The Internet Economy in The G-20: The $4.2 Trillion Growth Opportunity

Report
The Connected World
The Internet Economy

in the G-20
The $4.2 Trillion Growth Opportunity
The Boston Consulting Group (BCG) is a global management
consulting firm and the worlds leading advisor on business strategy.
We partner with clients from the private, public, and not-for-profit
sectors in all regions to identify their highest-value opportunities,
address their most critical challenges, and transform their enterprises.
Our customized approach combines deep insight into the dynamics of
companies and markets with close collaboration at all levels of the
client organization. This ensures that our clients achieve sustainable
competitive advantage, build more capable organizations, and secure
lasting results. Founded in 1963, BCG is a private company with
75 offices in 42 countries. For more information, please visit bcg.com.
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 ODay
John Pineda
Paul Zwillenberg
March 2012 | The Boston Consulting Group

Contents
3 INTRODUCTION
6 THE INTERNETS ECONOMIC IMPACT
1 0 THE INTERNETS 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 DONT 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 im-
pact. 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 be-
come, quite simply, indispensible.
By 2016, there will be 3 billion Internet users globallyalmost half

the worlds 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 worlds top five, behind only the U.S.,
China, Japan, and India, and ahead of Germany. Across the G-20, it al-
ready amounted to 4.1 percent of GDP, or $2.3 trillion, in 2010sur-
passing the economies of Italy and Brazil. The Internet is contributing
up to 8 percent of GDP in some economies, powering growth, and cre-
ating jobs.
The scale and pace of change is still accelerating, and the nature of
the Internetwho uses it, how, and for whatis changing rapidly too.
Developing G-20 countries already have 800 million Internet users,
more than all the developed G-20 countries combined. Social net-
works reach about 80 percent of users in developed and developing
economies alike. Mobile devicessmartphones and tabletswill ac-
count for four out of five broadband connections by 2016.
The speed of these developments is often overlooked. Technology has

long been characterized by exponential growthin processing speed,
bandwidth, and data storage, among other thingsgoing back to Gor-
don Moores observation nearly five decades ago. The Intel 80386 mi-
croprocessor, introduced in the same year as that first domain name,
held 275,000 transistors. Today, Intels Core i7 Sandy Bridge-E proces-
sor 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 ex-
ponential numbers get.
The Boston Consulting Group | 3

The power of exponential growth is illustrated by an ancient fable, re-
popularized 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 hes getting off easy, and by the thirty-sec-
ond square, he owes a mound weighing 100,000 kilograms, a large but
manageable amount. Its 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 sub-
ject 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 pro-
duction 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 phe-
nomenon with its scale and speed, it presents myriad opportunities,
which consumers have been quick and enthusiastic to grasp. Business-
es, particularly small and medium enterprises (SMEs)the growth en-
gine of most economieshave been uneven in their uptake, but they
are moving online in increasing numbers and with an increasingly in-
tense commitment.
There are threats too, some misunderstood, and policymakers and

regulators alike are challenged to make the right choices in a fast-
moving environment. As is often the case with fast-paced change and
Exhibit 1 | Evolution of the Internet
From developed to developing markets From fixed to mobile From basic content to a
Internet users in the Consumer broadband data explosion
G-20 countries (millions) connections (millions) Global Internet trac
(exabytes per year)
238
2005 746
total
508 30
167
Fixed connections
Developed markets
Mobile connections
Developing markets
573
672
2015 2,062
total
2,707
total 966
1,390
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.

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 jobsin the context of the
economies of the G-20. It demonstrates that no oneindividual, busi-
ness, or governmentcan 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 Internets Economic
Impact
T he economic impact of the Internet is

getting biggerjust about everywhere
and it already has an enormous base. In the
The growth is being fueled in large part by
two factors: more users and faster, more ubiq-
uitous access. The number of users around
U.K., for example, the Internets contribution the globe will rise to a projected 3 billion in
to 2010 GDP is more than that of construc- 2016 from 1.9 billion in 2010. Broadening ac-
tion and education. In the U.S., it exceeds the cess, particularly via smartphones and other
federal governments percentage of GDP. The mobile devices, and the popularity of social
Internet economy would rank among the top media are further compounding the Inter-
six industry sectors in China and South Korea. nets impact. In the developing world in par-
ticular, many consumers are going straight
Policymakers in developed countries cite with to social. (See Exhibit 2.)
envy the GDP growth rates of 5 to 10 percent
per year being achieved in China and India,
particularly in todays troubled economic en-
vironment. At the same time, they can often
The Internet economy of the
look past similar, or even higher, rates close G-20 will nearly double
to home.
between 2010 and 2016.
The Internet economy in the developed mar-
kets of the G-20 will grow at an annual rate
of 8 percent over the next five years, far out- National levels of Internet economic activity
pacing just about every traditional economic generally track the BCG e-Intensity Index,
sector, producing both wealth and jobs. The which measures each countrys level of en-
contribution to GDP will rise to 5.7 percent ablement (the amount of Internet infrastruc-
in the EU and 5.3 percent for the G-20. ture that it has in place), expenditure (the
Growth rates will be more than twice as amount of money spent on online retail and
fastan average annual rate of 18 percent online advertising), and engagement (the de-
in developing markets, some of which are gree to which businesses, governments, and
banking on a digital future with big invest- consumers are involved with the Internet).
ments in broadband infrastructure. Overall, Big differences are apparent among the 50
the Internet economy of the G-20 will nearly countries examined, with five clusters emerg-
double between 2010 and 2016, when it will ing according to their performance on the in-
employ 32 million more people than it does dex in absolute terms and relative to per cap-
today. ita GDP. (See Exhibit 3.)

Exhibit 2 | Developing Markets Are Going Straight to Social
Users Are Adopting Social Networking Quickly as They Come Online
Social networking penetration among Internet users (%) Size of Internet

population = 50 million
100 Social networking is strong Argentina
among the connected elite
Turkey
South Africa Mexico
90 Australia
Brazil
Indonesia Canada
India Russia U.K.
Italy
80 France
Germany U.S.
70
Chinese social network
growth is exploding South Korea
60
China Heavy users of

50
Japan is experiencing more traditional
Straight Social Focus on dramatic social growth conversational
to social mainstream traditional Japan media
and mature Web
0
20 40 60 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 BCGs e-Intensity Index
BCG e-Intensity score

200
South Korea Denmark

Netherlands Sweden
U.K.
Iceland
150
Japan Finland Norway
Hong Kong Germany U.S. Luxembourg
Switzerland
France Singapore Australia
Canada
New Zealand Belgium
100 Czech Republic Slovenia Austria Ireland
Estonia Spain
Poland Portugal United Arab Emirates
Russia Hungary Israel Italy
Turkey Brazil Slovakia Greece
Malaysia
50 Argentina Saudi Arabia
Colombia Chile
China Venezuela
Morocco Mexico
Egypt South Africa Nascent
natives
Natives Players Laggards Aspirants
India Indonesia
0
20 40 60 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.

Consumption is the principal driver of Inter- Retail represents almost one-third of total
net GDP in most countries, typically repre- GDP in the G-20, and online retail contributes
senting more than 50 percent of the total in a significant and increasing share in many
2010. It will remain the largest single driver countries. (See Exhibit 6.) Nowhere is the im-
through 2016. Investment, mainly in infra- pact more apparent than in the U.K. Thanks
structure, accounts for a higher portion of the in part to high Internet penetration, efficient
total in aspirant nations as they are in the delivery infrastructure, a competitive retail
earlier stages of development. market, and high credit-card usage, the U.K.
has become a nation of digital shopkeepers,
Several natives on BCGs e-Intensity In- to paraphrase Adam Smith.
dexthe U.K., South Korea, and Japanare
among those nations with the largest Internet Several European economiesDenmark, the
contributions to GDP. China and India stand Netherlands, Sweden, and the U.K.to name
out for their enormous Internet-related ex- but fourperform strongly on BCGs e-Inten-
portsChina in goods, India in services sity Index. But various barriers hold back the
which propel their Internet-economy rank- EU as a whole, the worlds biggest single mar-
ings toward the top of the chart. Mexico and ket, when it comes to cross-border e-com-
South Korea have also developed significant merce. In January, the European Commission
Internet export sectors. announced plans to catch up, removing these
impediments and creating a digital single
Among G-20 players, the United States ben- market. The commission believes that e-
efits from a vibrant Internet economy, while commerce can double its share of overall re-
Germany and France tend to lag. The picture tail sales by 2015.
will change by 2016 as, for example, the In-
ternet economies of India and the EU-27
grow rapidly to move into the top five. (See
Exhibits 4 and 5.)
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. 2.3 8.3

South Korea 1.0 7.3
China 5.9 5.5
Japan 5.5 4.7
U.S. 14.5 4.7
G-20 54.9 4.1 4.3 Developed market average
India 1.7 4.1
EU-27 16.2 3.8
Australia 1.2 3.3 3.6 Developing market average
Germany 3.3 3.0

Canada 1.6 3.0
France 2.6 2.9
Mexico 1.0 2.5
Brazil 2.1 2.2
Saudi Arabia 0.4 2.2
Italy 2.1 2.1
Argentina 0.4 2.0
South Africa 0.4 1.9
Russia 1.5 1.9
Turkey 0.7 1.7
1.3 Natives Players Laggards Aspirants
Indonesia 0.7
Sources: Economist Intelligence Unit; Organisation for Economic Co-operation and Development (OECD); country statistical agencies; BCG analysis.

