gas, and water
5.3
4.1
G-20
1.9
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Statistics South Africa; IEMR; Pyramid Research; World Wide Worx; company reports; World Bank; World Trade Organization; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in South Africa
$4
$2
billion
(1.2%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(1.5%)
$339
per
online
user
$2
2016
billion
(1.2% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
45.6
2016
23.2
12.5
9.0
5.8
8.0
3.9
$0.2
billion
Television
Newspaper
Radio
Magazine
Out-of-home
Online
24.2%
CAGR
$0.6
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Statistics South Africa; IEMR; Pyramid Research; World Wide Worx; company reports; World Bank; World Trade Organization; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 41
South Africa’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$222
$211
$1,215
$1,615
Consumer
surplus
Perceived
value
$211
$400
Cost
E-mail
General search
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
81
Satellite
navigation
80
Fast food
77
Alcohol
74
Chocolate
63
Coffee
49
Exercise
22
Sex
13
Shower
10
Car
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Statistics South Africa; IEMR; Pyramid Research; World Wide Worx; company reports; World Bank; World Trade Organization; BCG analysis.
42 | The Internet Economy in the G-20
South Korea’s Internet Economy
2016
GDP contribution
($billions)
Investment
35
Consumption
20
Net exports
Public and personal services
16
Government
spending
6
13
75
Manufacturing
9
2010
TOTAL
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
58
TOTAL
114
Real estate and business services
Wholesale and retail trade, hotels,
and restaurants
Finance and insurance
Construction
Public administration
Logistics
31
Agriculture
Electricity, gas, and water
Percentage of GDP
South
Korea
South
Korea
8.0
7.3
7.3
5.3
4.1
G-20
Mining
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Korea National Statistics Office; IE Market Research; Bank of Korea; Korea Internet Security Agency (KISA); company reports; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in South Korea
$39
$23
billion
(6.6%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(8.1%)
$1,099
per
online
user
$44
2016
billion
(13.0% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
41.5
2016
26.0
6.9
5.4
2.2
Television
Newspaper
27.0
17.9
Out-of-home
Magazine
Radio
$1.3
billion
Online
15.2%
CAGR
$3.1
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Korea National Statistics Office; IE Market Research; Bank of Korea; Korea Internet Security Agency (KISA); company reports; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 43
South Korea’s Consumers Benefit from the Internet
$96
What do
consumers
value?
Annual value
$453
$87
Consumer
surplus
$824
Perceived
value
General search
E-mail
$372
$74
Cost
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
84
83
Chocolate
Fast food
74
Satellite
navigation
70
69
Coffee
50
Alcohol
Exercise
43
41
Car
25
Sex
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Korea National Statistics Office; IE Market Research; Bank of Korea; Korea Internet Security Agency (KISA); company reports; BCG analysis.
Note: Due to rounding, perceived value does not total consumer surplus plus cost.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in South Korea
SMEs’ percentage of
private-sector
employment
Historical three-year sales growth
of SMEs (percentage) 1
94
High-Web
88
51
Percentage of SMEs that added
jobs during the last three years 1
91
6
Medium-Web
dium-Web
Low-Web and –5
No-Web
70
13
HighWeb
SMEs’ percentage of
gross industrial output
Medium- Low-Web and
No-Web
Web
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
18
Website
100
70
Online
advertising
78
27
Search
engine
optimization
75 17
Blogging
100
100
6
Social
networking
49
43 1
E-commerce Recruitment
62
4
Finance
48
2
49
0
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Korea National Statistics Office; IE Market Research; Bank of Korea; Korea Internet Security Agency (KISA); company reports; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
44 | The Internet Economy in the G-20
Turkey’s Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
2
GDP contribution
($billions)
Government
spending
2010
TOTAL
1
4
Investment
8
Consumption
--1
Net exports
TOTAL
12
Manufacturing
Logistics
Ownership and dwellings
Wholesale and retail
Agriculture and fishing
Real estate
Public administration
Construction
Financial services
Education
Hotels and restaurants
Electricity, gas, and water
Health care and social work
Mining
10
31
23
--4
Percentage of GDP
Turkey
Turkey
2.3
1.7
5.3
4.1
G-20
1.7
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Turkish Statistical Institute; Turkish Telecommunication Authority; World Economic Forum; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in Turkey
$9
$2
billion
(0.6%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(1.1%)
$1,212
per
online
user
$37
2016
billion
(8.5% of
total retail)
Total
retail
2016
Percentage of total advertising expenditures in 2010
52.2
17.8
22.0
7.7
2.4
2.7
13.0
$0.9
17.9%
$0.3
billion
CAGR
billion
Television
Newspaper
Out-of-home
Radio
Magazine
Online
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Turkish Statistical Institute; Turkish Telecommunication Authority; World Economic Forum; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 45
Turkey’s Consumers Benefit from the Internet
What do
consumers
value?
