BRICs Make an Increasingly Large Impact on the Internet

BRICs (Brazil, Russia, India, and China), the group of 4 countries, first coined by Goldman Sachs, are exerting a much greater influence on the global state of the internet: While in 2004 only China and India were in the top 10 countries for TMT (Tehcnology / Media / Telecom), in 2006 Brazil and Russia replaced South Korea and Canada on that list (source: Morgan Stanley Research, 2008). China has recently become the global leader in the following key TMT categories: population (1.3B), credit cards (1.1M), mobile subs (446M), telephone lines (368M), cable / satellite subs (155M) - [source: Morgan Stanley Research, 2008]. Only less than 1% of world's internet users were in China in 1995, but in 2007, 16% of the Internet users originated in China (~210M).

The importance of the BRIC countries like China have an ever growing consequence for the top US sites as well. The top 5 global properties, consisting of Google, Microsoft, Yahoo, YouTube and eBay derived virtually three quarters of their traffic from non-US users (source: comScore 2008). The ratio is as high as 78% for Microsoft and Google.

While the BRIC countries already established themselves among the top 10 countries in the world with the highest number of internet users, the penetration rate of internet usage is still incredibly low in these countries. In my opinion, it is exactly this contrast that makes these 4 countries highly interesting to watch.

Comments

[Colin Wong]

As always. Very insightful.

[Vivek Puri]

http://www.ibef.org/economy/consumermarket.aspx