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 GDP CAGR

($trillions) (%) 201016
(%)
U.K. 2.8 12.4 10.9

South Korea 1.4 8.0 7.4
China 12.4 6.9 17.4
EU-27 20.0 5.7 10.6
India 4.3 5.6 23.0
Japan 6.6 5.6 6.3
5.4
5.5 Developed market average
U.S. 18.6 6.5
G-20 79.9 5.3 10.8
Mexico 1.5 4.2
4.9 Developing market average
15.6
Germany 3.9 4.0 7.8
Saudi Arabia 0.8 3.8 19.5
Australia 1.7 3.7 7.1
Canada 2.1 3.6 7.4
Italy 2.4 3.5 11.5
France 3.1 3.4 6.1
Argentina 0.8 3.3 24.3
Russia 2.7 2.8 18.3
South Africa 0.6 2.5 12.6
Brazil 3.7 2.4 11.8
Turkey 1.3 2.3 16.5
Indonesia 1.5 1.5 16.6
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. 23.0
Germany 11.7
Australia 8.9
South Korea 8.1
8.5 Developed market average
Saudi Arabia 8.0
Italy 8.0
U.S. 7.1
Japan 6.8
France 6.7
G-20 1 6.0
Canada 5.3
India 4.5
Brazil 4.3
China 2 3.4
Russia 3.2 3.2 Developing market average
Argentina 2.9
Mexico 1.6
South Africa 1.5
Turkey 1.1
Indonesia 0.3
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 Internets 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
penetration and security concerns over on-
line payments hold back online commerce,
Mexican consumers without credit cards can
online and then purchased offline (ROPO) pay for their online purchases at 7-Eleven
more than $1.3 trillion in goods in 2010the stores. Like the U.S., Japan has a busy online
equivalent of about 7.8 percent of consumer retail market, which totaled $89 billion in
spending, or more than $900 per connected 2010. ROPO added $139 billion because
consumer. Japanese consumers still prefer the experi-
ence of shopping in stores. Across the G-20,
ROPO is a bigger factor in developed econo- ROPO would add an additional 2.7 percent if
mies, as one would expect, but consumers ev- it were counted as part of Internet GDP.
erywhere research a wide variety of products
online before purchasing them elsewhere. In
China, groceries are a popular ROPO pur-
chase; in the United States, cars; India, tech-
Consumers everywhere
nology products; Brazil, electronics, applianc- research a wide variety of
es, and travel packages. Multiple factors affect
e-commerce and ROPO. In addition to regula-
products online before pur-
tory barriers like those cited above, the state chasing them elsewhere.
of infrastructure for online and bricks-and-
mortar retail plays a big role, as do Internet
penetration, credit-card use, and consumer Mobile shoppingusing a smartphone to
confidence in online payment systems, deliv- identify deals, compare products and prices,
ery, and fulfillment. and seal the deal while on the gois grow-
ing in popularity worldwide. As device prices
ROPO spending is higher than online retail in fall, especially in developing markets, in-
virtually all the nations we studied. (See Ex- creased smartphone penetration will have a
hibit 7.) In the U.S., online retail sales totaled dramatic impact on both retail commerce
$252 billion in 2010, and ROPO added anoth- and e-commercefurther blurring the lines
er $482 billion. ROPO dwarfs online retail in between online and offline buying. Mobile
Turkey$37 billion compared with $2 bil- apps such as RedLaser, Google Shopper, and
lionowing in large part to poor delivery in- Amazon Remembers make it ever easier for
frastructure and consumer concern over ful- consumers to research products, compare
fillment. In Mexico, although low credit-card deals, and make purchases as they see fit at

Exhibit 7 | ROPO Greatly Amplifies the Internets Impact on Retail
Online retail and ROPO (research online, purchase oine), 2010

Value
($)
U.S. 252 482 734

Japan 89 139 228
U.K. 102 87 189
Germany 38 88 126
China 10 96 106
France 27 78 105
Canada 18 58 76
Italy 20 48 68
South Korea 23 44 67
Australia 20 38 58
Russia 12 33 45
Turkey 2 37 40
Brazil 15 19 34
Mexico 2 27 29
India 7 6 13
Argentina 2 9 11
Saudi Arabia 3 5 8
South Africa 2 24 Online retail ROPO
Indonesia ($billions) ($billions) 2
0 11
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 Taobao in 2010 than at Chinas top-five brick-
face an especially fast-changing and increas- and-mortar retailers combined.
ingly competitive environment in the years
ahead. With the rapid growth of e-commerce The Internet is having a big impact on how
and its potential to disrupt both the top and enterprises do business and interact with one
bottom lines, retail may be ripe for a transfor- another, too. Cloud-based data storage, inte-
mation similar to the one seen in media. A grated procurement systems, and enterprise
multichannel offering that captures sales social networks that facilitate communica-
wherever they occur will become a must tion within and among organizations in real
have for most businesses. time are helping companies address a host of
procurement, coordination, communication,
Online advertising, a $65 billion business in and fragmentation issues. With spending in
the G-20 in 2010, is forecast to grow 12 per- the $3 trillion range, both the U.S. and Japan
cent a year to almost $125 billion in 2016. In lead the world in business-to-business e-com-
countries with more developed Internet econ- merce, but penetration is picking up in other
omies, 15 to 30 percent of advertising spend- countries. South Koreas percentage of busi-
ing has migrated online. Online advertising ness-to-business e-commerce is approaching
spending in the U.K. overtook spending on 50 percent, as is Japans.
television advertising in 2011and it now
exceeds spending on all other media cate-
gories.
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

Consumers (Everywhere)
Know a Good Deal When
They See It
C onnected consumers place a consid-

erable value on the Internet. In the G-20
economies, this consumer surplusthe
online. Demographics play a role in the last
factor: in many markets, the heaviest users of
the Internet are the youngno surprise
perceived value that consumers themselves thereand those over 55, whose ranks will
believe they receive, over and above what swell as the population ages. (See Exhibit 8.)
they pay for devices, applications, services, All these factors are on the rise, which points
and accessamounts to $1,430 a person.1 to continued growth in the consumer surplus.
Consumer surplus varies vastly across
countries, depending in part on the impact of Various aspects of consumer surplus are illus-
the drivers shaping each nations Internet trated in the country profiles at the end of
economy. For example, its $323 per person in this report. These profiles also show the In-
Turkey, $1,215 in South Africa, $1,287 in ternets impact on GDP and on the retail
Brazil, and $4,453 in France. The aggregate market in each country. Most significantly,
consumer surplus across 13 of the G-20 they highlight how deeply the Internet has
countries is $1.9 trillion, or about 4.4 percent ingrained itself in daily life around the world,
of the GDP. by showing what consumers are willing to
give upfrom satellite navigation to sexin
It is interesting to note that in countries such order to keep their Internet access.
as France and Germany, which have relative-
ly low levels of Internet GDP, consumers per-
ceived value of the Internet is very high. Fur-
thermore, although the consumer surplus
figures are lower for many developing mar- Note
kets, they are actually quite high relative to 1. In our analysis, we took into consideration the value
derived from communication, content (entertainment,
local incomeslower-income people get rela- news, and social media), search, commerce, and job
tively more benefit from the Internet than searches. We used a loss aversion technique to avoid
wealthier people do. Closing the digital di- anchoring the data to the current prices of goods and
servicesmany of which are freeand to determine
vide can have a meaningful impact for the the true value that people place on them. To measure
less well-off. 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
Consumer surplus has multiple drivers, found that consumers receive a surplus equal to
among them the quality of online content, the about 80 percent of value, or 4 to 5 percent of personal
number of devices in use, the ease and fre- income.
quency of access, and the number of people

