This document provides an overview and analysis of digital trends and online markets for 2017. It examines the MotionPoint Index top 30 markets, including standout markets like China, India, and Saudi Arabia that saw improvements. The document also provides a global snapshot of the impact of 2016 macroeconomic trends on markets and considers disruptive trends like evolving e-commerce regulations and the rise of virtual marketplaces. It concludes by looking ahead to how shockwaves from 2016 may influence online commerce in coming years.
2. Table of Contents
Introduction...........................................................................................................................................1
The MotionPoint Index™ Top 30 Markets...................................................................................3
Standout Markets in This Year’s MPI.............................................................................................5
Global Snapshot: Impact of 2016 Macroeconomic Trends.................................................13
Evolving E-Commerce Regulations in the EU............................................................................23
E-Commerce Disruption: Virtual Marketplaces and Offsite Social Commerce.............32
Shockwaves of 2016..........................................................................................................................41
Looking Ahead.....................................................................................................................................46
Appendix...............................................................................................................................................47
Credits....................................................................................................................................................52
3. 1Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Introduction
Each year, MotionPoint examines the global economic landscape, geopolitical fluctuations
and emerging technologies in an effort to identify compelling global trends that companies
should prepare for the upcoming year. The result of this extensive research and analysis is
our annual Trendbook report.
We combine our experience as a website translation solutions provider, along with proprietary
first-party and authoritative third-party data, to provide a compelling, data-driven perspective
of how international consumers use the Internet.
Within this document, you’ll discover:
The MotionPoint Index™ Top 30 Markets
The MotionPoint Index combines our actual client performance information, along with
macroeconomic information and technological trends, to highlight some of the most attractive
markets for expansion in 2017. This year, MotionPoint increased the number of data points
in its Trendbook calculation methodology, making it more authoritative than ever. We also
recalculated 2016’s Index findings to accurately compare them with this year’s.
The Global Snapshot
The Snapshot provides a high-level overview of global factors that impacted the world
economy in 2016, and offers suggestions of what to anticipate in 2017.
4. 2Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Three Disruptive Trends of 2016
In these chapters, you’ll discover how mobile is fast becoming the most important channel
in which businesses should invest their resources (chapter 4). You’ll learn ways to prepare
for evolving EU regulations that will disrupt e-commerce in 2017 (chapter 5). You’ll also see
how the ubiquity of social networks, combined with tight integrations with digital payment
platforms, will redefine how consumers shop online (chapter 6).
Shockwaves of 2016
We also examine three non-digital disruptions from 2016 that will likely have an impact on
online and cross-border commerce in the upcoming years.
We hope this analysis proves useful for your organization, as you pursue international business
opportunities in 2017—and beyond.
5. 3Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
For years, MotionPoint has leveraged authoritative third-party data and its exclusive
insights—informed by operating more than 1,000 translated websites in over 40 languages
in dozens of markets—to identify expansion-worthy global markets for its customers. We
also compile and share these findings in our annual MotionPoint Index™, or MPI.
The MPI ranks countries based on their growth potential on a 0-100 point scale with max-
min methodology; the higher the ranking, the more attractive the market is for expanding
businesses.
Markets eligible for inclusion in the MPI are selected based on several criteria, including
political stability, population, per capita GDP, insights from reputable third-party sources
(such as the International Monetary Fund, the World Bank, UNESCO and the United Nations),
and MotionPoint’s exclusive data and expertise.
This year, 88 countries met the criteria for inclusion in the MPI. Examining this year’s Top
30 markets, our analysts saw some surprising countries rise to accompany the perennially
highly-ranked United States, Germany and UK. These markets included China, India, and
Saudi Arabia.
The MotionPoint Index™
Top 30 Markets
6. 4Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Ranking Country Macro and Task
Environment
MotionPoint
Market Magnitude
The MotionPoint
Index
Position
Change
Core Markets in 2017 1 United States 74.9 91.2 99.0 0
2 China 57.4 92.7 80.6 4
3 Germany 70.6 77.8 80.4 -1
4 United Kingdom 72.8 75.5 79.5 -1
5 Japan 66.5 81.1 77.2 2
6 France 69.5 72.5 74.0 -2
7 South Korea 68.1 72.2 71.5 -2
8 Canada 69.4 71.1 71.1 0
9 Netherlands 72.6 64.7 66.8 1
10 Australia 70.1 66.3 65.1 -1
Market for Expansion in 2017 11 Russia 56.1 78.4 63.8 2
12 Spain 62.9 70.9 63.5 -1
13 Sweden 72.5 59.9 61.7 2
14 Italy 57.8 71.3 58.5 6
15 Hong Kong 74.5 55.5 57.8 -1
16 Singapore 73.4 55.7 57.2 0
17 Poland 59.7 67.2 57.1 1
18 India 44.0 85.1 56.9 6
19 Belgium 67.7 60.1 56.8 0
20 Switzerland 68.5 58.7 56.5 -8
Markets to Monitor in 2017 21 Mexico 52.6 72.1 55.6 2
22 Denmark 71.6 54.7 55.4 0
23 Norway 70.0 55.8 54.6 -6
24 Saudi Arabia 51.0 67.9 51.5 12
25 Brazil 46.1 78.7 51.4 0
26 Finland 70.3 52.9 51.3 0
27 Austria 65.4 56.8 50.7 -6
28 Czech Republic 61.7 58.3 49.7 0
29 United Arab Emirates 55.3 60.7 48.8 6
30 Ireland 67.8 51.9 48.8 0
For a full explanation of the inputs of the MotionPoint Index, please refer to this document’s Appendix.
7. 5Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Standout Markets in
This Year’s MPI
Europe and the West
From year to year, top global markets such
as the U.S., UK, Germany and France rarely
move much on the MPI Top 30 chart, and
2016 wasn’t an exception. Macroeconomic
factors—and the relative higher economic
growth seen in emerging markets—saw
mature, digitally-savvy European markets
gently dip on the MPI. However, they remain
go-to markets for expanding companies.
Smaller European markets such as Austria,
Norway and Switzerland experienced
more dramatic year-over-year slips in the
MPI rankings. (Austria and Norway dropped
6 positions in 2016; Switzerland dropped
8 positions.) Our analysis suggests this is
not due to worsening economic situations
in those countries, but rather to the wildly
improved economic performance of other
Top 30 countries.
Major Western
Economies
United States
United Kingdom
Germany
France
Macroeconomic
Environment
Regulatory
Environment
Market
Efficiency
Market
Expension
Panel
Infrastructure
Workforce
Sophistication
MotionPoint
Market
Magnitute
8. 6Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Indeed, most of the emerging markets included in our MPI Top 30 list experienced so much
growth, it was impossible for developed economies with narrow growth margins (such as
Austria, Norway and Switzerland) to keep pace.
Italy, which rose 6 positions from 2016 to 2017, was a notable exception to this trend. This
market benefited from key business-friendly governmental reforms in 2016. It’s unclear if Italy
will continue its ascent throughout 2017; this will largely hinge on the outcome of upcoming
parliamentary elections, and if the country’s progressive policies continue.
To the east, Russia is at the lowest end of a recession cycle; its currency has stabilized, and its
international influence is increasing. These factors have led to a better economic environment
(and a 2-position increase on our MPI rankings over last year), as well as a more positive
outlook for its future.
The Middle East and North Africa
The Middle East and North Africa (MENA) region experienced significant geopolitical and
economic instability in 2016, as conflicts in Libya, Syria and Yemen undermined economic
progress. The continued worldwide decline of oil prices further exacerbated the economic
situation for these historically oil-dependent economies.