Annual value
$323
$540
$68
General search
$67
Consumer
surplus
Perceived
value
E-mail
$61
$217
Cost
Online banking
and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
82
74
Satellite
navigation
Alcohol
71
66
Fast food
65
Chocolate
Coffee
59
32
Exercise
Car
23
19
Sex
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Turkish Statistical Institute; Turkish Telecommunication Authority; World Economic Forum; BCG analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in Turkey
95
High-Web
78
66
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage) 1
SMEs’ percentage of
private-sector
employment
17
Medium-Web
dium-Web
Low-Web and –5
No-Web
88
78
10
HighWeb
SMEs’ percentage of
private-sector turnover
Medium- Low-Web and
No-Web
Web
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
100
30
Website
50
Online
advertising
76
15
Search
engine
optimization
57
100
6
Blogging
100
25
Social
networking
40
55
7
E-commerce Recruitment
59 11
67
Finance
Paying E-procurement
suppliers
11
42
1
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; Turkish Statistical Institute; Turkish Telecommunication Authority; World Economic Forum; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
46 | The Internet Economy in the G-20
The U.K. Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
26
47
GDP contribution
($billions)
Government
spending
2010
26
36
TOTAL
347
257
Investment
TOTAL
187
Consumption
120
Utilities
Hotels and restaurants
Communications
18
Net exports
4
Percentage of GDP
U.K.
U.K.
8.3
12.4
4.1
Mining
Agriculture
8.3
5.3
G-20
Real estate and
business services
Wholesale and retail
Manufacturing
Financial services
Health care and social work
Construction
Education
Public administration
Logistics
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Eurostat; Organisation for Economic Co-operation and Development
(OECD); Magnaglobal; CCB; U.K. Office for National Statistics (ONS); H2; IMRG; IDC; GfK; IE Market Research; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in the U.K.
$230
$102
billion
(13.5%)
Online
retail
2010
Research online,
purchase offline
2010
billion
(23.0%)
$1,641
per
online
user
$87
2016
billion
(11.5% of
total retail)
Total
retail
2016
Percentage of total advertising expenditures in 2010
29.1
8.0
7.6
3.0
Television
Newspaper
37.3
28.9
23.3
Magazine
Out-of-home
Radio
$5.4
billion
Online
7.7%
CAGR
$8.4
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Eurostat; Organisation for Economic Co-operation and Development
(OECD); Magnaglobal; CCB; U.K. Office for National Statistics (ONS); H2; IMRG; IDC; GfK; IE Market Research; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 47
U.K. Consumers Benefit from the Internet
$3,372
$3,753
$407
What do
consumers
value?
Annual value
E-mail
$377
General search
Consumer
surplus
Perceived
value
$359
$381
Online banking
and investing
Cost
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
91
Fast food
84
Satellite
navigation
78
Chocolate
76
65
Coffee
47
Alcohol
25
Exercise
Sex
21
17
Car
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Eurostat; Organisation for Economic Co-operation and Development
(OECD); Magnaglobal; CCB; U.K. Office for National Statistics (ONS); H2; IMRG; IDC; GfK; IE Market Research; BCG analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in the U.K.