Exhibit 8 | Youngest and Oldest Consumers Tend to Value the Internet the Most
Perceived Internet value per user
($) () (thousands)
USA France Japan
4,000 6,000 400
3,506 5,174
316
3,000 2,926 2,363 300 244
4,000 3,701
1,953 2,978 3,062
2,000 1,456 2,324 200 172 178
158
2,000
1,000 100
0 0 0
1824 2534 3544 4554 55+ 1824 2534 3544 4554 55+ 1824 25341 3544 4554 55+
() (KRW (Rp thousands)

Germany thousands) South Korea India
4,000 3,000 60 55
3,226 3,060
3,000 2,722 2,130
2,478 2,000 40
2,578 1,807
2,000 24 24
936 22 22
1,000 782 20
1,000 494
0 0 0
1824 2534 3544 4554 55+ 1824 2534 3544 4554 55+ 1824 2534 3544 4554 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 Japans 2534 category is estimated (base size).

From High-Web to No-Web
Opportunities for Small and Medium Enterprises
G iven their agility and ability to

innovate, one would expect SMEslong
the engine of economic growth in many
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
economiesto grasp the power of the fast as revenues at firms with no Internet
Internet to build their businesses. Indeed, presence.
many have, and these companies have helped
turned the Web into an important vehicle for Many U.S. SMEs have integrated the Internet
revenue growth and job creation. But a into their businesses. They are much more
surprising number have notor have ven- aggressive online than low-Web companies,
tured online only to a limited extent. These particularly in activities such as search en-
companies are leaving an enormous opportu- gine optimization, social networking, buying
nity untapped. from and paying suppliers. They are even
managing their business finances and recruit-
In our view, every business needs to go ing staff online.
digitaland fast. Policymakers, too, should
pay heed. Given SMEs track record in job cre- In many developed and developing markets,
ation, policies that encourage more of these high-Web companies are twice as likely as
companies to develop an online presence their low- or no-Web counterparts to have a
could help address the lingering unemploy- national and international customer base, as
ment that currently characterizes the recov- opposed to selling only locally. In the U.S.,
ery in many countries. high- and medium-Web businesses expect to
grow by 17 percent over the next three years,
Over the last 18 months, BCG has surveyed compared with 12 percent for low- and no-
workers at more than 15,000 companies that Web companies.
operate in the worlds biggest economies and
that employ fewer than 250 people (in the High- and medium-Web SMEs generate
U.S., the cutoff was 500). We grouped the more jobs. In Germany, 93 percent of high-
companies into four categories: high-Web, Web and 82 percent of medium-Web compa-
medium-Web, low-Web, and no-Web.1 nies increased employment over the past
three years, compared with only 50 percent
The results are compelling. Across 11 of the of the no-Web firms. Japan experienced simi-
G-20 countries, high-Web SMEs have experi- lar results. In South Korea, employment in-
enced revenue growth that was up to 22 per- creased at 94 percent of high-Web SMEs and
cent higher than that achieved by SMEs with at 60 percent of no-Web companies.

Weve identified five value levers that explain enhance a wide range of functions,
the Internet advantage of High-Web SMEs: including customer relationship manage-
ment, information management, and
Geographic Expansion. The Internet creates customer payments. As a result, these
a borderless world for many SMEs, companies can grow quickly without
enabling them to compete with much requiring large investments in infra-
larger, multinational companies by structure.
accessing markets that were previously
out of reach. Easier and Quicker Staff Recruitment. The
recruiting options available today are
Enhanced Marketing. Online marketing more powerful and less expensive than
delivers expanded reach and measurable ever before, and they enable SMEs to tap
returns. It also yields valuable data about a global talent market.
consumers and their preferences, enabling
expressly targeted advertising and offers. The most powerful lever may be improved
customer interaction, which is achieved prin-
Improved Customer Interactions. Social cipally by exploiting the participatory nature
media make it possible for companies to of todays Internet. Nearly two-thirds of high-
engage in real-time dialog with customers Web SMEs are moving quickly to match their
not only to boost sales but also to build customers engagement in social networks.
loyalty and even to help create, refine, and The impact can be seen in such developing
enhance products and services. markets as Brazil and China. (See Exhibit 10.)
Despite high barriers impeding SME adoption
Leveraging the Cloud. SMEs can access of online activities (e.g., lack of infrastructure
sophisticated, often cloud-based, tools to and computer penetration), these countries
Exhibit 9 | SMEs That Make Extensive Use of the Web Grow Faster
Historical three-year sales growth
(%) China Brazil India Turkey

30
20
15 8 5
25
10 20 19
13 17 22
9 12
0
5
(%)
Germany U.S. France South Korea
30
20
10 18 14 3
10 10 7
4 15 6 11
0
5 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.

Exhibit 10 | More SMEs in Developing Markets Are Using the Internet to Engage with Consumers
Brazil and China have higher percentages of ...and generally higher percentages of SMEs
High-Web SMEs... engaging consumers online
Percentage of SMEs by Web involvement Percentage of SMEs using Internet activity to engage consumers
53
Website 51
China 35 8 30 27
72
71
Online 61
advertising
71
41
Brazil 27 8 36 29 Blogging 38
22
56
Social 43
networking 39
66
U.K. 23 7 54 16
57
E-commerce
49
No-Web Low-Web Medium-Web High-Web 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 high- Most of these barriers must be hurdled by the
Web SMEs than their developed-market SMEs themselves. But policymakers should
counterparts, but their SMEs are also substan- take note that access issues and government
tially more adept at moving beyond Internet regulations were cited as impediments by
marketing to exploit the Webs facility for one in five SMEs in developed marketsand
driving sales through more intensive custom- by two in five in developing economies.
er interaction. These are areas where governments may
have opportunities to lend a hand and can
The barriers keeping SMEs from engaging reap the benefits of increased economic
more broadly or deeply online fall into five growth and job creation.
general categories: poor access to the requi-
site technology, lack of capabilities, lack of re-
sources, doubt over the potential returns, and
an unfavorable business environment. Not
surprisingly, access problems and an unfavor- Note
able business environment were cited far 1. High-Web companies use a wide range of Internet
tools to market, sell, and support customers, interact
more often by SMEs in developing markets with suppliers, and empower employees; medium-Web
than by their developed-market counterparts. businesses market or sell goods or services online;
Almost half of SMEs in India and Indonesia low-Web businesses have a website or a social network-
ing site; no-Web businesses do not have a website.
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 Ja-
pan, and about one-quarter of U.S. and U.K.
firms reported a lack of necessary financial
resources.

Dont 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 (especial-
Companies that have not yet developed an
online strategy for themselves need to build
their digital assets while reducing digital lia-
ly in developing markets), more mobile users, bilities (which are often organizational) that
more users using various devices throughout might prevent them from tapping opportuni-
the day, and many more people engaged in ties. This topic will be the subject of the next
an increasingly participatory medium. On the forthcoming report in BCGs Connected
second half of the chessboard, as the rice pile World series.
starts to rival Mount Everest in magnitude
(the size it would reach on the sixty-fourth Governments also face challenges and oppor-
square), the rapidly evolving Internet has the tunitiesand many of these are increasingly
potential to both enrich and overwhelm. complex. Fifteen years ago, as the commercial
Internet was beginning to make its potential
Businesses in particular need to make a apparent in the U.S. and elsewhere, President
choice. They can rise to the challenge of a Bill Clinton outlined five principles constitut-
new Internet-driven marketplaceand ben- ing a framework for global electronic com-
efit from the expanded capabilities and high- merce:
er growth rates that high-Web SMEs are al-
ready achieving throughout the G-20 nations. 1. The private sector should lead.
The alternative is following in the footsteps
of such industries as music and publishing, 2. Governments should avoid undue restric-
which held on to outdated business models tions on electronic commerce.
for too long and are now dealing with com-
petitive environments that have been re- 3. Where governmental involvement is
shaped around them. needed, its aim should be to support and
enforce a predictable, minimalist, consis-
For those willing to think big, embrace tent, and simple legal environment for
change, move quickly, and organize different- commerce.
ly, there are countless opportunities to reap
the rewards of the Internets creative destruc- 4. Governments should recognize the unique
tion (as defined by economist Joseph Schum- qualities of the Internet.
peter rather than by Karl Marx) in industries
ranging from health care to retail and con- 5. Electronic commerce on the Internet
sumer goods. should be facilitated on a global basis.

