Russia: The Unknown Internet

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Russia: The Unknown Internet

  1. 1. Russia: The Unknown Internet April 2014
  2. 2. About Hermes
  3. 3. Hermes NexTec – e-commerce projects development for clients: platform, logistics, payments, digital marketing, client support services, etc. • Hermes NexTec countries of operation: the EU, USA, China, Brazil, Russia. – Launching e-commerce projects for global brands in the Russian Internet. • The unique e-commerce experience of Otto Group & Hermes.
  4. 4. Clients of Hermes NexTec EU USA Brazil China Russia
  5. 5. Content • Internet-addicted • No more growth of Internet audience? • Internet audience growth: new paradigm • Unknown Internet users: who are they? • Children of Internet Age • Elderly in Internet • Internet speed measurement: megabytes vs. megabits • Russia’s broadband connection: here and there • Mobile Internet: might be better • Russia: more Internet devices than residents
  6. 6. Monthly, Weekly, Daily Audience • Through the last 6 years the difference between daily, weekly and monthly Internet audience has almost faded away 53 63 66 Daily Internet Audience Weekly Internet Audience Monthly Internet Audience mln, 2014 year Source: TNS, FOM
  7. 7. Caught in Web THROUGH SOME YEARS THE INTERNET HAS BECOME THE DAILY LIFE PHENOMENON, IT’S NOT LONGER AN EPISODIC ONE IF SOMEONE USES THE INTERNET, HE DOES IT EVERY DAY. 80% OF THE INTERNET AUDIENCE DO IT DAILY.
  8. 8. Russia’s Internet Audience: No Growth Any More? • FOM and TNS show the same picture: there is no growth of Internet audience in Russia through the last year (Winter 2013 – Winter 2014) • This phenomenon is typical for Russia in general and for major cities in particular. Source: FOM, TNS
  9. 9. That Will Do OBVIOUSLY THE PREVIOUS GROWTH DRIVERS OF INTERNET AUDIENCE RUN DRY CITIES ARE ‘FED UP’ WITH THE INTERNET. NOW THE GROWTH IN QUALITY RATHER THAN IN VOLUMES IS POSSIBLE HERE
  10. 10. Data Sources & Measurement Specifics • TNS Web Index – panel study. Cities with population 100k +, age 12-64. Selection = 20k participants* • FOM – representational survey. Population under research – Russians, age 18+. Selection = 30k persons** http://www.tns-global.ru/services/media/media-audience/internet/description/ http://runet.fom.ru/ * Children Youngsters Rural population Aged Small town residents **
  11. 11. Growth Drivers GROWTH POTENTIAL: COUNTRYMEN AND SMALL TOWNS RESIDENTS, KIDS AND YOUNGSTERS, AGED PEOPLE THE CATEGORIES MENTIONED ABOVE ARE NOT WELL-STUDIED WHILE THEIR VOLUME AND INTERNET PENETRATION GROWTH RATE ARE SUBSTANTIAL
  12. 12. Unknown Internet Users
  13. 13. Difficult and Not Interesting Yet • Kids (3-12), aged people (64+) and countrymen are not attractive for the advertisers in the Internet yet. • These population categories are highly specific and difficult to study.
  14. 14. One Doesn’t See Them THESE AUDIENCE SEGMENTS ARE DIFFICULT TO SURVEY, BUT IMPOSSIBLE TO IGNORE NEARLY 20 MLN OF THE INTERNET USERS ARE NOT TAKEN INTO ACCOUNT IN STANDARD SURVEYS
  15. 15. «Invisible Users» of the Internet Kids 3-12 yo 13 mln 5 mln use the Internet Countrymen 37 mln 13 mln use the Internet Aged 64+ 19 mln 4 mln use the Internet Source: Rosstat, Hermes NexTec Russia, experts estimates, TNS, FOM