85
High-Web
59
49
Percentage of SMEs that added
jobs during the last three years 1
Historical three-year sales growth
of SMEs (percentage) 1
SMEs’ percentage of
private-sector
employment
Medium-Web
ium-Web
Low-Web and
No-Web
12
75
51
7
4
HighWeb
SMEs’ percentage of
private-sector turnover
Medium- Low-Web and
No-Web
Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
53
Website
100
42
Online
advertising
80
9
Search
engine
optimization
50 9
Blogging
100
23
Social
networking
100
22
40
3
E-commerce Recruitment
High-Web
Low-Web
39 20
78
Finance
Paying E-procurement
suppliers
10
28
3
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Eurostat; Organisation for Economic Co-operation and Development
(OECD); Magnaglobal; CCB; U.K. Office for National Statistics (ONS); H2; IMRG; IDC; GfK; IE Market Research; BCG analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
48 | The Internet Economy in the G-20
The U.S. Internet Economy
2016
GDP contribution
($billions)
Public administration
Real estate
Manufacturing
Wholesale and retail trade
Finance and insurance
Health care
Professional, scientific
Information and technical services
Construction
Logistics
Waste management
Accomodation and food services
Mining
Utilities
Business services
Education
Agriculture
Arts, entertainment, and recreation
129
2010
Government
spending
289
128
TOTAL
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
TOTAL
Investment
236
1,000
596
684
330
Consumption
--11
Net exports
--15
Percentage of GDP
U.S.
U.S.
5.4
4.7
4.7
5.3
4.1
G-20
Internet
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; U.S. Bureau of Labor Statistics; U.S. Small Business Administration; PC; Forrester Research; H2; Fitch; World Economic Forum; BCG
analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in the U.S.
$456
$252
Online
retail
2010
Research online,
purchase offline
2010
billion
(7.1%)
billion
(5.0%)
$1,926
per
online
user
$482
2016
billion
(9.6 % of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
2016
40.3
15.9
10.9
4.3
10.5
$26
billion
Television
Newspaper
25.6
18.2
Magazine
Radio
Out-of-home
Online
10.5%
CAGR
$47
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; U.S. Bureau of Labor Statistics; U.S. Small Business Administration; PC; Forrester Research; H2; Fitch; World Economic Forum; BCG
analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 49
U.S. Consumers Benefit from the Internet
$2,528
$3,000
$321
What do
consumers
value?
Annual value
General search
$318
Consumer
surplus
Perceived
value
E-mail
$291
$472
Online banking
and investing
Cost
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
84
83
Satellite
navigation
77
Fast food
Chocolate
73
69
Alcohol
Coffee
43
Exercise
21
10
Sex
Car
7
Shower
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; U.S. Bureau of Labor Statistics; U.S. Small Business Administration; PC; Forrester Research; H2; Fitch; World Economic Forum; BCG
analysis.
The Internet’s Impact on Small and Medium Enterprises (SMEs) in the U.S.
SMEs’ percentage of
private-sector
employment
Historical three-year sales growth
of SMEs (percentage) 1
24
High-Web
48
45
Percentage of SMEs that added
jobs during the last three years 1
10
Medium-Web
ium-Web
Low-Web and –5
No-Web
18
8
HighWeb
SMEs’ percentage of
private-sector turnover
Medium- Low-Web and
No-Web
Web
High-Web
Low-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity)
100
46
Website
100
39
Online
advertising
74
6
Search
engine
optimization
63 10
Blogging
100
100
12
Social
networking
33
49 6
E-commerce Recruitment
13
42
5
Finance
52 3
27
1
Paying E-procurement
suppliers
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; U.S. Bureau of Labor Statistics; U.S. Small Business Administration; PC; Forrester Research; H2; Fitch; World Economic Forum; BCG
analysis.
