What a difference a year makes. Over the last twelve months, sales of smartphones surpassed feature phones for the first time, global mobile subscribers hit close to seven billion, and data traffic grew by 80% – thanks largely to emerging market growth. As the year draws to a close, the developing world is not only supplying the most dynamic markets, but also some of the most exciting innovations.
So what lies in store for 2014? Here are Jana’s 10 predictions for the global technology marketplace in the coming year.
10. Global E-Commerce Will Thrive, With or Without Amazon
While founder Jeff Bezos dreams of 30-minute drone delivery in the Unites States, the continued absence of Amazon from most emerging markets is creating an exciting climate for homegrown alternatives.
In 2014, over $475 billion in e-commerce transactions will occur in emerging markets. In Asia Pacific, India, Africa, and Latin America, this will be driven by companies like Jumia, Mercado Libre, and OLX, local innovators that are supplying practical solutions to longstanding infrastructure and security issues. Furthermore, rapid adoption among local and regional producers suggests that online retail is here to stay at every level. If Amazon plans to make its move into emerging markets, it may find that the competition is tougher than expected.
9. Xiaomi Smartphones Will Join the Global Mainstream
In China’s chaotic smartphone market, Xiaomi stands out as the most dynamic challenger to top-performer Samsung. In just two years, savvy marketing and quality products have helped the brand to claim a 5% market share, muscling past a host of local start-ups and even Apple to become a top six player on its home turf. Last month, Xiaomi sold 150,000 units of its flagship device on WeChat in less than ten minutes.
For Xiaomi, this is just the beginning. At a media event in December, executives suggested that 2014 will see the beginning of the company’s global expansion, first in Singapore and Malaysia, and then throughout Southeast Asia.
Wherever Xiaomi takes its first steps onto the international stage, it promises to be an exciting year for the brand. Products like the $130 Hongmi smartphone are already being snapped-up by consumers in Hong Kong and Taiwan, and with Xiaomi’s attractive combination of high-quality content, superior function, and affordable pricing, it may not be long before the rest of Asia’s prize markets follow suit.
8. Low-cost Data Will Establish Mobile as an Entertainment Platform
With network vendors driving down prices and content providers improving accessibility, data connectivity is becoming cheap, fast, and strong enough to permanently change the way that people work and play.
In 2014, the world will see a 51% increase in global connection speeds, contributing to the ten-fold increase in mobile data traffic that Ericsson predicts for 2019. The key benefactor of this growth? Entertainment – specifically video traffic, which is projected to grow by 76% annually for the next four years. As capacity for high-definition video streaming improves, Jana predicts significant changes in the creation and distribution of content throughout the year ahead.
7. The Rise of IM Will Push SMS into Decline
In 2012, SMS went off a cliff. From 2008 to 2012, growth in number of SMS texts sent had been a steady and impressive 28% per year, but the arrival of several new instant messaging providers and zero-rated social networks (networks that don’t use up part of a user’s data plan) had an immediate effect. SMS growth slowed to just 8%.
Between 2013 and 2014, SMS will see negative annual growth for the first time, as users turn to an increasingly diverse IM marketplace.
Line, an instant messaging client from Japan that launched in 2011, has already won 300 million users and a huge chunk of market share in Southeast Asia with its messaging function and digital ‘stickers’ that users can buy, send, and share. Elsewhere, the Korean client KakaoTalk has a user base of over 100 million, TenCent’s WeChat has 300 million (primarily Chinese) users, and Blackberry Messenger and WhatsApp continue to perform strongly. As mobile connectivity grows in 2014, global traffic for SMS and even voice calls will decline as IM takes center stage.
6. The 4G Revolution in Indonesia Will Open up Asia’s Next Big Market
When service provider Internux launched its portable Bolt 4G mobile device in November, Indonesia took a small but significant step towards widespread 4G connectivity. In 2014, commercial rollout of 4G LTE will create staggering opportunities for digital marketers and global brands. Here’s why.