2017 may prove to be a better year. MENA countries are collaborating and investing in
ways to diversify their economies. Governments are prioritizing citizens’ preference for local
jobs. Internet access is increasing, thanks to strong government investment in technological
platforms.
2017 may prove to be
a better year for MENA
countries. They are
collaborating and investing
in ways to diversify their
economies.
9. 7Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
UnitedArabEmiratesandSaudiArabia,the
region’s two most active markets, strongly
improved their regulatory environments,
market efficiencies and infrastructures
in 2016. This resulted in increases in
2017’s MPI rankings of 6 and 12 positions,
respectively.
Asia
East Asian markets such as Japan and South
Korea often rank highly in the MPI index.
This year, both markets saw minor economic
improvements (such as changes to Japan’s
regulatory environment). Further, their
consumers are increasingly interested in
purchasing foreign products online.
While Western markets are safe bets for most
expanding businesses, other Asian markets
are currently seeing the most growth.
Challenges exist in serving these markets,
however, both in their regulatory and cultural
environments. We believe local experts in
digital marketing and engagement can help
companies define effective entry strategies.
Japan and Korea
Japan
South Korea
Macroeconomic
Environment
Regulatory
Environment
Market
Efficiency
Market
Expension
Panel
Infrastructure
Workforce
Sophistication
MotionPoint
Market
Magnitute
10. 8Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
MPI Noteworthy Market: China
In recent years, China has faced lower than
expected GDP growth, but the increase in
penetration of digital technologies (both
in mobile and Information Technology in
general) has kept it growing. With a total
size of the online retail market already twice
as big as the United States’ and a 10% year-
over-year growth in retail sales, China is
expected to be the most important player
in digital retail for at least the next 10 years.
Chinahashistoricallylaggedintechnological
infrastructure. However, it has experienced
significant improvements in Internet and
digital-device adoption year after year.
Since online access and activity is strongly
skewed to mobile devices in China, foreign
businesses should consider this a mobile-
firstmarket,andoptimizeitsonlineofferings
accordingly.
Expanding companies may experience
challenges when trying to serve China’s
China
MPI Max
MPI Min
China
Macroeconomic
Environment
Regulatory
Environment
Market
Efficiency
Market
Expension
Panel
Infrastructure
Workforce
Sophistication
MotionPoint
Market
Magnitute
Expanding companies may
experience challenges
when trying to serve
China’s online consumers.
11. 9Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
online consumers. The market is known for
its difficult regulatory environment, and the
influence local conglomerates exert over
the online marketplace. (You’ll learn more
about these phenomena in chapter 6.)
Opportunities exist despite these obstacles,
however. In fact, the canny ability to
successfully navigate this unique regulatory
environment could become a business’
most important differentiator against
international competitors.
MPI Noteworthy Market: India
India now has the fastest-growing economy
on the planet; its GDP grew by 7.5% in 2016.
The country’s middle class is expanding,
with great potential for further development
in upcoming years. We believe India is the
most interesting market to watch in the
next decade.
In September 2016, India enacted tax and
regulatory changes to permit the seamless
India
MPI Max
MPI Min
India
Macroeconomic
Environment
Regulatory
Environment
Market
Efficiency
Market
Expension
Panel
Infrastructure
Workforce
Sophistication
MotionPoint
Market
Magnitute
12. 10Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
transfer of goods and services across
the country. A law preventing foreign
organizations from owning more than
50% of local retail e-commerce companies
was also abolished. This makes the Indian
market increasingly attractive, and easier to
enter, for savvy corporations.
Additional simplifications are expected,
suchastheeliminationofforeigninvestment
restrictions on multi-brand retailers. Thanks
to these and other expected regulatory
changes, India’s retail sales should reach $1
trillion by 2019. Around the same time, the
country will hit 500 million Internet users.
While English is familiar to middle-class
urban Indians, most citizens only speak and
read one of the dozens of local languages,
a linguistic reality that businesses must
address as they serve Indians online.
In September 2016, India
enacted tax and regulatory
changes to permit the
seamless transfer of
goods and services across
the country.
India
13. 11Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
The MotionPoint Index ‘Breakout
Market for 2017’
Saudi Arabia, MotionPoint’s Breakout
Market for 2017, is on the fast track to
forging an improved, diversified economy.
Thanks to a concerted government-driven
pivot, the market’s non-oil revenue is
expected to grow from $45 billion per year
to over $250 billion by 2030. The private
sector also will see significant growth; its
contribution to the GDP is expected to soon
move from 40% to 65%.
These changes, and others, suggest an
optimistic outlook for companies keen to
expand into the market. Investments in
infrastructure, logistics, high-speed Internet
and mobile penetration show no signs of
slowing. Consumers’ spending power in the
market is also rising.
To enter this market, foreign businesses
require a local sponsor of sorts—often
controlled by a family-owned holding
Saudi Arabia
MPI Max
MPI Min
Saudi Arabia
Macroeconomic
Environment
Macroeconomic
Environment
Market
Efficiency
Market
Expension
Panel
Infrastructure
Workforce
Sophistication
MotionPoint
Market
Magnitute
14. 12Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
group—which can pose challenges. However, launching online endeavors to serve Saudi
Arabia’s consumers represents the easiest way to initiate cross-border trade with lower
limitations.
Companies that successfully prepare for, and adapt to, cultural differences in this market
(which may include changes to images and copywriting, and providing localized Arabic
translations) can stand to win big here.
B R E A K O U T M A R K E T F O R 2 0 1 7
25 million residents
About 77% of the population will
have mobile phones this year
Consumers here are on
their mobile phones
6 hours a day
E-commerce retail
will grow 12.2% each year
between now and 2021
Ranks 6th
globally for luxury spending
Saudi ArabiaInternet Penetration
is rapidly growing, and will
reach 70% this year
15. 13Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
When developing this year’s MPI, our analysts examined macroeconomic trends and noted
their impact on global markets. In this section, we’ll examine the year’s most disruptive
macroeconomic shifts, and how these changes might impact businesses as they expand into
international markets in 2017.
Global Snapshot:
Impact of 2016
MacroeconomicTrends
Economic Disruptions 2016
A Closer Look
United States & United Kingdom
Unexpected political shifts
from Brexit referendum and
U.S. presidential election could
impact trade.
Latin America
Strongly impacted by the end
of the commodity super-cycle.
Export values plummeted,
which left Brazil, Colombia and
other markets reeling.
Middle East + North Africa
Military conflicts and
geopolitical and economic
instability rocked the region.
Fluctuating energy prices also
affected local economies.
China
Began the year facing a stock
exchange crisis, resulting in
lower than expected GDP
growth. Neighboring countries
were also affected.
16. 14Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
There’s no sugar-coating it: 2016 was a year of turmoil, and lower than expected economic
growth. Despite the strong performance of many emerging economies, at press time, the
global growth for 2016 was projected to be less than 2.5%. This remains unchanged from the
disappointing pace of 2015, and below most early 2016 forecasts.
What happened? Continuous volatility and uncertainty slowed the growth of the global
economy, as did other key factors :
• Geopolitical turmoil
• Low commodity prices
• Increasing variance in exchange rates and capital flows
• Decreasing productivity growth
• Stagnant investments
Since the world’s economies emerged from the global financial crisis of 2008, several signals
showed a trend towards an increased closing of international markets. Key contributing
factors included suspicion towards foreign firms and brands, export taxes and quotas, and
anti-market subsidies.
17. 15Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Despite 2016 not being a satisfying year
for the world economy, the digital space
is still booming and constantly reshaping.