The Internet is a very different, much bigger, On a national level, policies that promote in-
and more complex place now than it was vestmentespecially in the infrastructure in
then. New, important, and difficult issues the developing worldand emphasize educa-
have moved to the fore, among them privacy, tion, training, and skills-building everywhere
piracy, protection, security, net neutrality, are essential. Perhaps even more than the in-
and taxation. They are already causing con- dustrial era and information age, the Internet
flict and contention as different players with economy requires a well-educated and skilled
distinct interests choose sides. The recent de- workforce. Countries that fall behind in pro-
bate over SOPAthe proposed Stop Online viding educational opportunity are also likely
Piracy Actin the U.S. is one example of how to lose out to others in Internet-driven eco-
fractious such issues can be. In February, nomic growth.
street protests in several European cities
against an antipiracy agreement seen as lim-
iting the freedom of online speech showed
that citizens are paying attention and have
Policies that promote invest-
strongly held points of view. ment and emphasize educa-
In the best of all worlds, with the Internet be-
tion, training, and skills-build-
ing a global phenomenon, governments ing are essential.
would act in a coordinated manner, working
toward international standards when they are
called for and toward cross-country agree- Different countries will take different ap-
ments to limit intervention when it is better proaches, but the overarching challenge fac-
to let the free market do its own work. This is ing those empowered to do the peoples busi-
a high bar, to be sure, and we may need an ness is the sameensure ready and
updated framework with some new princi- affordable access, a level playing field, and an
ples, but those put forth by President Clinton open competitive environment that enables
offer a still-valid structure for engaging the everyone to tap the economic benefits of the
debate. Internet.
COUNTRY PROFILES
I n this section, we feature a series of
detailed profiles illustrating Internet
economic activity across the G-20. For each
GDP, an illustration of how consumers are
using the Internet and what they value, and
an assessment of use byand impact
economy, we have provided information on onsmall and medium enterprises.
the impact of the Internet on commerce and

Argentinas Internet Economy
2016
Comparison of Internet economy with
traditional industry sectors (percentage
of GDP)
GDP contribution 5 Manufacturing

($billions) Wholesale and retail trade
Real estate
8
Government
2010
Agriculture, forestry, and hunting
spending
Education and health services
TOTAL
28 Logistics and communication
Public administration
2
18 Financial transactions
TOTAL 3 Investment
Construction
8
5 Consumption Community services
Mining
Net exports --3
--1 Hotels and restaurants
Percentage of GDP Utilities
Argentina Argentina Fishing
2.0 3.3
4.1 5.3 2.0
G-20 G-20 Internet
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; AmricaEconoma; BCG analysis.
Note: Some columns may not add up to total contributions due to rounding.
The Internets Impact on Commerce in Argentina
$9 Research online,
billion purchase oine
$2 (2.9%) 2010
billion
(1.4%) $568
$9 per
Online 2016 billion online
retail 2010 (5.9% of
user
total retail)
Total
retail
Percentage of total advertising expenditures in 2010
45.8
2016
32.2
6.7 7.7 10.0
4.5
3.1
$0.3 40.0% $1.9
billion billion
CAGR
Television Newspaper Out-of-home Magazine Radio Online Online
Magnaglobal; CCB; INDEC; CACE; IEMR; company reports; World Bank; World Trade Organization; AmricaEconoma; BCG analysis.
Note: Percentages may not total 100 due to rounding.

Australias Internet Economy

of GDP)
2016
GDP contribution Real estate
Financial services
($billions) and insurance
Wholesale and retail trade
Government
2010
spending 14 Manufacturing
Mining
17 Construction
Professional, scientific,
9 and technical services
Health care
15 Investment TOTAL Logistics
61
TOTAL 50 Public administration
Education and training
41 29 Consumption
Information and telecommunications
Administration
12 Net exports --19 Hotels and restaurants
Agriculture
Percentage of GDP Utilities
Australia Australia Arts, entertainment, and recreation
3.3 3.7
4.1 5.3 3.3

G-20 G-20 Internet
Magnaglobal; CCB; Australian Bureau of Statistics; Forrester Research; IEMR; Australian Communications and Media Authority; company reports; National
Broadband Network; BCG analysis.
The Internets Impact on Commerce in Australia
$38 Research online,

$20 billion purchase oine
(8.9%) 2010
billion
(5.8%)
$2,302
$38 per
Online 2010 2016 billion online
user
retail (10.9% of
total retail)
Total
retail
Percentage of total advertising expenditures in 2010 2016

31.5 30.2 34.0
18.4
7.5 4.5
$5.3
7.9 $2.1 16.4% billion
billion CAGR
Television Newspaper Radio Magazine Out-of-home Online Online
Magnaglobal; CCB; Australian Bureau of Statistics; Forrester Research; IEMR; Australian Communications and Media Authority; company reports; National
Broadband Network; BCG analysis.

Brazils Internet Economy
2016
of GDP)
8
GDP contribution Public and personal
services
($billions) 21
2010
Government Manufacturing
spending Wholesale and retail trade,
hotels, and restaurants
4 Real estate and business
services
TOTAL
14 Investment 76 89 Public administration
Financial services and insurance
TOTAL
46 34 Agriculture
Consumption
Construction
--6 Net exports Logistics
--16
Mining
Percentage of GDP
Brazil Brazil Electricity, gas, and water
2.2 2.4
4.1 5.3 2.2

G-20 G-20 Internet
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.
The Internets Impact on Commerce in Brazil

$15 (4.3%) 2010
billion
(3.1%) $260
$19 per
user
total retail)
Total
retail
60.3
2016
10.1 15.6 17.4
7.5 2.9
3.5 $1.7 14.2% $3.7
billion CAGR billion
Television Newspaper Magazine Radio Out-of-home Online Online


Brazils Consumers Benefit from the Internet
$154
Annual value What do E-mail
consumers
value?
$1,287 $152
$1,472 Consumer
surplus
General search
Perceived
value
$131
$185 Online banking
Cost and investing
Percentage of people willing to give up a key lifestyle habit instead of the Internet for a year
78 76 72 60 59 43 24 12 8
Satellite Alcohol Fast food Coee Chocolate Exercise Car Sex Shower
navigation
Note: Due to rounding, perceived value does not total consumer surplus plus cost.
The Internets Impact on Small and Medium Enterprises (SMEs) in Brazil
SMEs percentage of Historical three-year sales growth Percentage of SMEs that added
private-sector of SMEs (percentage) 1 jobs during the last three years 1
employment
98 95
High-Web 20
77
53
Medium-Web
dium-Web 6
20 Low-Web and
No-Web 12
SMEs percentage of GDP High- Medium- Low-Web and

Web Web No-Web
Intensity of Web usage (percentage of SMEs using the Internet for a business activity) High-Web
Low-Web
100 100 100 100

86 74 73 60 50 70 54
3 26 24 3 38 1 3 3
0
Website Online Search Blogging Social E-commerce Recruitment Finance Paying E-procurement
advertising engine networking suppliers
optimization
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.

Canadas Internet Economy

of GDP)
GDP contribution
($billions) Government
2016 Financial services,
insurance, and real estate
Manufacturing
spending 13
2010
Health care and social services
29 Public administration
11 Construction
Education services
TOTAL
22 Investment 73 Professional, scientific, and technical services
Logistics
TOTAL 51
48 Mining, oil, and gas extraction
27 Consumption Information and cultural industries
Administrative and support
--12 Net exports --20
Utilities
Hotels and restaurants
Percentage of GDP Agriculture, forestry, and fishing
Canada Canada Arts, entertainment, and recreation
3.0 3.6
4.1 5.3 3.0

G-20 G-20 Internet
Magnaglobal; CCB; eMarketer; Statistics Canada; Retail Council of Canada; Industry Canada; AXCO; IEMR; H2; BCG analysis.
The Internets Impact on Commerce in Canada

billion (5.3%) 2010
(3.4%)
$2,082
$58 per
user
retail (11.3% of
total retail)
Total
retail

2016
32.6 21.8 28.8
20.0
5.5 5.3
14.7 $3.8
$2.1 10.6% billion
billion CAGR
Magnaglobal; CCB; eMarketer; Statistics Canada; Retail Council of Canada; Industry Canada; AXCO; IEMR; H2; BCG analysis.