1
High-Web companies use a wide range of Internet tools to market, sell, and support customers, interact with suppliers, and empower employees; medium-Web
businesses market or sell goods or services online; low-Web businesses have a website or a social-networking site; no-Web businesses do not have a website.
50 | The Internet Economy in the G-20
The Internet Economy in the EU-27
2016
GDP contribution
($billions)
2010
Government
spending
Top ten national contributions to
Internet GDP (percentage of the
Internet GDP of the EU-27)
121
U.K.
223
Germany
16.1
11.8
France
98
171
TOTAL
Investment
1,133
810
TOTAL
619
30.0
385
Consumption
--34
Net exports
--22
Percentage of GDP
EU-27
EU-27
5.7
3.8
5.3
4.1
G-20
7.1
Italy
Netherlands
5.7
Spain
5.7
Sweden
5.0
Denmark
3.0
Poland
2.4
Belgium
2.0
G-20
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internet’s Impact on Commerce in the EU-27
$650
billion
(10.8%)
$289
billion
(5.7%)
Online
retail
2010
Top ten national contributions to online retail (percentage
of total online retail for the EU-27)
2016
Total
retail
U.K.
Germany
France
Sweden
Italy
Spain
Netherlands
Denmark
Finland
Ireland
9.3
6.8
6.7
5.1
5.0
4.0
2.4
2.3
35.1
13.3
2016
Percentage of total advertising expenditures in 2010
33.3
23.9
11.5
Television
Newspaper
27.1
19.1
Magazine
6.8
Out-of-home
$20
5.4
billion
Radio
Online
9.2%
CAGR
$34
billion
Online
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; BCG analysis.
Note: Percentages may not total 100 due to rounding.
The Boston Consulting Group | 51
BCG’s e-Intensity Index Highlights Internet Prowess Across the EU-27 Economies
Denmark
Sweden
U.K.
Netherlands
Finland
Luxembourg
Germany
France
Belgium
Austria
Ireland
Spain
Slovenia
Czech Republic
Estonia
Portugal
Poland
Italy
Hungary
Greece
Slovakia
Natives
0
50
100
Players
Nascent Laggards
natives
150
200
BCG e-Intensity score
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; BCG analysis.
Note: The index is scaled so that the geometric mean is 100 for the 34 OECD member countries. The scores of several countries were derived due to lack of
complete data. The categories of Internet intensity--nascent natives, natives, players, and laggards--are illustrated in Exhibit 3 of this report. Graph excludes
Bulgaria, Cyprus, Latvia, Lithuania, Malta, and Romania.
How the EU-27 Economies Stack Up on the Components of BCG’s e-Intensity Index
Natives
Players
Nascent Laggards
natives
Expenditure
(a measure of spending in online
retail and online advertising)
Enablement
(a measure of Internet
infrastructure)
Sweden
Denmark
Luxembourg
Netherlands
Finland
U.K.
Germany
Austria
France
Belgium
Ireland
Portugal
Spain
Slovenia
Estonia
Italy
Czech Republic
Greece
Slovakia
Hungary
Poland
Denmark
U.K.
Sweden
Netherlands
Germany
Finland
France
Czech Republic
Luxembourg
Poland
Belgium
Hungary
Slovenia
Spain
Ireland
Austria
Italy
Slovakia
Portugal
Estonia
Greece
0
50
100
150
200
Engagement
(a measure of Internet involvement
by businesses, the governments,
and consumers)
U.K.
Netherlands
Denmark
Sweden
Germany
Finland
Austria
Ireland
Estonia
France
Spain
Belgium
Luxembourg
Slovenia
Czech Republic
Hungary
Portugal
Poland
Greece
Slovakia
Italy
0
100
300
0
50
100
150
BCG e-Intensity score
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Organisation for Economic Co-operation and Development (OECD);
Magnaglobal; CCB; BCG analysis.
Note: The indices were scaled so that the geometric mean is 100 for the 34 OECD members. The scores of several countries were derived due to lack of
complete data. Graph excludes Bulgaria, Cyprus, Latvia, Lithuania, Malta, and Romania.