Nearly half of the world population now
has an Internet connection. Half a dozen
social networks can claim over 500 million
customers each (with Facebook at the top
of the ranking with over 1.7 billion). There
are almost 4 billion active mobile devices
worldwide.
The importance of e-commerce continues
to increase at an unimaginable pace: 40%
of Internet users—more than 1 billion
people—have made purchases online
at least once. By the end of 2016, online
commerce accounted for more than 10%
of all retail sales.
For instance, this digital world is becoming
increasingly interconnected with everyday
offline experiences. Forty percent of global
consumers use at least three channels—
such as a social network, a conventional
website and a smartphone app—to inform
their buying decisions.
40% of Internet users
—more than 1 billion
people—have made
purchases online at least
once.
18. 16Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Mobile-First Global
Consumers, and Their
Impact on Search
This is the first of several chapters that will deep-dive into specific trends that impacted businesses
in 2016, and will create ripples that companies must contend with for years to come.
The argument about mobile’s game-changing relevance is over: Smartphones are now the
preferred online-connected device for most consumers around the world, period. What’s
less appreciated by many corporations, however, is that smartphones are fast becoming the
only device global consumers have for researching and buying products.
Major global search engines—from Google to Yandex—have already embraced the reality of
a mobile-first world, and with good reason. By 2018, four of the top five global smartphone
markets will be represented by emerging markets: China, India, Russia and Indonesia.
Smartphone adoption rates are positively stratospheric in many Asian markets. In Vietnam
alone, nine in 10 adults now own a smartphone.
To adapt to this mobile-first reality, search engines are throwing away old approaches
and putting mobile search front-and-center. This movement began in 2015, when Google
introduced “mobile friendliness” as a signal for its ranking algorithms. Its Mobile Friendly
Update ensured that mobile-friendly sites were preferentially ranked over desktop sites in
mobile searches.
This update was followed in March 2016 by the release of new mobile-friendly tools to support
developers. More changes have come since then.
Our analysis indicates companies that ignore this evolution stand to lose traffic, conversions
and revenue—particularly in global markets.
19. 17Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
An Industry-Wide Pivot
In May 2016, Google announced that
users conducting mobile-based searches
would receive different results from those
seen by desktop users. In November, a
more disruptive change debuted: Google
announced its algorithm would indeed
become mobile-first.
As of press time, Google will soon rank
websites primarily on the experience they
deliver mobile users—regardless if web
searches originate from desktop PCs or
mobile devices. When Google’s engine
now crawls a website, it will do so as if it
were a smartphone. If a site’s content isn’t
easily accessible from a mobile device, its
authority will be negatively affected.
Put another way, Google is rewarding
content creators that publish mobile sites
(or mobile-friendly sites), and punishing
those that do not. Brands are taking the
hint.
Introduces
“mobile friend-
liness”
Releases new
mobile-friendly
tools to support
developers
Announces its
algorithm would
become
mobile-first
Google and other
search engines will
soon rank websites
primarily on the
experience they
deliver mobile
users
2015
March
2016
May
2016
Today
Google announced that
users conducting
mobile-based searches
would receive different
results from those seen
by desktop users.
20. 18Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
The phenomenon isn’t exclusive to Google.
Bing, which was considering mobile-
ranking factors back in 2014, announced
in May a lighter version of a mobile-friendly
algorithm. It provided developer tools to
support it.
Search engines around the world are
changing their algorithms, too. With its “Ice
Bucket” algorithm update in 2014, Chinese
search giant Baidu was the first search
engine company to realize the opportunity
of mobile. In February 2016, Russian
company Yandex launched its own efforts
to prioritize mobile-friendly pages in search
results. Others are following suit.
The Mobile-First Impact
When Google’s Mobile Friendly Update
debuted in 2015, MotionPoint analyzed
the performance of 40 translated websites
serving more than a dozen international
markets. A half-dozen industries were
represented in the study.
Mobile Is the
New Normal
Global smartphone adoption has
left traditional computers, and the
conventional web, in the dust. More than 2
billion people, representing over half of all
global Internet-connected users, now own
smartphones and use them to go online.
Mobile-based spending is
surging, too. More than
a third of all e-commerce
transactions now hail
from mobile devices. This year, global
m-commerce sales will reach $669 billion,
a 22% increase over 2016’s revenue of
$549 billion. By 2020, nearly half of all
e-commerce will in fact be m-commerce.
The relevance of mobile varies across
global regions. In Western markets,
desktop PCs are well-represented in
digital shopping, due to their historical
penetration. However, consumers in many
developing markets use smartphones as
their exclusive connection to the Internet.
This largely is due to limited access to fixed
broadband.
21. 19Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Global-market sites that didn’t implement
Google’s mobile-friendly recommendations
were clobbered in the update’s aftermath,
we found. Their mobile impressions
dropped an average of 36%. (This hit
was worse than what many high-profile
U.S. sites such as Reddit and NBC Sports
experienced, both of which saw mobile-
traffic drops of over 25%.)
In contrast, global sites that complied
with Google’s recommendations saw a
40% increase in mobile impressions post-
update.
Based on recent MotionPoint research,
we expect similar results to follow the
introduction of Google’s newest mobile-
first algorithm. It will impact overall organic
traffic,however,notjustmobileimpressions.
Indeed, our research examined the early
effects of Google’s 2016 pivot. After
analyzing traffic data for several large
websites in key industries, it was clear
that sites with strong mobile experiences
Global-market sites
that didn’t implement
Google’s mobile-friendly
recommendations were
clobbered in the update’s
aftermath, we found.
Revisiting Last Year’s
Trendbook Predictions
In last year’s edition of Trendbook,
MotionPoint examined emerging global
trends and identified three key phenomena
that businesses should watch, and adapt to,
in 2016. We claimed:
Global smartphone adoption would
continue to skyrocket, becoming
increasingly central to users’ digital
experiences. Smartphone penetration
in developing markets would catch up
with, and in some cases eclipse, that of
mature markets, we said.
Social media platforms would
integrate more tightly with online
consumers’ shopping experiences,
fueled mostly by competition
between global and local social
networks.
Incorporating locally-preferred
payment methods and shipping
options for global consumers would
pose challenges to companies as they
expanded internationally, online.
In light of how 2016 unfolded, how did
MotionPoint’s predictions fare? Quite well,
it seems. These trends didn’t just make an
impact on the digital world in 2016—they
became strongly intertwined, as we see in
this year’s Trendbook.
22. 20Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
saw their positions in search results wildly
improve. Sites that were not mobile-
ready saw the opposite effect, dropping
precipitously in search results.
While the most important signals to
generate website authority will always be
relevant content and structure, it’s clear
that adapting to the mobile-first future is
key to avoid losing search-rank authority to
the competition.
Future-Friendly Best Practices
For companies serving online customers
at home and overseas, the obvious next
step is to provide them with mobile-first,
or mobile-friendly, experiences. (Ensuring
those experiences are available in the
consumers’ languages of choice is also
important.) However, other next steps are
more subtle.
For instance, speedy load times are critical
for mobile users—especially in emerging
Mobile’s Unique Role
At first glance, mobile-based
transactions don’t appear to move the
needle for most e-retailers. Conversion
rates are generally low, revenues often
represent less than 25% of an e-retailer’s
total revenue, and average order values
are around 40% lower than conventional
e-commerce.
Nonetheless, m-commerce represents
a growing segment for e-retailers.
Mobile-based year-over-year revenue
growth is 60% higher than desktop-
based growth. Mobile also plays a key
role in the consumer journey, through
pre-purchase research conducted via
smartphones or tablets.