Chinas Internet Economy
2016 27
of GDP)
GDP contribution 92 Manufacturing

($billions) Agriculture, forestry, and fishing
Wholesale and retail
Government
2010
Mining
spending
321 Construction
Logistics
TOTAL Financial intermediation
12 852 Real estate
Public and social organizations
55 Investment Education
62 Consumption Electricity, gas, and water
TOTAL 412 Information and communications technology (ICT)
326 Hotels and restaurants
197 Net exports
Leasing and business services
Health care, social security, and social services
Services to households
Percentage of GDP Scientific research and technical services
China China Arts, entertainment, and recreation
5.5 6.9
4.1 5.3
5.5
G-20 G-20 Internet
Magnaglobal; CCB; Chinese government; iResearch; China Information Almanac; BCG analysis.
The Internets Impact on Commerce in China
$176
billion $246 Research online,
(3.4%) purchase oine
billion
(4.7%) 2010
$10
billion $62
(0.4%) billion
Online $213
retail (C2C)
(2.5%)
$96 per
2016 billion online
user
Online
retail (B2C) 2010 (4.2% of
total retail)
Total retail
45.8 2016
25.4
11.9 18.0
7.9
2.4
6.6 $10.9
$2.8 25.1% billion
billion CAGR
Television Newspaper Out-of-home Radio Magazine Online Online


Chinas Consumers Benefit from the Internet
$53
Instant messaging
Annual value What do
consumers
value?
$451 $47
$598 Consumer
surplus
Online shopping
Perceived
value
$147 $46
Cost Online banking
and investing
86 85 82 79 78 56 45 37 36
Alcohol Coee Chocolate Satellite Fast food Car Exercise Shower Sex
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in China
Historical three-year sales growth Percentage of SMEs that added

SMEs percentage of of SMEs (percentage)1 jobs during the last three years 1
employment
97 91
High-Web
90
25
59
Medium-Web
dium-Web 20
80 Low-Web and
No-Web 9

Web Web No-Web
Low-Web
100 100 89 100 100

12 76 77 12 46 64 62 59 64
3 0 6 3 0 3
optimization
1
2
This percentage reflects fewer than 10 responses from no-Web SMEs.

Frances Internet Economy
2016 Comparison of Internet economy with

of GDP)
16
GDP contribution Real estate
($billions) Manufacturing
33
Government Wholesale and retail trade
spending Health care and social services
2010 TOTAL
105
Construction
14 Logistics
67
28 Investment Education
TOTAL
Financial services
73 Consumption
Agriculture
--10 Net exports --12 Food, beverages, and tobacco
Percentage of GDP Metals
France France Utilities
2.9 3.4
4.1 5.3 2.9
G-20 G-20 Internet
Magnaglobal; CCB; EC; H2; IE Market Research; IDS; INSEE; company reports; Eurostat; Forrester Research; AXCO; BCG analysis.
The Internets Impact on Commerce in France

billion (6.7%) 2010
(4.5%)
$1,682
$78 per
user
retail (12.9% of
total retail)
Total
retail

2016
32.2
19.4 19.7
15.3
15.1 11.1
7.0 $3.2
$2.3 5.6% billion
billion CAGR
Television Newspaper Magazine Out-of-home Radio Online Online


Frances Consumers Benefit from the Internet
$597
consumers
value?
$4,453 $570
General search
$4,788 Consumer
surplus
Perceived
value
$420
$335 Online banking

and investing
Cost
86 77 69 66 61 42 23 16 5
Fast food Satellite Alcohol Chocolate Coee Exercise Car Sex Shower
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in France
private-sector of SMEs (percentage)1 jobs during the last three years 1
employment
96
High-Web 10
87
65
56 60
Medium-Web
dium-Web 6
Low-Web and 7
No-Web
SMEs percentage of High- Medium- Low-Web and

private-sector turnover Web Web No-Web
Low-Web
100 100 100 100

43 78 63 61 10
49 8 4 7 32 49 9 38 5 38 5
Website
Online Search Blogging Social E-commerce Recruitment Finance Paying E-procurement
optimization
1

Germanys Internet Economy
2016
of GDP)
GDP contribution 15 Real estate

Government
2010 14
spending 39
Health care and social work
TOTAL Public administration
31 Investment 157
95 Logistics
TOTAL
100 Education
59 Consumption
Construction
8 Financial services
--5 Net exports Utilities
Percentage of GDP Hotels and restaurants
Germany Germany Mining
3.0 4.0
4.1 5.3 3.0
G-20 G-20 Internet
Magnaglobal; CCB; EC; Eurostat; Forrester Research; H2; IE Market Research; AXCO; DB Research; FBS; GfK; IDC; BCG analysis.
The Internets Impact on Commerce in Germany

$38 billion purchase offline
(11.7%) 2010
billion
(7.1%)
$1,330
$88 per
billion online
Online
retail 2010 2016 (16.2% of
user
total retail)
Total
retail

2016
34.3
22.9 26.4
20.7
13.3 4.8
$7.1
$5.0 6.2% billion
4.0 billion CAGR
Newspaper Television Magazine Out-of-home Radio Online Online

Germanys Consumers Benefit from the Internet
$438
consumers
value?
$3,487 $389
General search
$3,857 Consumer
surplus
Perceived
value
$362
$370 Online banking

and investing
Cost
89 77 77 70 55 45 23 16 10
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in Germany
employment
93
High-Web 82
18
57
54 61
Medium-Web
dium-Web 8
Low-Web and 4
No-Web

Low-Web
100 100 100 100

67 75 12 45 49 50 49 72
2 3 7 7 39
22 0 0
optimization
1

Indias Internet Economy
2016 11
2
of GDP)
Agriculture
GDP contribution 32 forestry, and fishing
($billions) Financial services,
real estate, insurance,
2010
and business services
Government Hotels and restaurants
spending 108
TOTAL
242 Manufacturing
2 Social and personal services

12 Investment
14 Consumption Construction
TOTAL 8 91
70
41 Net exports Logistics and communications
Mining
Percentage of GDP
India India Utilities
4.1 5.6
4.1 5.3 4.1
G-20 G-20 Internet
Magnaglobal; CCB; H2; Reserve Bank of India; Indian government; Telecom Regulatory Authority of India; NASSCOM; MediaNama; Trendstream; BCG
analysis.
The Internets Impact on Commerce in India

(4.5%) 2010
$7
billion
(0.9%) $78
$6 per
user
total retail)
Total
retail
41.7 39.8
2016
7.7 3.4 4.6
3.5
4.0
$0.1 $0.6
billion
25.3% billion
CAGR

analysis.

Indias Consumers Benefit from the Internet
$48
consumers
value?
$414 $46
$494 Consumer
surplus
General search
Perceived
value
$44
$80
Cost Online banking
and investing
71 70 67 64 63 44 38 36 33
Satellite Alcohol Fast food Chocolate Coee Exercise Car Shower Sex
navigation
analysis.
The Internets Impact on Small and Medium Enterprises (SMEs) in India
employment
100 98
High-Web 19 83
25
Medium-Web
dium-Web 19
17 Low-Web and
No-Web 13

Web Web No-Web
Low-Web
100 100 100 100

86 74 79 75 55 51 60 12 50
5 17 35 7 3 1 1
optimization
analysis.
1

Indonesias Internet Economy

of GDP)
2
GDP contribution Manufacturing
($billions)
10 Agriculture
2010
Government
spending
TOTAL
22 Mining
1
Construction
13
5 Investment
TOTAL Services
9
3 Consumption Financial services, real estate,
Net exports --2
--1 Logistics and communications
Percentage of GDP
Indonesia Indonesia Electricity, gas, and water
1.3 1.5
4.1 5.3 1.3