52 | The Internet Economy in the G-20
note to the reader
About the Authors
David Dean is a senior partner and
managing director in the Munich office of The Boston Consulting Group.
Sebastian DiGrande is a partner and
managing director in the firm’s San
Francisco office. Dominic Field is a
partner and managing director in
BCG’s Los Angeles office. Andreas
Lundmark is a principal in the firm’s
Stockholm office. James O’Day is a
project leader in BCG’s London office.
John Pineda is a principal in the
firm’s San Francisco office. Paul Zwillenberg is a partner and managing director in BCG’s London office.
Acknowledgments
This report is a product of BCG’s Technology, Media & Telecommunications
practice.
The authors are indebted to multiple
BCG partners and colleagues for their
contributions and insights during the
preparation of this report: Marcos Aguiar (Sao Paulo), Jorge Becerra (Santiago), Jeffery Bernstein (Tokyo), Julio
Bezerra (Sao Paulo), Vladislav Boutenko (Moscow), Ethan Choi (Seoul), Olavo Cunha (Sao Paulo), Tenbite Ermias
( Johannesburg), Yucel Ersoz (Istanbul), Philip Evans (Boston), Patrick
Forth (Sydney), Tawfik Hammoud (Toronto), Susumu Hattori (Tokyo), Joerg
Hildebrandt (Dubai), Nimisha Jain
(New Delhi), Carl Kalapesi (London),
David Michael (Beijing), Vaishali Rastogi (Singapore), David Rhodes (London), Hermann Riedl (Abu Dhabi),
Ryoji Kimura (Tokyo), Henri Salha
(Paris), Kanchan Samtani (Mumbai),
Just Schuermann (Munich), Shigeki
Ichii (Tokyo), Marc Vos (Milan), Sarah
Willersdorf (New York), Yukimasa
Uchida (Tokyo), and Yvonne Zhou
(Beijing).
They are also grateful to Gaby Barrios,
Patrick Böert, Jonathan Colclough,
Suruj Dutta, Ana Carolina Freire, Haywood Ho, Chip Horne, Tom Hussey,
Taantee Karmakar, Joe Lee, Brandon
Miller, Matt Pan, Lisa Robinson, Christoffer Rutgersson, Stevenlie Satryaputra, and Marta Szczerba for their assistance.
The authors would like to thank
David Duffy and Mark Voorhees for
their help in writing this report and
Angela DiBattista, Gary Callahan, Kim
Friedman, Angela Goldberg, Sara
Strassenreiter, and Mary DeVience for
contributions to its editing, design,
and production.
For Further Contact
If you would like to discuss this report,
please contact one of the authors.
David Dean
Senior Partner and Managing Director
Munich
+49 89 2317 4150
dean.david@bcg.com
Sebastian DiGrande
Partner and Managing Director
San Francisco
+1 415 732 8000
digrande.sebastian@bcg.com
Dominic Field
Partner and Managing Director
Los Angeles
+1 213 621 2772
field.dominic@bcg.com
James O’Day
Project Leader
London
+44 207 753 5353
o’day.james@bcg.com
John Pineda
Principal
San Francisco
+1 415 732 8000
pineda.john@bcg.com
Paul Zwillenberg
Partner and Managing Director
London
+44 207 753 5353
zwillenberg.paul@bcg.com
For Further Reading
The Boston Consulting Group publishes
extensively on topics related to marketing
in the digital economy. Recent examples
include those listed here:
Digital Manifesto
A Focus by The Boston Consulting Group,
January 2012
Turning Local
A Focus by The Boston Consulting Group,
September 2011
The Connected Kingdom
A report by The Boston Consulting Group,
October 2010
Andreas Lundmark
Principal
Stockholm
+46 8 402 4400
lundmark.andreas@bcg.com
The Boston Consulting Group | 53
© The Boston Consulting Group, Inc. 2012. All rights reserved.
For information or permission to reprint, please contact BCG at:
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