For non-transactional
websites, mobile’s
importance is even greater.
In these cases—in which
conversions are a secondary goal to
providing high-quality information—
mobile is king, especially for B2C
businesses.
23. 21Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
markets where data bandwidth caps may be lower, and network speeds are slower. Amazon
studies suggest conversions drop by 7% for every additional second in load time. (In contrast,
a Walmart study estimates a 1% growth in revenue for every 100-milisecond increase in
efficiency.) Using a content delivery network (CDN) can go a long way to mitigating this risk.
Further best practices include:
Streamline the checkout process. Remove unnecessary steps from the process to keep
customers focused on the transaction and ensure frictionless conversions. Further, make
sure to support commonly-used payment methods. This is particularly important in global
markets, as they use different platforms (such as Alipay or WeChat Pay in China).
Capture the “micro-moment.” Mobile visitors tend to use their devices in more specific
contexts than desktop users, such as reading reviews or product specifications. Google
defines these instances as “micro-moments.” Here, the customer is more interested and
willing to react to certain content. Identify and utilize these moments to guide the buyers’
journey toward conversion.
Maximize and localize structured data. Structured data such as organizational schema
(which provides search engines with a company’s name, address, hours of operation, etc.)
is not visible to customers, but helps search engines identify businesses or websites. For
mobile search, they acquire even more importance by helping search engines generate the
“rich card” elements seen on result pages. These elements are more prominent in mobile
search results. They also establish a website’s location, increasing its chances of ranking in
local searches—which are often conducted from mobile devices.
Mobile visitors tend to
use their devices in more
specific contexts than
desktop users, such
as reading reviews or
product specifications.
24. 22Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Optimize your international mobile keyword strategy. As a general rule, search terms
entered through mobile devices tend to be shorter and less formal than keywords used
in desktop PC searches. For international markets, linguistic and cultural differences may
impact mobile and desktop search keywords differently, so a review of local keyword strategy
is needed.
Consider local specificities. Every international market has a different transactional
relationship with mobile devices. For example, in Italy, desktop PCs are used for nearly all
transactions, while mobile is used for pre-purchase research. In Korea, however, mobile is the
primary way to access the web as well as transact, leading to a narrower gap in conversions.
Be sure to research the mobile behavior in your international markets, and design for those
consumers’ unique needs.
25. 23Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Evolving E-Commerce
Regulations in the EU
The European Commission recently issued a proposal to expand the European Union’s
“Single Market” approach to commerce into the online realm. These recommended regulation
changes, which will almost certainly be approved in 2017 by the European Parliament and
Council, present unique challenges for businesses serving online EU markets.
According to the Commission, which is the executive body of the EU, the Single Market is the
EU’s greatest achievement. “It has fueled economic growth, and made the everyday life of
European businesses and consumers easier,” Commission reports say.
By extending this philosophy to cross-border online commerce, the proposed Digital Single
Market would better empower online consumers, and ensure the free movement of goods
and services. But doing so would require the elimination of certain online practices that
European companies have had in place for decades.
The Commission’s proposal would disrupt the status quo by revising policies on three key
fronts:
• Geo-blocking prevention: Companies would abandon the practice of banning
consumer access to specific local versions of their websites, based on the
consumer’s geographic location
• Parcel delivery optimization: Companies would harmonize fulfillment options with
the aim of decreasing and standardizing shipping costs
• Payment discrimination prevention: If an online payment method is offered to
consumers in one EU market, companies must make it available in every other EU
market
26. 24Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
EU-Centric, Global in Impact
At first glance, the proposed regulations appear to be a burden only European companies
must bear. Its impact, however, will be felt worldwide. Every international company that sells
online to a European market will be affected, since the regulation implies that EU citizens
based in any member state should be able to access such websites and benefit from parcel
and payment standardization.
What’s Covered in the Proposed Regulation?
• Dry Goods
• Electronically-Delivered Services
• Services for Physical Locations
What’s not included:
Copyrighted Materials (these are subject to another proposal)
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For companies presently serving EU markets online—or companies that have ambitions to do
so within the next year—gaining a clearer understanding of the proposed regulatory changes,
and how they will impact their global business, should become an immediate priority.
Here’s a high-level explanation of what drove EU regulators to propose the changes, and
what’s at stake for businesses serving the region.
A Response to Consumer Dissent
According to a 2015 survey conducted by the Commission, more than 90% of EU consumers
believe geo-blocking and other geographic-based restrictions are anti-consumer in nature,
and undermine single market, cross-border e-commerce. Eight in ten EU consumers have
experienced geo-blocking personally, and nearly all of those consumers support legislation
to ban its “unjustified” use.
A ‘Single Digital Market’ Can Generate EU Growth
Surveys Suggest:
25%
Believe cross-border
e-commerce would
grow by 25% or more60%
Companies that be-
lieve sales would
increase with EU-wide
standardization
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EU businesses are aware of this consumer
sentiment. According to the survey,
business respondents said they agreed,
in principle, to the notion that consumers
living in one EU member state shouldn’t be
denied access to offers available to those
living in another member state.
The potential business impact is
compelling. Nearly 70% of EU-based
Internet users now shop online. In 2014,
online commerce in the EU was worth
€368 billion. And while EU e-commerce will
grow by around 14% by 2018, cross-border
revenue will surge by 40% during the same
period—a projection that doesn’t factor
the successful passing of the Commission’s
proposal. The regulatory changes will likely
drive that growth even higher.
Unbuilding the Wall
So with consumers advocating for change
and companies apparently sympathetic to
their plight, why do practices such as geo-
blocking remain common in Europe?
Geo-Blocking,
Demystified
Why do EU retailers use geo-blocking on
their websites, even when their customers
believe it to be an anti-consumer practice?
Here’s a scenario to help explain the
phenomenon:
Let’s say a retailer offers a particular
product on its Dutch e-commerce site for
€50. And now let’s say the same retailer
offers the same product for €30 on its
website serving Poland. The price is lower
due to several economic factors.
Dutch customers understandably want to
save money and buy from the Polish site.
But if that happens, the retailer will lose
€20 on each Dutch sale.
Hence, the perceived need for geo-
blocking. Even when Dutch customers try
to access the Polish site directly, they will
be sent to the retailer’s Dutch site via a
“hard redirect,” sometimes called a “force
redirect.” Profits are preserved.
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When most European companies serve multiple EU markets, they often apply price
discrimination or provide different product assortments for each market. Businesses consider
this in their best interests, as it helps them generate the maximum possible margins within
their respective markets.
The most common way to prevent consumers from buying products and services in other
countries, where they might have lower prices, is through geo-blocking. This practice limits
access to local versions of websites, based on a user’s geographic location.
More than 60% of EU-based retail websites geo-block customers, the Commission’s survey
found. Nearly half of those sites provided no upfront information about the companies’
delivery restrictions, or other geo-based restrictions.
Under the proposed European Commission regulation, geo-blocking—sometimes known as
“force-redirection”—would no longer be allowed.
Parcels and Payments
Geo-blocking isn’t the only practice now on the chopping block. The Commission is also
aiming to bring unity to the fulfillment process. Its proposed regulations intend to prevent
discrimination on the basis of nationality, or place of residence. While the revised policy won’t
force companies to deliver across the European Union, it will require them to accept orders
from customers based in any member state, as long as those customers are willing to arrange
their own shipment.
The most common way
to prevent consumers
from buying products and
services in other countries,
where they might have
lower prices, is through
geo-blocking.