G-20 G-20 Internet
Sources: Economist Intelligence Unit; Ovum; Gartner; Euromonitor International; Magnaglobal; CCB; APEC; PTIK; Nielsen; IDC; Statistics Indonesia; H2;
Indikator TIK 2010; BCG analysis.
The Internets Impact on Commerce in Indonesia
$2 Research online,
$0.4 (0.3%) 2010
billion
(0.1%) $16
$1 per
user
total retail)
Total
retail
52.6
35.1 2016
7.0 0.6 2.1
3.9
0.8
$0.03 39.3% $0.2


Indonesias Consumers Benefit from the Internet
$46
General search
consumers
value?
$364 $43
$459 Consumer
surplus
E-mail
Perceived
value
$36
$94
Cost
Online banking
and investing
89 78 78 76 75 73 52 34 34
Alcohol Chocolate Shower Satellite Coee Fast food Exercise Car Sex
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in Indonesia
employment
95
High-Web
87
16
69
97
Medium-Web
ium-Web 14
57 Low-Web and
No-Web 7

Web Web No-Web
Low-Web
100 100 100 100

76 79 75 65 60 56 64 63
10 7 3
7 22 16 0 0
optimization
1

Italys Internet Economy

of GDP)
Real estate
GDP contribution
2016

spending 7
2010
Public administration and defense
14 Health and social work
Construction
7 Financial services
TOTAL
14 Investment 83 Education
70 Travel and tourism
TOTAL
43 31 Consumption Restaurants
Agriculture
--9 Net exports --9 Utilities
Logistics
Percentage of GDP Communications
Italy
Italy Mining
2.1 3.5
4.1 5.3 2.1

G-20 G-20 Internet
Magnaglobal; CCB; Italian National Institute of Statistics (Istat); Politecnico di Milano (Polimi); Confindustria; Forrester Research; company reports; Assinform;
BCG analysis.
The Internets Impact on Commerce in Italy

billion (8.0%) 2010
(3.4%)
$1,499
$48 per
user
retail (8.4% of
total retail)
Total
retail

2016
56.1
13.3 26.6
11.3
10.1 3.9
5.4 $3.8
$1.3 20.8% billion
billion CAGR
Magnaglobal; CCB; Italian National Institute of Statistics (Istat); Politecnico di Milano (Polimi); Confindustria; Forrester Research; company reports; Assinform;
BCG analysis.

Japans Internet Economy

2016
of GDP)
GDP contribution Public and

36 personal services
($billions)
2010
Manufacturing
Government 88
spending Real estate and business services
32 Wholesale and retail trade,
80 TOTAL Public administration
372
TOTAL Investment 271 Logistics and communications
258
163 Construction
Consumption
Finance and insurance
Net exports Electricity, gas, and water

--16 --23
Percentage of GDP Agriculture
Japan Japan Mining
4.7 5.6
4.1 5.3 4.7
G-20 G-20 Internet
Magnaglobal; CCB; Japanese government; IDC; FCR; Nomura Research Institute; Nielson; Japan External Trade Organization ( JETRO); Dentsu; BCG analysis.
The Internets Impact on Commerce in Japan
$158
$89 billion Research online,
(6.8%) purchase oine
billion 2010
(4.3%)
$1,387
$139 per
user
retail (6.7% of
total retail)
Total
retail
50.4 2016
13.8 21.6 26.3
8.1
4.1
$7.0 3.7% $8.7
2.0 billion CAGR
billion


Japans Consumers Benefit from the Internet
$148
consumers
$679 value?
Consumer $142
surplus
$1,446 General search
Perceived
value
$767 $104
Cost
Online banking
and investing
86 86 85 74 70 60 56 44 17
Satellite Chocolate Fast food Coee Alcohol Exercise Sex Car Shower
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in Japan
employment
94
3 High-Web 73
54
57
4 Medium-Web
20 10 Low-Web and
No-Web
SMEs percentage of
private-sector turnover High- Medium- Low-Web and
Web Web No-Web
Low-Web
100 100 100 100

57 88 56
68 12 9 56 7 51
31 7 19 28 2 2
17
optimization
1

Mexicos Internet Economy

of GDP)
2
($billions)
2010
Government
spending Financial services,
insurance, real estate,
TOTAL
0 24 61 Mining
9 Investment Construction
TOTAL
26 9 Consumption Logistics and communications
18
7 Net exports
Public and personal services
Agriculture, forestry, and fishing

Percentage of GDP Mexico
Mexico Electricity, gas, and water
2.5 4.2
4.1 5.3 2.5

G-20 G-20 Internet
Magnaglobal; CCB; Banco de Mxico; INEGI; company reports; BCG analysis.
The Internets Impact on Commerce in Mexico

$2 (1.6%) 2010
billion
(0.3%)
$706
$27 per
user
retail (5.8% of
total retail)
Total
retail
74.6 2016
6.7 4.0 3.1 5.6

2.6
9.1
$0.1 14.9% $0.2
Television Radio Out-of-home Newspaper Magazine Online Online
Magnaglobal; CCB; Banco de Mxico; INEGI; company reports; BCG analysis.

Russias Internet Economy
2016 3
of GDP)
GDP contribution Wholesale and

retail trade
($billions) 21 Processing
Real estate
Government
2010
spending Mining
Logistics and communications
TOTAL
2 75 Public administration
63 Construction
12 Investment Financial services
TOTAL Energy, gas, and water
27 18 Consumption Agriculture
Net exports Health care

--5 --12 Education
Percentage of GDP Hotels and restaurants
Russia Russia
Fishing
1.9 2.8
4.1 5.3 1.9

G-20 G-20 Internet
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.
The Internets Impact on Commerce in Russia

billion purchase offline
$12 (3.2%) 2010
billion
(1.7%) $670
$33 per
user
total retail)
Total
retail
53.8
2016
9.2 10.8 19.0

13.3
8.6
4.2 28.1% $4.0
$0.9 billion
billion CAGR
Television Out-of-home Newspaper Magazine Radio Online Online

Russias Consumers Benefit from the Internet
What do $138 General search

consumers
Annual value value?
$102
$1,002 Social networking
$1,197 Consumer
Perceived surplus
value $89
$196 News
Cost
88 85 80 76 70 50 36 15 14
navigation

Saudi Arabias Internet Economy
2016
of GDP)
GDP contribution 4 Mining

($billions) Public administration
7 Nonoil manufacturing
Government
2010
spending Wholesale trade and restaurants
Construction
TOTAL
29 Financial services and real estate
2 21 Financial services nondwellings
5 Investment Logistics and communications
TOTAL
10 5 Consumption Oil manufacturing
Agriculture, forestry, and fishing
2 Net exports --4 Social services
Percentage of GDP Electricity, gas, and water
Saudi
Saudi Arabia Mining and quarrying (nonoil)
Arabia
2.2 3.8
4.1 5.3 2.2

G-20 G-20 Internet
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.
The Internets Impact on Commerce in Saudi Arabia

$3 (8.0%) 2010
billion
(2.9%) $424
Online
retail
$5 per
2016 billion online
user
2010 (4.7% of
total retail)
Total
retail
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.

South Africas Internet Economy
2016
of GDP)
GDP contribution Financial services, real

($billions) 2 estate, and business services
Manufacturing
2010 1
Government
spending
6
TOTAL
Wholesale and retail trade,
14
Logistics and communication
4 Investment
9 Personal services
TOTAL
7 4 Consumption Mining
Construction
Net exports --3
--2 Agriculture, forestry, and fishing
Percentage of GDP
South Electricity, gas, and water
South Africa
Africa
1.9 2.5
4.1 5.3 1.9

G-20 G-20 Internet
Magnaglobal; CCB; Statistics South Africa; IEMR; Pyramid Research; World Wide Worx; company reports; World Bank; World Trade Organization; BCG analysis.
The Internets Impact on Commerce in South Africa
$4 Research online,
$2 (1.5%) 2010
billion
(1.2%) $339
$2 per
user
total retail)
Total
retail
45.6
2016
23.2
5.8 3.9 8.0
9.0
12.5
$0.2 24.2% $0.6

South Africas Consumers Benefit from the Internet
What do $222
consumers E-mail
Annual value value?
$211 General search
$1,215
$1,615 Consumer
Perceived surplus
value $211 Online banking
$400 and investing
Cost
81 80 77 74 63 49 22 13 10
Satellite Fast food Alcohol Chocolate Coee Exercise Sex Shower Car
navigation

