woman walking in Vietnam
There is immense potential for brands to enter emerging markets. PHOTO: Dương Trần Quốc

Netflix recently launched Fast.com, a tool that lets users measure their internet download speed. The goal is to help consumers understand their internet quality and streaming rate.

This is a testimony to how brands like Netflix, which are impacted by the quality of high-speed internet, are struggling to deliver services when bandwidth quality is poor. Netflix is able to use Fast.com to turn the tables, shifting the focus from the quality of its streaming to the quality of connections.

The Need for Better Connections

This tool attempts to direct consumer attention to internet service providers (ISPs) when it comes to lagging videos, and gives consumers the power to pressure ISPs for better connections.

This is a particularly big challenge for brands in emerging markets with weak internet. By our own estimations, 87 percent of consumers are willing to pay for high value services. In fact, we predict, the next three billion consumers who embrace mobile in emerging economies could present a whopping $70 billion digital opportunity.

Reaching these regions over mobile is especially challenging. While 86 percent of people in emerging markets own cell phones, only 24 percent of them have internet-enabled smartphones. Despite the disconnect in reliable internet, brands have a tremendous opportunity, provided they develop strategies focused on making their services relevant in these regions.

worldwide internet use

The Internet Accessibility Challenge

Internet access goes beyond just being able to connect. It’s important to have the necessary speed to use services that should be available to everyone.

In many developed countries, enjoying high quality internet connection is as simple as picking up of the phone to access mobile services. However, this is not usually the case in emerging markets.

This can be threatening to brands that are providing digital services, like Netflix. Brands need to be responsive to unreliable internet services, and ensure people emerging markets can use their service, even with weak internet.

Addressing the Internet Accessibility Challenge

One option for brands is to consider offering ‘lite’ versions of their services. These lite services can lower the demand on mobile phones and alleviate the data usage of customers. It also better suits the infrastructure in emerging markets, where internet and download speeds lag.

Brands should also be aware of consumer preferences in terms of how they get their content.

Our research found that consumers in emerging markets mostly prefer accessing services on their mobile device using web browsers, followed by apps and SMS/MMS. Given this knowledge, brands need to consider creating services that are optimized for a browser experience.

Netflix could maximize adoption and user acquisition if it employed a dual app-web delivery strategy. Going through a browser allows those in emerging markets to avoid data-download costs of apps, and save memory and storage space on their phone.

By employing this strategy, brands can account for those users who prefer to enter through a browser, and reach an even greater audience.

Pricing for a Wider Audience

An additional challenge brands face in reaching their next 3 billion potential customers is the high cost of data usage in emerging markets.

In some places, Netflix customers may find it costs more to stream Netflix than the monthly subscription fee. To alleviate this, and the burden placed on ISPs, Netflix established Open Connect.

Open Connect is a content delivery network that works directly with ISPs to facilitate data distribution and lessen the data load. Netflix can continue to build this and work with ISPs to help alleviate the data cost to customers.

ISPs in emerging markets are typically the mobile network operators (MNOs), and therefore companies like Netflix need to partner with MNOs in order to drive down data costs. Brands in emerging markets should be cognizant of how much data their services consume and thereby are costing customers, and take steps to adjust pricing models to fit local needs.

The Potential of Emerging Markets

There is immense potential for brands to enter emerging markets, considering the desire to purchase digital services and goods amongst consumers in the region.

Brands need to be aware of the constraints both in pricing and accessibility in emerging markets.

By adapting their services for emerging markets, brands can better position themselves to gain access to the next three billion consumers and capitalize on the $70 billion digital opportunity in high growth regions.