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It also intends to level the playing field for digital payment platforms. The Commission is
advocating that retailers support the same payment options across all EU markets.
While this doesn’t mean that every digital payment method must be accepted by all retailers,
it would require companies to extend the payment platforms they currently support to all EU
states. For instance, if a company’s e-commerce site accepts Cash On Delivery in Germany, it
would be required to accept it from customers based in other EU member states, too.
Adaptation Is Necessary
For companies serving EU markets online, or aiming to do so in the near future, action will be
required to adapt to these proposed changes. Eliminating location-based restrictions such
as geo-blocking is a proactive start, though businesses can still apply practices to maintain
control over their local-market pricing.
As previously described, under the proposed European Commission regulations, companies
must lift geo-blocking and permit EU customers to access—and purchase from—any
local-market version of the company website they wish. (For instance: A retailer’s German
consumers will be able to visit its website serving the French market.) These local-market
sites may have different products and prices.
However, this doesn’t prevent businesses from urging EU consumers to experience the
optimal version of their websites. Characteristics of an optimal website might include on-site
content presented in the consumer’s preferred language, or products that are most relevant
31. 29Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
to the consumer (based on factors such as
seasonality, local holidays or local shopping
preferences).
By offering consumers the option, rather
than a mandate, to visit this optimal
website—which is localized for the
consumer’s home market—companies can:
• Elegantly sidestep the practice of
geo-blocking
• Give consumers a choice in which
local-market site they visit
• Proactively present consumers
with the most relevant shopping
experience, based in their home
market
This way, companies can still apply price-
discrimination and differentiated offering
across countries. What they cannot do is
prevent a visitor from visiting a version of
the site serving a neighboring market. This
will incentivize businesses to find other ways
to attract, rather than force, a customer to
their in-country sites.
Solutions to Make EU
Sites Regulation-Ready
Easylink Management
MotionPoint’s EasyLink Management
improves a global website’s performance
by unobtrusively welcoming first-time
visitors in the language they are most
likely to speak. This directs consumers to
opt into their optimal website experience,
rather than forcing them to a website via
geo-blocking.
EasyLink often boosts traffic to local
websites by over 80%, and increases
conversion rates by 16%.
continued
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Companies can achieve this consumer-
friendly and profit-maximizing shopping
experience through several key initiatives:
Offering market-specific versions
of their websites in locally-preferred
languages to boost traffic (when
searching online in their own
language, customers will be shown
the local version of a website),
engagement and conversions
Optimizing the user experience
on the consumer’s home-market
website, to incentivize customers to
remain on-site. This can be achieved
through localized campaigns, content,
inventory, and more
Driving organic traffic to the
appropriate country website,
through translated URLs, translated
site maps, and the proper linguistic
“hreflang” tagging for search engines
URL Optimization Management
This MotionPoint technology improves
a global website’s SEO by presenting the
site’s URLs in locally-preferred languages,
helping pages rank much higher in local
search results. This directs consumers to
optimal website experiences via organic
search.
Some MotionPoint customers have seen
their global site’s organic traffic double,
thanks to this technology.
Global Sitemap Management
When international customers search
on local search engines, MotionPoint’s
Global Sitemap Management ensures the
right translated version of a company’s
global website appears in those results.
Again, this helps direct shoppers to their
most relevant shopping experience, and
discourages visits to less relevant sites
serving other EU markets.
Websites using Global Sitemap
Management often benefit from wildly
improved international SEO.
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Providing “soft redirection” opportunities to direct customers to the appropriate local
website (rather than the alienating hard redirects currently in use)
Solutions for addressing the Commission’s proposed regulations for parcels and payments
are even more straightforward.
While the regulation intends to promote e-commerce cross-border shipping, it does not
force companies to ship products to any location in the EU. The regulation requires companies
to sell equally to any EU citizen, and allow customers to organize their own delivery. Indeed,
research suggests one-third of online EU customers are willing to collect their purchased
goods—or have them delivered—within the country of the retailer.
We expect this to create a new market segment of delivery services. Companies should review
their logistical partnerships to ensure efficient deliveries, accommodate the legislation and
avoid competition with independent cross-border shippers.
Thanks to a robust choice of existing solutions, supporting payment platforms across EU
markets shouldn’t pose a great challenge for most online businesses, either. EU-based
companies should prepare for the regulatory changes by standardizing payment methods
across all markets.
However, we do recommend providing more on-site visibility to some payment platforms
over others, depending on the local market’s payment preferences. This will maximize trust
among local consumers.
The regulation requires
companies to sell
equally to any EU citizen,
and allow customers
to organize their own
delivery.
34. 32Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
E-Commerce Disruption:
Virtual Marketplaces and
Offsite Social Commerce
Retailers leverage these tactics (and more):
85% of consumers use several channels
during the shopping experience:
AWARENESS CONSIDERATION PURCHASE
PHONE EMAIL TABLET TWEET PC
“Pick up where
you left off”
1-Click
Buy
Recently Viewed
Products
“You left an item
in your cart”
Much to the surprise of many retailers, online shopping has become a highly fluid and
fragmented experience in recent years.
Retailers have smartly adapted by providing shopping experiences that deliver connection
and consistency across these disparate channels. But many companies are now learning this
isn’t enough to keep up with tech-savvy, mobile-first consumers. Businesses are increasingly
leveraging disruptive external sales channels provided by low-cost, innovative third parties.
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Indeed, within the dynamic context of the web—in which a consistent portion of traffic is
driven by searches for a product rather than a brand—major retailers and brands are directing
their focus to two key external sources of traffic and conversions: virtual marketplaces and
offsite social commerce.
Ifcompaniesdon’tadapttothesechanges,ouranalysissuggeststheystandtolosecustomers,
market share and revenue.
How Virtual Marketplaces are Changing Global E-Commerce
When it comes to digital shopping, many Western consumers cut their teeth transacting
on traditional e-commerce websites. Brands leveraged their prestige sites as revenue
generators by hosting their own e-stores. Meanwhile, multi-brand retailers competed on
selection and price.
But this isn’t the case in emerging global markets, where virtual marketplaces—also called
virtual malls—reign supreme. In these markets, brands and retailers often fare better within
massive e-commerce marketplaces, not with stand-alone websites.
Virtual marketplaces aren’t a new concept; eBay has been connecting businesses to
consumers for over 20 years. Looking beyond U.S.-based companies, Japan’s largest
e-commerce website is marketplace Rakuten, founded in 1997. Ninety percent of the
country’s Internet users have registered accounts there.
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But what is new and disruptive is the explosive growth these marketplaces are now
experiencing. B2B marketplaces like France’s Agopoly are taking off, but B2C marketplaces—
particularly in emerging markets—is where the real action is.
Why do Virtual Markets Reign Supreme?
Customer trust is much higher for virtual markets, especially in emerging markets
Price comparison features bring transparency to the shopping experience
They are “go to” sites for product research in some markets, replacing traditional search engines
Research indicates that by 2020, virtual marketplaces will represent nearly 40% of the global
online retail market. Alibaba-owned Tmall is a stellar example; the Chinese marketplace (and
world’s largest marketplace) generated $191 billion in sales in 2015. Recently, the gross
merchandise volume of three key marketplaces—Tmall, Amazon and eBay—were worth as
much as the GDP of Finland. And since marketplaces often leverage IT and big data more
effectively than conventional e-retailers, more relevant shopping experiences are often
created for customers … which leads to more conversions.
These Ecosytem Prove Profitable for Most Brands. Why?