South Koreas Internet Economy

GDP contribution
2016 9
of GDP)
Manufacturing
($billions)
Public and personal services
2010
16
Government
spending Real estate and business services
6 Wholesale and retail trade, hotels,
and restaurants
13 Investment 58 TOTAL Finance and insurance
114
Construction
TOTAL
75 35 Consumption
Logistics
31
20 Net exports
Agriculture
Percentage of GDP Electricity, gas, and water

South South Mining
Korea Korea
7.3 8.0
7.3
4.1 5.3
G-20 G-20 Internet
Magnaglobal; CCB; Korea National Statistics Office; IE Market Research; Bank of Korea; Korea Internet Security Agency (KISA); company reports; BCG analysis.
The Internets Impact on Commerce in South Korea

$23 (8.1%) 2010
billion
(6.6%)
$1,099
$44 per
online
Online 2016 billion
retail 2010 (13.0% of
user
total retail)
Total
retail

2016
41.5
26.0 27.0
17.9
6.9 5.4
15.2% $3.1
2.2 $1.3 CAGR billion
billion

South Koreas Consumers Benefit from the Internet
$96
General search
consumers
$453 value?
$87
Consumer
$824 surplus E-mail
Perceived
value
$372 $74
Cost
Online banking
and investing
84 83 74 70 69 50 43 41 25
Chocolate Fast food Satellite Coee Alcohol Exercise Car Sex Shower
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in South Korea
employment
94 91
High-Web 6 70
88
Medium-Web
dium-Web 13
51 Low-Web and 5
No-Web

gross industrial output Web Web No-Web
Low-Web
100 100 100 100

18 70 78 75 17 48 49
6 49 43 1 62
27 4 2 0
Website
optimization
1

Turkeys Internet Economy
2016 2
of GDP)

($billions) 10 Logistics
Government Ownership and dwellings
2010
spending
Wholesale and retail
Agriculture and fishing
TOTAL
1 31 Real estate
4 Investment
Construction
TOTAL Financial services
12 8 Consumption
Education
--1 Net exports --4 Electricity, gas, and water
Percentage of GDP Health care and social work
Turkey Turkey Mining
1.7 2.3
4.1 5.3 1.7

G-20 G-20 Internet
Magnaglobal; CCB; Turkish Statistical Institute; Turkish Telecommunication Authority; World Economic Forum; BCG analysis.
The Internets Impact on Commerce in Turkey
$9 Research online,
$2 (1.1%) 2010
billion
(0.6%) $1,212
$37 per
user
total retail)
Total
retail

17.8
52.2 22.0
13.0 $0.9
7.7
2.4 billion
17.9%
2.7 CAGR
$0.3
billion

Turkeys Consumers Benefit from the Internet
$68
General search
consumers
value?
$323 $67
$540 Consumer
surplus
E-mail
Perceived
value
$61
$217
Cost
Online banking
and investing
82 74 71 66 65 59 32 23 19
Satellite Alcohol Fast food Chocolate Coee Exercise Car Sex Shower
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in Turkey
employment
95 88
High-Web 17
78
78
Medium-Web
dium-Web
66
10
Low-Web and 5
No-Web

Low-Web
100 100 100 100

76 57 55 59 11 67
50 15 6 40 7 11 42
30 25 1
optimization
1

The U.K. Internet Economy

of GDP)
26
Real estate and
47 business services
GDP contribution
($billions) Government Wholesale and retail
spending
2010
Manufacturing
Financial services
26 TOTAL
Health care and social work
257 347 Construction
36 Investment
Education
TOTAL
Consumption Logistics
120
Utilities
Net exports
4 Communications
Percentage of GDP Mining
U.K. U.K. Agriculture
8.3 12.4
8.3
4.1 5.3
G-20 G-20 Internet
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 Internets Impact on Commerce in the U.K.

$102 (23.0%) 2010
billion
(13.5%)
$1,641
$87 per
retail 2010 (11.5% of
user
total retail)
Total
retail

37.3
29.1 23.3 28.9
8.0 7.6 $8.4

$5.4 7.7% billion
billion CAGR
3.0

U.K. Consumers Benefit from the Internet
$407
consumers
value?
$3,372 $377
$3,753 Consumer
surplus
General search
Perceived
value
$359
$381 Online banking
Cost
and investing
91 84 78 76 65 47 25 21 17
Fast food Satellite Chocolate Coee Alcohol Exercise Sex Car Shower
navigation
The Internets Impact on Small and Medium Enterprises (SMEs) in the U.K.
employment
85
High-Web 75
12
51
49 59
Medium-Web
ium-Web 7
Low-Web and 4
No-Web

Low-Web
100 100 100 100

53 80 23 22 78
42 9 50 9 40 39 20 10 3
3 28
Website
optimization
1

The U.S. Internet Economy

2016
of GDP)
GDP contribution Public administration

($billions) 129 Real estate
2010
Manufacturing
spending 289 Finance and insurance
128 Health care
Professional, scientific
TOTAL Information and technical services
236 Investment 1,000
TOTAL Construction
684 596 Logistics
Waste management
330 Consumption Accomodation and food services
Mining
Utilities
--11 Net exports --15 Business services
Education
Percentage of GDP Agriculture
U.S. Arts, entertainment, and recreation
U.S.
4.7 5.4
5.3 4.7
4.1
G-20 G-20 Internet
Magnaglobal; CCB; U.S. Bureau of Labor Statistics; U.S. Small Business Administration; PC; Forrester Research; H2; Fitch; World Economic Forum; BCG
analysis.
The Internets Impact on Commerce in the U.S.
$252 $456 Research online,

billion billion purchase oine
(5.0%) (7.1%) 2010
$1,926
$482 per
online
Online 2010 2016 billion
user
retail (9.6 % of
total retail)
Total
retail

2016
40.3
25.6
15.9 18.2
10.9 4.3
10.5 10.5% $47
$26 CAGR
billion
billion

analysis.

U.S. Consumers Benefit from the Internet
$321
General search
consumers
value?
$2,528 $318
$3,000 Consumer
surplus
E-mail
Perceived
value
$291
$472 Online banking
Cost and investing
84 83 77 73 69 43 21 10 7
Satellite Fast food Chocolate Alcohol Coee Exercise Sex Car Shower
navigation
analysis.
The Internets Impact on Small and Medium Enterprises (SMEs) in the U.S.
employment
24
High-Web 10 18
45 48 13
Medium-Web
ium-Web 8
Low-Web and 5
No-Web

Low-Web
100 100 100 100

46 74 63 10 52 3
39 6 12 33 49 6 42 5 27 1
Website
optimization
analysis.
1

The Internet Economy in the EU-27
2016
Top ten national contributions to
Internet GDP (percentage of the
Internet GDP of the EU-27)
121 U.K. 30.0
GDP contribution
($billions) 223
2010
Government Germany 16.1
spending
France 11.8
98
TOTAL
171 1,133 Italy 7.1
Investment 810
TOTAL Netherlands 5.7
619
385 Consumption
Spain 5.7
--34 Net exports --22 Sweden 5.0
Percentage of GDP 3.0

Denmark
EU-27 EU-27
5.7 Poland 2.4

3.8
4.1 5.3 Belgium 2.0
G-20 G-20
Magnaglobal; CCB; BCG analysis.
The Internets Impact on Commerce in the EU-27
Top ten national contributions to online retail (percentage

of total online retail for the EU-27)
$650
$289 billion U.K. 35.1
billion (10.8%) Germany 13.3
(5.7%) France 9.3
Sweden 6.8
Italy 6.7
Spain 5.1
Online
retail 2010 2016 Netherlands 5.0
Denmark 4.0
Total Finland 2.4
retail Ireland 2.3

33.3
23.9 27.1
19.1
11.5 6.8
$34
5.4 $20 9.2% billion
billion CAGR

BCGs 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 Natives Players Nascent Laggards
natives
Slovakia
0 50 100 150 200

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 BCGs e-Intensity Index
Natives Players Nascent Laggards

natives
Enablement Expenditure Engagement
(a measure of Internet (a measure of spending in online (a measure of Internet involvement
infrastructure) retail and online advertising) by businesses, the governments,
and consumers)
Sweden Denmark U.K.
Denmark U.K. Netherlands
Luxembourg Sweden Denmark
Netherlands Netherlands Sweden
Finland Germany Germany
U.K. Finland Finland
Germany France Austria
Austria Czech Republic Ireland
France Luxembourg Estonia
Belgium Poland France
Ireland Belgium Spain
Portugal Hungary Belgium
Spain Slovenia Luxembourg
Slovenia Spain Slovenia
Estonia Ireland Czech Republic
Italy Austria Hungary
Czech Republic Italy Portugal
Greece Slovakia Poland
Slovakia Portugal Greece
Hungary Estonia Slovakia
Poland Greece Italy
0 50 100 150 200 0 100 300 0 50 100 150