Despite its status as a top five market player for Facebook and Twitter, Indonesia has a surprisingly low Internet penetration rate of just 22%. Couple this impressive social media participation with Indonesia’s burgeoning consumer class, and you have a recipe for enormous opportunity. With 74 million middle class and affluent consumers in Indonesia (a number that will double by 2020), the social media, video content, and games that 4G can bring to every smartphone handset in the country will shape the consumer landscape of the future.
5. The 2014 World Cup in Brazil Will be the Most Social Sporting Event in History
With a global audience of over 3 billion, and unmatched popularity in emerging markets, the FIFA World Cup is the world’s biggest sporting event. At the 2014 championships in Brazil, the soccer world will see for the first time how the mobile tech advances of the last four years can shape the viewer experience.
The possibilities are endless: record numbers of mobile views, hundreds of millions of social media mentions, and real-time marketing interaction on a huge scale. Over one month and 64 games involving 32 of the world’s greatest national teams (14 of which come from Africa and Latin America), Brazil will be at the center of the social media world.
Marketers will aggressively shift ad spend to video and social networks in the hope of converting this volume of online interaction into sales. For many, World Cup 2014 will serve as perfect preparation for the next big digital payday, the Rio 2016 Olympic Games.
4. Regulators Will Decide the Future of Mobile Payments and Banking
Since 2012, the volume of wireless money transfers in India has doubled, with an annualized run rate of $3.2 billion. There are projections that in India alone, $350 billion will be transferred annually by 2015.
Ezetap and Paymate are just two of the many companies that are seeking to take advantage of this opportunity in India, but internationally the model for mobile payment systems remains M-Pesa, a company operated out of Kenya by Safaricom.
Whereas M-Pesa has a significant operational advantage within Kenya’s permissive banking climate, the opportunity to move money among devices is being hindered by the (often fluctuating) regulatory environment in countries like India and Brazil. If mobile money is to realize its potential, regulators, banks, and other actors will have to work together in 2014, or face a future where peer-to-peer payment networks like Bitcoin have all the advantages.
3. Facebook’s User Balance Will Tip Towards Non-Western Markets
Growth projections for 2014, combined with the strength of Facebook’s mobile advertising strategy and increased ad spend in emerging markets, is set to rapidly change the composition of Facebook’s regional revenue. Even with modest growth scenarios (keeping growth rates consistent with past annual growth rates), over half of Facebook’s revenues will come from non-Western markets by Q2 2017.
2. India Will Arrive as Facebook’s #1 Market (and that’s just the beginning…)
After three consecutive years of rapid growth, India will overtake the United States as Facebook’s top market in 2014.
The numbers don’t lie: 114.8 million users (compared to 146.8 million in the U.S.) and an annual growth rate of 47% (far outstripping 3.7% in the U.S.) makes it a near-certainty that India will be established as Facebook’s largest market within months. While established markets are nearing saturation point, India’s Facebook journey is just beginning. With an active base already in place, and Internet usage growing by 40% year-on-year, the question for Facebook is not ‘when will India hit the top?’ but ‘how high can it go once it gets there?’
1. A Smartphone Will Cost Less than a Carton of Cigarettes
Smartphones were once the plaything of the affluent, but in 2014, falling production costs will make mobile Internet accessible to nearly every level of international markets. Average price is falling across the board, largely because of a rapidly expanding low-end market, where emerging brands are creating smartphones for the price of a microchip, a battery, and a touchscreen.
In 2014, Jana predicts that several Chinese-made smartphones will be available to buy for under $20. For millions of Chinese consumers, that’s cheaper than a carton of Marlboro cigarettes, and around the same price as a mid-range feature phone like the Nokia 6300. For the first time, feature phones will lose their price advantage, and mobile Internet accessibility will become an affordable luxury for millions more people in emerging markets.
For businesses, 2014 presents an abundance of exciting opportunities in under-served growth markets. As the “brick phone” economy of the last decade gives way to new technologies and mobile Internet, investment in the developing world will be vital for survival in a new global marketplace, not just for the next year, but for decades to come.