  16. 16. Kids in the Internet The Internet penetration, kids & youngsters 0-15 yo, Russia, 2013, % • In the early childhood (up to 6 yo) not more than 10% of kids use the Internet • The breakdown occurs during the growing age when the share of teenagers using the Internet sharply increases – form 35% up to 72% • According to TNS for cities with population 100 000+ the share of the Internet users among 12-17 yo is 98% Source: Hermes NexTec Russia, eMarketer, TNS, experts esimates yo yo yo yo yo
  17. 17. Children as the Internet Future CHILDREN 7 YEARS+ BECOME THE MAIN LONG-TERM DRIVER OF THE INTERNET AUDIENCE GROWTH OBVIOUSLY THE AGE OF INTERNET USAGE FOR KIDS STEADILY DECREASES. THERE ARE 5 MLN CHILDREN (3-12 YO) IN RUSSIA WHO ALREADY USE THE INTERNET
  18. 18. Internet for 64 yo+ • A share of the Internet users for female and male Russia’s population among all age categories is quotable. Though within the category 64 yo+ gender differences are significant: only 12% women and above 28% men are the Internet users. Source: TNS
  19. 19. Internet for Aged AGED PEOPLE CATEGORY IS THE LESS ACTIVE PART OF THE INTERNET AUDIENCE, BUT THERE IS A POTENTIAL THERE ARE 19 MLN PEOPLE 64YO AND ABOVE, 4 MLN OF THEM – ARE ALREADY INTERNET USERS. YOUNGER PEOPLE (USUALLY CHILDREN AND GRANDCHILDREN) HELP THE AGED TO GET FEEL OF THE INTERNET
  20. 20. Add-On: Internet Speed in Russia
  21. 21. Measuring the Internet Speed MEGABYTE DIFFERS FROM MEGABIT EIGHTFOLD THE TYPICAL MISTAKE IS TO THINK THE INTERNET SPEED IS MEASURED IN MEGABYTES PER SECOND
  22. 22. Internet Speed: Megabytes vs. Megabits • 1 byte = 8 bits. It means if the announced Internet speed is 10 Mbps then the data transferring speed is 1,25 megabyte per second. • Thus the file of 1 Gb size can be downloaded in 13,7 minutes.
  23. 23. Broadband Internet Connection • The average broadband Internet speed in Russia is quite comparable to the leading European countries – Germany, France, UK. In absolute terms it is 21,6 Mbps • The price of 1 Mbps decreased by 28% in a year and now equals $1,05. The Internet price in Russia is extremely reasonable – the 6th place in the world (among 100 countries surveyed). Mbps Russia 21,6 Germany 25,8 Spain 20,3 Italy 8 Sweden 41,9 UK 24,5 France 26,9 Ukraine 20,2 Poland 19,3 Hungary 24,6 Austria 19,8 Nerherlands 40,1 Czech Rep. 24,6 Source: NetIndex
  24. 24. Fast Internet RUSSIA HOLDS THE 34TH POSITION AMONG 189 COUNTRIES BY BROADBAND INTERNET SPEED THROUGH THE LAST YEAR (MARCH 2013 – MARCH 2014) THE AVERAGE BROADBAND INTERNET SPEED IN RUSSIA INCREASED BY ALMOST 18%
  25. 25. Mobile Internet: Could Be Better • The average speed of the mobile Internet in Russia in absolute terms reaches 5,5 Мbps • In a global ranking of the mobile Internet speed Russia holds the 59th place among 105 countries Mbps - mobile Russia 5,5 Germany 9,9 Spain 9,9 Italy 6,9 Sweden 13 France 15 Poland 6,8 Source: NetIndex
  26. 26. Mobile Internet RUSSIA HOLDS THE 59TH PLACE IN A GLOBAL RANKING OF THE MOBILE INTERNET SPEED AMONG 105 COUNTRIES THROUGH THE LAST YEAR (MARCH 2013 – MARCH 2014) THE AVERAGE SPEED OF THE MOBILE INTERNET INCREASED BY 2,8 TIMES
  27. 27. Internet Devices in Russia and Across the Globe 3,6 5,7 3,1 6,3 The number of the Internet devices per 1 household, pcs. Russia USA UK France Source: Kaspersky Security Network, Ofcom, Gfk, NDP
  28. 28. The Internet in Devices THERE ARE ABOUT 150 MLN DEVICES WITH THE INTERNET ACCESS IN RUSSIA AT THE SAME TIME JUST 1 MLN RUSSIANS SURF THE INTERNET WITH THE HELP OF MOBILE DEVICES ONLY
  29. 29. Head of Internet Marketing Oleg Zhukov Oleg.Zhukov@hermes-europe.de Phone: +7 (495) 775-86-87 ex.1176 https://www.hermesworld.com

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