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.

note to the reader
About the Authors Suruj Dutta, Ana Carolina Freire, Hay- James ODay
David Dean is a senior partner and wood Ho, Chip Horne, Tom Hussey, Project Leader
managing director in the Munich of- Taantee Karmakar, Joe Lee, Brandon London
fice of The Boston Consulting Group. Miller, Matt Pan, Lisa Robinson, Christ-
+44 207 753 5353
Sebastian DiGrande is a partner and offer Rutgersson, Stevenlie Satryapu-
managing director in the firms San tra, and Marta Szczerba for their assis- oday.james@bcg.com
Francisco office. Dominic Field is a tance.
partner and managing director in John Pineda
BCGs Los Angeles office. Andreas The authors would like to thank Principal
Lundmark is a principal in the firms David Duffy and Mark Voorhees for San Francisco
Stockholm office. James ODay is a their help in writing this report and
project leader in BCGs London office. +1 415 732 8000
Angela DiBattista, Gary Callahan, Kim
John Pineda is a principal in the Friedman, Angela Goldberg, Sara pineda.john@bcg.com
firms San Francisco office. Paul Zwil- Strassenreiter, and Mary DeVience for
lenberg is a partner and managing di- contributions to its editing, design, Paul Zwillenberg
rector in BCGs London office. and production. Partner and Managing Director
London
Acknowledgments For Further Contact +44 207 753 5353
This report is a product of BCGs Tech- If you would like to discuss this report,
nology, Media & Telecommunications please contact one of the authors. zwillenberg.paul@bcg.com
practice.
David Dean For Further Reading
The authors are indebted to multiple The Boston Consulting Group publishes
Senior Partner and Managing Director extensively on topics related to marketing
BCG partners and colleagues for their
contributions and insights during the Munich in the digital economy. Recent examples
+49 89 2317 4150 include those listed here:
preparation of this report: Marcos Agu-
iar (Sao Paulo), Jorge Becerra (Santia- dean.david@bcg.com
Digital Manifesto
go), Jeffery Bernstein (Tokyo), Julio
A Focus by The Boston Consulting Group,
Bezerra (Sao Paulo), Vladislav Bouten- Sebastian DiGrande January 2012
ko (Moscow), Ethan Choi (Seoul), Ola-
Partner and Managing Director
vo Cunha (Sao Paulo), Tenbite Ermias Turning Local
( Johannesburg), Yucel Ersoz (Istan- San Francisco
A Focus by The Boston Consulting Group,
bul), Philip Evans (Boston), Patrick +1 415 732 8000 September 2011
Forth (Sydney), Tawfik Hammoud (To- digrande.sebastian@bcg.com
ronto), Susumu Hattori (Tokyo), Joerg The Connected Kingdom
Hildebrandt (Dubai), Nimisha Jain Dominic Field A report by The Boston Consulting Group,
(New Delhi), Carl Kalapesi (London), October 2010
David Michael (Beijing), Vaishali Ras- Partner and Managing Director
togi (Singapore), David Rhodes (Lon- Los Angeles
don), Hermann Riedl (Abu Dhabi), +1 213 621 2772
Ryoji Kimura (Tokyo), Henri Salha field.dominic@bcg.com
(Paris), Kanchan Samtani (Mumbai),
Just Schuermann (Munich), Shigeki
Andreas Lundmark
Ichii (Tokyo), Marc Vos (Milan), Sarah
Willersdorf (New York), Yukimasa Principal
Uchida (Tokyo), and Yvonne Zhou Stockholm
(Beijing). +46 8 402 4400
lundmark.andreas@bcg.com
They are also grateful to Gaby Barrios,
Patrick Bert, Jonathan Colclough,

The Boston Consulting Group, Inc. 2012. All rights reserved.
For information or permission to reprint, please contact BCG at:

E-mail: bcg-info@bcg.com
Fax: +1 617 850 3901, attention BCG/Permissions
Mail: BCG/Permissions
The Boston Consulting Group, Inc.
One Beacon Street
Boston, MA 02108
USA
To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcgperspectives.com.
Follow bcg.perspectives on Facebook and Twitter.
3/12 The Boston Consulting Group | C

Abu Dhabi Chicago Kiev New Delhi Stockholm
Amsterdam Cologne Kuala Lumpur New Jersey Stuttgart
Athens Copenhagen Lisbon New York Sydney
Atlanta Dallas London Oslo Taipei
Auckland Detroit Los Angeles Paris Tel Aviv
Bangkok Dubai Madrid Perth Tokyo
Barcelona Dsseldorf Melbourne Philadelphia Toronto
Beijing Frankfurt Mexico City Prague Vienna
Berlin Geneva Miami Rio de Janeiro Warsaw
Boston Hamburg Milan Rome Washington
Brussels Helsinki Minneapolis San Francisco Zurich
Budapest Hong Kong Monterrey Santiago
Buenos Aires Houston Moscow So Paulo
Canberra Istanbul Mumbai Seoul
Casablanca Jakarta Munich Shanghai
Chennai Johannesburg Nagoya Singapore bcg.com

The Internet Economy in The G-20: The $4.2 Trillion Growth Opportunity

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Internet Economy in The G-20: The $4.2 Trillion Growth Opportunity

Uploaded by

Copyright:

Available Formats

Report

The Connected World

The Internet Economy

The Internet Economy

March 2012 | The Boston Consulting Group

6 THE INTERNETS ECONOMIC IMPACT

1 0 THE INTERNETS FURTHER ECONOMIC IMPACT

12 CONSUMERS (EVERYWHERE) KNOW A GOOD DEAL

14 FROM HIGH-WEB TO NO-WEB: OPPORTUNITIES FOR SMALL

17 DONT BLINK: THE FUTURE IS RUSHING STRAIGHT AT US

5 3 NOTE TO THE READER

2 | The Internet Economy in the G-20

T he January 2012 report in our Connected World series examined how

By 2016, there will be 3 billion Internet users globallyalmost half

The speed of these developments is often overlooked. Technology has

The Boston Consulting Group | 3

There are threats too, some misunderstood, and policymakers and

Exhibit 1 | Evolution of the Internet

Sources: Economist Intelligence Unit; Cisco; Ovum; BCG analysis.

4 | The Internet Economy in the G-20

This report assesses the far-reaching economic impact of the Internet.

The Boston Consulting Group | 5

T he economic impact of the Internet is

6 | The Internet Economy in the G-20

Social networking penetration among Internet users (%) Size of Internet

China Heavy users of

Exhibit 3 | Developed Markets Score Significantly Higher in BCGs e-Intensity Index

BCG e-Intensity score

South Korea Denmark

The Boston Consulting Group | 7

Internet economy as a percentage of 2010 GDP

U.K. 2.3 8.3

Germany 3.3 3.0

8 | The Internet Economy in the G-20

GDP GDP CAGR

U.K. 2.8 12.4 10.9

Online retail as a percentage of total retail, 2016

The Boston Consulting Group | 9

A s significant as the GDP figures are,

10 | The Internet Economy in the G-20

Online retail and ROPO (research online, purchase oine), 2010

U.S. 252 482 734

Sources: Euromonitor; Google-TNS; BCG analysis.

Consumer-to-consumer Internet commerce is

The Boston Consulting Group | 11

C onnected consumers place a consid-

12 | The Internet Economy in the G-20

() (KRW (Rp thousands)

The Boston Consulting Group | 13

G iven their agility and ability to

14 | The Internet Economy in the G-20

(%) China Brazil India Turkey

The Boston Consulting Group | 15

No-Web Low-Web Medium-Web High-Web Brazil China U.K.

16 | The Internet Economy in the G-20

T he Internet will change even more in

The Boston Consulting Group | 17

18 | The Internet Economy in the G-20

GDP contribution 5 Manufacturing

The Internets Impact on Commerce in Argentina

Percentage of total advertising expenditures in 2010

Television Newspaper Out-of-home Magazine Radio Online Online

The Boston Consulting Group | 19