Competition is robust
The marketplace provider can manage inventory and fulfillment
Product descriptions can be easily managed through integrations
Certification through a marketplace can reduce counterfeit sales
37. 35Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Let’s take a closer look at a few interesting global markets, and their marketplaces.
China
Thanks to China’s economic growth, globalization, growing middle class and rapid digital
adoption, its e-commerce is now among the fastest-growing in the world. Valued at $590
billion in 2015, it’s also the world’s largest. In comparison, the United States generated $340
billion, or about 40% less, during the same year.
Most online B2C commerce here is facilitated by virtual marketplaces operated by two
companies: Alibaba and JD. Alibaba’s Tmall has a market share of nearly 55%; JD’s marketplace
accounts for another 25%. Other local virtual marketplaces exist, often serving product
niches. It’s a crowded space, and there’s little room—and frankly, little local consumer
interest—for localized branded e-commerce websites.
Additional factors drive Western brands to Chinese virtual marketplaces. Managing a local
website in China is difficult due to bureaucratic and logistical difficulties, particularly for
foreign businesses. Also, if a brand doesn’t have a brick-and-mortar presence in China,
it’s far more difficult to attract consumers to a localized company-owned website. Alibaba
exerts great political influence in the market, too, making virtual marketplaces a path of least
resistance for foreign merchants.
Actionable Insights: International brands can win in the short term by translating their
product feeds for Chinese marketplaces, which can be syndicated via integrations. After
establishing a strong in-market brand presence, they can then deploy a localized branded
website to serve long-term goals. (These sites should be registered with Chinese search
giant Baidu to combat counterfeit products, a pervasive problem in the region.)
International brands
can win in the short
term by translating their
product feeds for Chinese
marketplaces, which
can be syndicated via
integrations.
38. 36Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
South Korea
From a marketing and infrastructural perspective, South Korea is a different animal. Internet
penetration and efficiency is higher here than in the Western world, and local search engines
play a particularly powerful role in South Korean e-commerce.
Take Naver, the market’s most-used search engine. It’s an aggregator of content, but also
provides consumers with a blogging platform, a virtual marketplace, payment methods and
more. In an experience similar to Google Shopping, products often display on organic search
result pages—all with an option to purchase, and directly pay, through Naver. Traditional
e-commerce is effectively sidestepped.
Actionable Insight: To succeed in South Korea, Western brands must strongly cooperate
with Naver to become a part of its ecosystem. They must also adapt their products—or at
least the presentation of those products—to local tastes. For instance, Koreans respond far
more positively to product photos featuring Korean apparel models over Western models.
Another influential player in this market is Kakao, a popular mobile communication platform.
The company recently launched its own shopping experience, empowering users to shop
and send gifts to friends using its social platform. It leverages the Kakao Wallet payment
system.
The Middle East and North Africa
In most Middle Eastern markets, virtual marketplaces represent a compelling expansion
39. 37Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
opportunity for foreign brands. However, as in China, legislation makes it challenging to
serve the region. Savvy Western companies are serving consumers via marketplaces such
as Souq.
Souq is often called “the Amazon of the Middle East,” and is the largest e-commerce platform
in the Arab world. The region is poised for astonishing e-commerce growth in the near
future; studies suggest a 30% year-over-year top-line growth is already happening in some
markets, and companies like Souq are primed to tap into it.
Investors are certainly interested. Souq—which serves the UAE, Egypt, Saudi Arabia and
other markets with localized portals—closed a funding round of more than $275 million
in February 2016. Analysts estimate it now has a valuation of over $1 billion. In 2013, over
20% of UAE online consumers shopped at Souq. That number has grown considerably since
then.
Similar growth and investments are also underway in markets such as India, where Flipkart,
Snapdeal and other marketplaces are taking center stage.
Offsite Social Commerce: Omnipresent Shopping Experiences
It’s also clear that social media will become a viable retail channel in 2017. South Korea social
network Kakao’s ambitions to deliver social-based shopping experiences are evidence of that.
Indeed, a recent surge in e-commerce functionality across key social networks illustrates a
growing opportunity for companies to use social in ways that transcend marketing, and
focus on transactions and revenue generation.
Souq is often called “the
Amazon of the Middle
East,” and is the largest
e-commerce platform in
the Arab world.
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The latest disruption in this space is offsite
social commerce, in which brands and
businesses sell their products directly via
social networks.
Social networks are now providing
streamlined, one-click buying experiences
for their users. Such “Buy” buttons are
being integrated in Western-based social
platforms such as Facebook, Twitter,
Instagram and Pinterest, and in Eastern-
based social and messaging apps such as
WeChat.Suchintegrationskeepuserswithin
their favorite social environments (without
wittingly engaging in the act of shopping),
radically shorten the buying process, and
provide actionable data to retailers (such
as conversion and engagement metrics,
“Likes,” comments and more).
It’s a smart play. Studies suggest 60% of
consumers are open to making purchases
through social networks. Social commerce
revenue increased by 50% between 2014
and 2015. In fact, social commerce already
Users often view products
more favorably when they
can see comments or
interactions from friends
and loved ones.
41. 39Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
accounts for 30% of digital sales in Southeast Asia.
These offsite social commerce experiences also leverage consumers’ emotions in ways
conventional e-commerce experiences cannot. Users often view products more favorably
when they can see comments or interactions from friends and loved ones. Studies suggest
such endorsements increase the likelihood of a sale by 20%. The value of word-of-mouth
marketing is further enhanced, since the shareable social content includes calls to action to
purchase.
We expect this evolution to thrive in 2017 and beyond. Video-based “Buy” buttons, and other
more interactive calls to action, will very likely see widespread adoption in upcoming years.
Capturing the Opportunity
Virtual marketplaces and offsite social commerce will achieve widespread adoption in
2017, but how can retailers and brands economically and efficiently seize the opportunity
in markets at home and abroad?
Thanks to generally straightforward data integration processes among domestic and
international virtual marketplaces, companies often need only register as merchants
and provide product inventory and descriptions to the marketplaces (often via an API
or connector). This data must naturally be structured properly to play nicely with the
marketplaces’ standards.
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However, to effectively serve virtual malls in global markets, companies must translate and
localize these product feeds into locally-preferred languages. This requires an integrated
translation memory (a database of translated words and phrases), and a translation
platform to simplify initial deployment and ongoing operations. Such platforms should also
accommodate local-market content localizations, such as using product photography that
reflects a local culture’s preferences or social norms, if appropriate.
Offsite social commerce endeavors often require similar implementations. Social platforms
usually provide two methods for brands and businesses to integrate with them. Merchants
can directly create their storefront in the network’s commerce platform and manually add
content to sell. However, companies can also—with a help of a third-party integration tool—
push product information as a feed to the social platforms.
Delivering linguistically- and culturally-relevant content to these social shoppers can also
be handled through a translation and localization platform, with integrations to the social
network as needed.
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Shockwaves of 2016
While the trends we’ve examined so far have a measurable impact on online business, we
observed several radical micro-trends emerge in 2016 that have the power to shape the
world far beyond business.
Companies should take heed of these emergent threats to online communication and
stability, and proactively address any gaps in their processes and crisis plans:
Brexit, Election 2016 and Growing Nationalism
In 2016, several nations witnessed the rise of political movements with strong nationalist
elements. In key markets, these movements achieved decisive political victories—such as
the U.S. election of billionaire Donald J. Trump (whose declared approach to foreign policy is
strongly oriented to nationalism) and the outcome of the UK’s Brexit vote (which jeopardizes
the concept of the European Union’s effectiveness).
