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Mapping the digital behaviour of emerging market consumers

  • Social media is the go-to online activity for emerging market individuals, particularly on Facebook's platforms

  • The penetration of digital financial services lags other sectors, pointing to a clear growth opportunity for fintechs

  • Post-pandemic changes: More work from home and digital payments. Flights and public transport are back on the agenda

Mapping the digital behaviour of emerging market consumers
Rahul Shah
Rahul Shah

Head of Financials Equity Research

Rabail Adwani
Rohit Kumar
Tellimer Research
16 October 2021
Published byTellimer Research

What are emerging market consumers doing when they are online? And what pandemic related behavioural changes are likely to persist over the long term?

To answer these questions, we surveyed 900 individuals across 14 emerging markets...

Social media is the go-to activity when consumers are online

Two-thirds of our respondents access social media at least daily; very few emerging market adults are not plugged into their social media accounts. As we have highlighted previously, Facebook (together with its sister platforms WhatsApp and Instagram) dominates this space, with other global platforms (from Google, TikTok, Twitter, etc.) coming in a distant second, and local platforms having a minimal presence.

Digital payments seems to be well-entrenched. Purchasing goods and services form the third group, while financial services activity (other than payments) comes in last. Tellingly, over one-quarter of our sample has yet to use online financial services for products such as loans, investments or insurance.

Digital activity in emerging markets

Country-level findings

Looking at our results by country (versus the EM average), we make the following observations:

Brazil: Versus their EM peers, surveyed Brazilians are more likely to use a credit/debit card and less likely to trade cryptocurrency.

China: Digital insurance and lending products are more popular than elsewhere (which is good news for Ant Group and Waterdrop, for example). Social media use is less pervasive.

Egypt: Social media use is higher, but digital bill payments and transfers are less frequent. This signals a big growth opportunity for operators like e-finance and Fawry.

India: Digital loans and online investing are more popular than elsewhere; social media use is more limited.

Indonesia: Ride-hailing and online food deliveries are more popular than in other surveyed markets (which is positive for Grab, among others). Credit/debit card use is less popular.

Kenya: Unsurprisingly, given the success of M-Pesa, digital money transfers and bill payments are made more frequently than in other EMs. Online food delivery has yet to fully catch on.

Mexico: Card usage and ride-hailing are more popular than in other EMs. Cryptocurrency trading is less frequent.

Nigeria: Digital money transfers and crypto trading are more popular than elsewhere. Online food deliveries and digital loans are not so popular.

Pakistan: Digital activity, in general, is lagging other EMs, particularly for online trading/investment and insurance.

Philippines: Digital activity is the lowest in our surveyed markets. Card usage, online bill payments and ride-hailing are key shortfall areas.

Russia: Russians also tend to be less active online, notably for crypto trading.

South Africa: Social media usage is higher than in other surveyed markets, but digital loans and insurance are less active areas than in other markets.

Vietnam: Online activity in Vietnam is the highest of our surveyed markets, notably online insurance, food deliveries and ride-hailing, which again plays into Grab and Gojek’s hands.

Digital activity ranking of our surveyed emerging markets

We summarise additional country-level conclusions in the Appendix, below.

The post-pandemic landscape in EM: The behavioural changes that will stick, and those that won’t

We have all had to make significant behavioural changes in the face of the Covid pandemic. We asked our respondents which of these changes they were likely to maintain over the longer term, which could have major ramifications for the investment outlook.

Most recipients indicated they will continue to work from home, which carries significant implications for the commercial real estate and transportation sectors, for example. A majority also signaled a continued preference for non-cash settlement – good news for digital payments firms and card issuers. E-commerce is likely to continue its upward march, while take-out rather than dine-in also appears to be an entrenched behavioural shift. Both trends signal negative undercurrents for the emerging market high street.

Where respondents point to a less profound shift are a willingness to go back to public transport and to start making international journeys. Airlines and tourist destinations can breathe a sigh of relief!

Expected long-term post-pandemic behavioural changes

Country-level findings

Digging deeper into our results to draw some country-level conclusions, we highlight areas where the behavioural shift is likely to be more or less profound than elsewhere:

Brazil: The country is likely to see a bigger shift towards e-commerce than other surveyed markets (which is good for MercadoLibre, for example).

China is much less likely to see a wholesale transformation to working from home, while online deliveries and exercise will experience bigger positive shifts than elsewhere.

Egypt: A move to working from home could be more pronounced than in other markets.

India will see a substantial shift towards e-commerce, according to our survey respondents.

Indonesia will experience a more pronounced migration towards working from home, but the trend towards food deliveries will be less evident.

Kenya: Fewer Kenyans than elsewhere will make the shift to working from home permanent, but more are likely to exercise.

Mexico will see a bigger-than-average shift towards streaming movies, and a smaller move towards card usage (already high) and e-commerce.

Nigeria will see a bigger shift towards using cards and mobile wallets, while the move to e-commerce will be less pronounced (which is, on the face of it, bad news for Jumia, although it is active in many other African markets and the secular trend is still positive).

Pakistan is more likely to embrace home working than other surveyed markets. But food deliveries and video streaming could see a less pronounced shift than elsewhere.

Russia could see a smaller boost to card usage and e-commerce than other markets. There is likely to be a bigger shift in video streaming, and below-average appetite for big-crowd events like concerts.

Saudi Arabia is likely to see more avoidance of big crowd events (sports, music) than other surveyed emerging markets.

South Africa will see more pronounced growth in food deliveries, but less interest in working from home and e-commerce.

Vietnam: The shift towards home working and avoiding large crowd events is likely to be less pronounced in Vietnam than elsewhere. But respondents are more likely to order food deliveries and avoid international flights.

We present a more detailed summary of our country-level findings in the Appendix, below.


Digital behaviour: country differences

Post-pandemic behavioural changes: country summary