For a number of years, the United States has been way ahead in the local mobile search space. But recent studies suggest that Europe — and other high-growth markets — will start punching their weight as less mature mobile infrastructures continue to evolve in coming years.
We recently culled data from more than 13 million users of our mobile shopping platform in six countries. Not surprisingly, because of its high saturation of smartphone users, the U.S. market reports the highest percentage (60%) of all our search traffic from mobile devices. We expect that to increase as smartphone sales continue to grow. Digital analytics firms are discovering similar trends.
According to a study by BIA/Kelsey, 12 billion searches — out of 30 billion overall mobile searches in 2012 in the U.S. — were in fact local searches. Last month the firm released a telling update to its “U.S. Local Media Forecast.” It reflected a nearly 50% split between local mobile search and local desktop search. This year the company’s analysts expect a true tipping point — with local mobile search for the first time surpassing those by desktop. And by 2016, local search will be moving even further into the streets, with local mobile expected to exceed desktop by more than 27 billion annual queries. Now that’s a lot of thumbs clicking away for things like restaurants, coffee shops, clothing stores, and the location of their friends, as they maneuver through the real world.
And that is good news for retailers and local businesses because as mobile local search queries increase so will related revenues including advertising and in-store commerce.
Developing Mobile Markets
In the U.S. the most obvious reason for the growth is the shift in how consumers access the Internet. This past January, for the first time, Americans used their smartphones and their apps more than they did their work and home Macs and PCs to surf the Internet. It wasn’t by a huge number (55% of all Internet traffic, according to digital measurement firm comScore), but it was significant.
That growth hasn’t been as rapid in other countries, but there is an apparent shift taking place. Our company, Bonial International Group and its subsidiaries including Retale in the U.S., indicate a much lower percentage share in several countries, but there is evidence suggesting that will soon change. For example, our mobile share in search traffic for Brazil is 22.96%. Although low, that has nearly doubled from the same period the previous year.
Those numbers are also due to increased smartphone use. Users in Brazil continue to grow, as nearly 16 million devices were purchased in 2012, and another 21 million bought last year. It was projected that about 67 million Brazilians utilized the mobile Internet that same year, according to Nielsen’s recent study Mobile Consumer: A Global Snapshot.
In countries where mobile device use has been steady over the last decade the percentages jump even higher. Our numbers show Germany and Spain both hover around 48%, France at 37% and Russia at 37%.
In Germany, while smartphone adoption is relatively high, privacy concerns over sharing location-based data over mobile has likely curbed some of the potential growth in local search. And the reason for the gap between Brazil, France, Russia and Spain, the U.S. and even Germany can be attributed to the lower-echelon countries just now hitting the “inflection point,” which signals to me that the mobile age on a global scale really is coming soon.
Take Brazil for example. The largest nation in South America has been saddled with import tariffs that have slowed down the rise of mobile significantly in recent years. The emotional price point for a smartphone is much higher than in more developed markets. However, expect a sea change of sorts when Apple’s primary device manufacturer Foxconn completes construction of the last of five factories in the South American nation, and planned infrastructure improvements spread throughout the massive country in preparations for next month’s World Cup and the 2016 Olympics.
The World’s Biggest Country
In terms of geographical size, you don’t get any bigger than Russia. And that hasn’t helped the country any when it comes to improving mobile infrastructure to many far-flung regions. While the Russian mobile Internet remains a few steps behind Western markets, it is rapidly growing, albeit this development is mostly centered on main city hubs. Moscow and St. Petersburg today account for 40% of all mobile Internet usage in the country, according to Anna Oshkalo of Russian Search Tips.
In terms of mobile share in local search traffic, the Russian market, led by Muscovites, has seen significant growth. According to Bonial data the percentage of local mobile search for Omerta (Bonial’s Russian platform) nearly quadrupled from 7.6 percent in April 2012, to 27.72 percent in February this year.
This is a significant step in a country where infrastructure improvements often face geographical and economic stumbling blocks.
The Mobile Tiger
Of course Asia is the elephant in the room. The continent today boasts 895 million web-connected mobile users compared to 460 million in all of the Americas, according to Google’s Asia Pacific blog. In the coming years the Asian mobile market is expected to only get stronger as more investments into infrastructure, combined with continued population swelling, will lead to increased opportunities to target consumers through local mobile search.
However, for many mobile-driven business models, entry into emerging markets like Brazil or Russia is becoming more and more attractive because of the currently low threshold of mobile adoption and planned infrastructure improvements.
It likely won’t take long until these emerging markets overtake the U.S., especially considering their lack of legacy infrastructure, and the steady push of smartphone and tablet manufacturers like Apple and Samsung into these regions. Expect these big players to keep up the drumbeat for growth in these markets.