This nationalistic trend will likely continue throughout 2017, as many elections in European
countries are forecasted to be won by nationalist or isolationist parties, including the 5 Star
Movement in Italy, the Front National in France, the Party for Freedom in the Netherlands
and others.
Such victories will very likely impact digital commerce in 2017 and beyond. Increased political
isolationism is often connected to suspicious attitudes towards international trade and
foreign companies. Increased barriers, quotas and tariffs will likely be implemented in key
markets in 2017; companies that conduct cross-border business must prepare for this.
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Furthermore, some governments may make things more difficult for foreign companies to
operate locally. We currently see this in China, where bureaucratic red tape can encourage
foreign brands to conduct business through local conglomerate Alibaba, rather than launch
their own in-market, branded websites.
Finally, MotionPoint has already observed the effects of Brexit among its clientele; revenues
have been strongly impacted beyond the UK, due to the lower value of the pound.
Actionable Insights: Companies can proactively adapt to this trend by increasing their
brand visibility in key global markets. Offering digital experiences that are familiar to local
consumers—in terms of customer service policies, languages, payment options and more—
often increases the esteem of a brand in local markets. Complementing such efforts with
in-market campaigns can boost trust among local consumers, and detach a brand from a
specific national identity.
Companies should also brace for regulatory changesin global markets.Currently, e-commerce
websites often sidestep the limits such changes place on brick-and-mortar retailers. However,
if more markets decide to follow the example of isolationist Turkey, for instance, online
business may be affected.
Cybersecurity and Privacy
In 2016, the actions of computer hackers brought the Internet (and online commerce) to its
knees in some markets. They also quite possibly affected the outcome of national elections,
andcompromisedtheonlineidentitiesofmillionsofconsumers.Expectevenmoredisruptions
in 2017.
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Beyond the threat of hackers, companies are facing increasing pressure from foreign
governments to store customer information on servers based within their countries’ borders.
This raises privacy concerns. Governments often claim these policies are meant to streamline
government compliance checks and generate tax revenue, but critics believe consumers
are placed at risk, as this locally-stored data could be compromised and used to identify
residents who are critical of these governments’ administrations. In May, PayPal Holdings Inc.
suspended its operations in Turkey for this very reason.
Actionable Insights: Cybersecurity diligence is more important than ever. It’s critical to
understand the policies specific to data management, particularly in global markets. Use the
most secure technologies and services.
Russian Hackers
affected U.S. election outcome,
some intelligence officials say
Data Stolen From
Billions of user account info
compromised in August
Shared or sold in online forums*
DDOS Attacks
paralyzed U.S. east cost
websites in October
*Data was stolen prior to 2016
46. 44Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
When serving international markets online, proxy-based website translation supported by
a content delivery network (CDN) balances security and compliance concerns while being
mindful of a company’s needs associated with expansion. Data is maintained in a centralized
server; transactions aren’t processed locally, and no sensitive information is stored.
Conducting Business In a ‘Post-Truth’ World
The notion of politicians, governments and businesses fabricating information for gain is
certainly not new. However, 2016 witnessed radical changes in how people share information
online, and how half-baked (or downright false) news stories can disrupt political processes
in First World countries.
Such “post truth” content—content crafted to appeal to emotion, skewed to a particular point
of view, and often disconnected from facts—became particularly pervasive in 2016 during
the UK’s Brexit referendum and U.S. presidential election. Unscrupulous content creators
flooded key online channels with disruptive fake news and propaganda.
In late 2016, search engines and social networks vowed to change how this content is ranked
and shared. However, many businesses remain vulnerable to this dangerous trend, and aren’t
yet considering how a single fabricated rumor can disrupt the success of their company—or
the destiny of entire industries.
Actionable Insights: Now more than ever, global companies must be mindful of how
their brands are perceived in international markets. A scandal based on a rumor, a
misunderstanding—or even simply an improper communication—can alienate local
consumers, and quickly spread to become an issue global in scope.
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Content in international markets must be curated with great attention, and be as clear as
possible. Options exist to minimize risk online: companies can tightly manage messaging from
a central website (with international sites featuring identical messaging in local languages),
or agencies in local markets can use their cultural fluency to ensure content is authentic and
on-message.
In today’s viral-content post-truth world, global companies should have the capability to
address a public relations issue in a matter of hours, not days. Only the speedy deployment
of multilingual digital content—via websites, social networks and institutional channels—can
ensure a prompt response. Without such a solution in place, the opportunity for fake news
to disrupt a brand’s reputation is very real, and increasingly likely.
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Looking Ahead
Few economists deny that 2016 was a tumultuous year for the global economy, with several
factors generating lower than expected growth, particularly in the Western hemisphere. The
outlook for 2017 is equally uncertain, but promising business opportunities are emerging,
such as Asian and Middle Eastern markets becoming more open to foreign companies, and
providing more favorable business environments.
In the online and digital spaces, however, trends from previous years have increased in speed,
scope and influence.
Many of these trends impact different global markets in different ways. Variants in
omnichannel approaches—such as leveraging mobile experiences, virtual marketplaces and
other external channels—are redefining how companies conduct business in global online
markets. Expected regulatory changes in the EU will force e-commerce players to adapt;
those that don’t will likely lose market share.
Indeed, with the increased relevance of digital, expanding companies must increase their
cultural and economic fluency of global markets now more than ever.
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Appendix
The MotionPoint Index™ (MPI) ranks countries based on their growth potential on a 0-100
scale—the higher the ranking, the more the country should be considered in a company’s
online expansion plans.
This year’s MPI was updated with a new calculation method, based on 60 different data
points (compared to 17 in previous years). This allowed MotionPoint analysts to focus on
economic aspects that were most relevant for our intent, namely international and online
opportunities.
The MotionPoint Index includes exclusive aggregate MotionPoint data, and statistical data
from internationally recognized organizations, notably the United Nations, the International
Monetary Fund, and specialized agencies such as UNESCO..
The indicators in our Index are grouped into seven sub-indexes, as seen in the chart presented
at the end of this Appendix:
Macroeconomic Environment: The stability of a market’s macroeconomic
environment is critical for business, and contributes to its overall competitiveness. It
is measured with factors such as GDP growth, consumption, country risk premium,
debt, inflation and country competitiveness.
Regulatory Environment: The legal and administrative framework within how
individuals , firms and governments interact has a strong bearing on competitiveness
and growth. It is measured with factors such as corruptness, legal rights, investor
protection and others.
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Market Efficiency: Countries with efficient goods markets are well positioned to
produce and consume the right mix of products and services, given their particular
supply-and-demand conditions. They also ensure these goods can be effectively
traded. Market Efficiency is measured with factors as competitiveness, import
percentages, procedures to start a business, taxation and others.
Market Expansion Panel: MotionPoint’s experts were surveyed to capture their
insights on upcoming trends and changes in international markets and to gauge
which markets have the strongest potential to succeed for companies expanding
their digital efforts in 2017.
Infrastructure: A solid and extensive telecommunications network (for both mobile
and cable) allows for a rapid and free flow of information. Effective international and
local flow of goods via parcel services ensures reliable delivery. This is measured with
factors such as Internet and mobile penetration rates, bandwidth, affordability of
Internet and mobile access, logistics performance and others.
Workforce Sophistication: An educated workforce is vital to a country’s internal
demand, and thus to the structure of its market. The education level of the country’s
population and the participation rate of its female population are examined to
assess this.
Opportunity Size: Large markets allow organizations to exploit economies of scale.
MotionPoint’s proprietary user engagement metrics were used to approximate
the markets’ sizes. Traffic metrics were then combined with the overall economic
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performance of MotionPoint’s clients in key global markets. Finally, revenue figures
were adjusted with currency forecasts.
After structuring the Index, some countries were eliminated from the analysis in order to
increase the accuracy and accountability of the Index based on the following criteria:
Political Stability: Countries with situations that prohibit reasonable international
commerce were excluded. The cut was based on the countries below the 20th
percentile on the World Bank’s Political Stability and Absence of Violence/Terrorism
Index. Exceptions were made for markets that had compelling attractiveness that
would warrant their inclusion regardless. Examples include Russia, Israel, Thailand,
Turkey and the Ukraine.
Population: We excluded countries with a population small enough to reduce the
investment attractiveness of entering the market for most reasonable businesses.
This cut was less than approximately 3 million national residents.
Per Capita GDP: Countries where the income was low enough for the majority of
the population to reduce the attractiveness of their market for most reasonable
businesses.
Comparing last year’s Index methodology to this year’s model, we noticed some minor and
major changes in some countries’ positioning.
These changes are largely contributable to our revised definition of the size of the market. In
52. 50Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
order to represent smaller markets and capture their growth patterns, MotionPoint analysts
used a logarithmic scale for market size based on per-capita GDP, population with Internet
access, and regional annual traffic data.
Additional data points were added to capture market efficiency and stability. This reduced
the rankings of countries which have less transparency and stability.
Additional Sources
Mobile-First Global Consumers, and Their Impact on Search
HubSpot, June 15, 2016 | Statista, retrieved December 2016 | Digiday, Jan. 5, 2016 | Statista, retrieved December 2016 | Dazeinfo,
Dec. 18, 2014 | eMarketer, Sept. 24, 2015 | Google Webmaster Central Blog, April 21, 2015 | Google Webmaster Central Blog,
March 16, 2016 | Google Webmaster Central Blog, Nov. 4, 2016 | Bing blog, Nov. 13, 2015 | Search Engine Land, Feb. 2, 2016
Evolving E-Commerce Regulations in the EU
European Commission, March 18, 2016 | European Commission, retrieved December 2016 | Internet Retailer, April 22, 2016
| Statista, retrieved December 2016 | Accenture, retrieved December 2016 | European Commission, Jan. 27, 2016 | European
Commission, retrieved December 2016
E-Commerce Disruption: Virtual Marketplaces and Offsite Social Commerce
Brandwatch, July 14, 2016 | The Wall Street Journal, Dec. 6, 2016 | How Do Social Recommendations Influence Shopping Behavior?
A Field Experiment, April 2013 | Standard Chartered, April 4, 2016 | BusinessWire, June 24, 2016 | Ecommerce News Europe, June
10, 2015 | Ecommerce Foundation & Nyenrode Business University, retrieved December 2016
53. 51Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Disclaimer: All data sets and calculations inside the MotionPoint Index™ are constantly updated and improved. The offering may vary year to year due to these ongoing optimizations. Unpredictable events such as financial crises, wars, embargoes
or similar events—which can crucially interfere the development of certain markets—are not considered. Data included is based on aggregate values without any claim to completeness.
Ranking Country Macroeconomic
Environment
Regulatory
Environment
Market
Efficiency
Market
Expansion
Panel
Infrastructure Workforce
Sophistication
MotionPoint
Market
Magnitude
The Motion-
Point Index
Position
Change
Core Markets in 2017 1 United States 55.4 71.7 74.8 93.3 76.0 78.1 91.2 99.0 0
2 China 58.4 35.5 56.2 90.0 42.8 61.9 92.7 80.6 4
3 Germany 54.2 63.7 72.4 93.3 65.8 74.2 77.8 80.4 -1
4 United Kingdom 52.3 76.1 78.7 90.0 67.3 72.4 75.5 79.5 -1
5 Japan 48.1 63.9 75.4 76.7 68.7 66.3 81.1 77.2 2
6 France 53.9 62.0 71.0 93.3 61.7 75.2 72.5 74.0 -2
7 South Korea 56.7 53.1 68.9 86.7 70.3 73.1 72.2 71.5 -2
8 Canada 54.4 72.3 72.5 83.3 59.0 74.6 71.1 71.1 0
9 Netherlands 63.6 64.8 78.3 80.0 68.5 80.4 64.7 66.8 1
10 Australia 60.1 72.9 73.2 70.0 62.5 82.1 66.3 65.1 -1
Market for Expansion in 2017 11 Russia 49.7 32.4 59.8 70.0 48.2 76.6 78.4 63.8 2
12 Spain 52.2 52.2 65.7 70.0 54.5 82.8 70.9 63.5 -1
13 Sweden 58.8 72.1 74.9 80.0 69.4 80.1 59.9 61.7 2
14 Italy 51.7 40.6 76.5 63.3 51.3 63.5 71.3 58.5 6
15 Hong Kong 59.3 75.8 93.0 73.3 76.7 68.6 55.5 57.8 -1
16 Singapore 54.3 81.5 90.1 73.3 64.9 76.0 55.7 57.2 0
17 Poland 54.4 56.3 62.9 66.7 46.0 72.0 67.2 57.1 1
18 India 54.4 43.2 49.7 70.0 26.1 20.8 85.1 56.9 6
19 Belgium 53.9 66.0 80.6 66.7 57.9 80.9 60.1 56.8 0
20 Switzerland 61.2 63.3 73.9 70.0 71.6 71.2 58.7 56.5 -8
Markets to Monitor in 2017 21 Mexico 52.8 52.4 63.7 70.0 35.7 41.0 72.1 55.6 2
22 Denmark 57.5 69.8 73.8 76.7 67.7 84.5 54.7 55.4 0
23 Norway 62.5 67.8 73.7 70.0 62.7 83.1 55.8 54.6 -6
24 Saudi Arabia 52.3 37.2 63.9 73.3 47.9 31.3 67.9 51.5 12
25 Brazil 49.2 36.4 41.4 50.0 42.2 57.4 78.7 51.4 0
26 Finland 55.8 65.7 80.0 63.3 66.2 90.8 52.9 51.3 0
27 Austria 57.5 65.0 76.8 53.3 60.9 78.8 56.8 50.7 -6
28 Czech Republic 56.8 67.0 70.8 56.7 49.2 69.6 58.3 49.7 0
29 United Arab Emirates 55.0 47.5 76.5 70.0 53.6 29.6 60.7 48.8 6
30 Ireland 57.0 75.7 82.5 63.3 55.4 73.0 51.9 48.8 0
Exhibit: Complete MotionPoint Index
2016-2017 vs. 2015-2016
54. 52Share this eBook!Trendbook 2017: Digital Trends and Online Markets Outlook
Credits
Authors
Francesco Rocchi is a MotionPoint Global Online Strategist with expertise in strategy and
analysis. His marketing and consulting experience extends to collaborating with such
companies as Procter & Gamble, The Boston Consulting Group, Amazon and Enel Energia.
Francesco has an MBA from the University of Michigan (+CEIBS in Shanghai), and an MS in
Marketing and BBA from Sapienza University in Rome.
Erdem Tokmakoglu has wide experience in business development, strategy and quantitative
analysis, and has worked with a diverse range of companies operating in the Eastern Asia,
Central Asia, and the Middle East. He specializes in statistical modeling and predictive analysis.
He received his master’s degree in International Finance and Global Strategy from Yonsei
University.
Additional Contributors
Omar El Ali, Blas Giffuni, Kevin Tarvin
Editors
Victoria Bloyer, Chris Hutchins
Design
Shelia Prevaly
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