Amazon Eyes-up Emerging Markets for Next Growth Opportunity

Emerging markets offer Amazon Prime an untapped $70 billion revenue opportunity for OTT services according to a new report.

As Amazon has unveiled its latest revenue figures, a new report has revealed that engaging consumers in high growth markets could offer a $70 billion revenue opportunity to digital service providers. With the recent announcement that Amazon Prime Video is to be offered as a standalone service for the first time, and entry into the Indian market is on the horizon, attention is naturally turning to further expansion plans.

Developing markets offer an obvious route for growth for Amazon. However, as the findings suggest, in order to capitalise on this opportunity fully, the digital content provider must understand and address the intricacies of each market and adjust their business and delivery strategies, accordingly.

Moreover, MNOs must decide whether they are going to embrace Amazon if or when the Silicon Valley giant makes its moves, or whether they will try to resist the inevitable pressure it will put onto already over-stretched mobile broadband networks and the threat it poses to existing services.

The 2016 Developing Markets Mobile Commerce report reveals that despite Amazon Prime not yet being available in the markets questioned, if cost wasn’t an issue, almost one in five consumers would like to access the service, more than other digital content, via their mobile device. 87% of consumers make daily use of mobile devices for accessing digital services and 73% of respondents reported that they are willing to pay for high-value digital services via mobile devices.

These are encouraging signs for the digital content provider, but success in high growth markets will only be achieved if it develops an offering that is relevant to each particular market, ensuring content is affordable, accessible and localised.


The report reveals that the top factors that influence the decision of consumers in emerging markets to purchase a digital mobile service are pricing adjusted to local currency (88%) and low data charges (87%). The cost of streaming content on mobile devices is a challenge that Amazon, like Netflix, would need to understand and overcome if it expands to these markets. For some consumers, the cost could be more than double the service subscription cost for streaming a single episode alone.

Income and purchasing power of consumers also varies significantly, so digital content service providers need to adopt differential pricing strategies that reflect these discrepancies. They must also account for the cost of streaming video in markets where WiFi access is not prevalent. A typical 1GB data package costs around $15 a month in Brazil. For subscribers to Netflix, a single House of Cards episode streamed at standard definition can cost consumers $9.90 on top of their subscription to the service.


The stats reveal that 61% of consumers in the markets questioned feel unsatisfied with their current mobile connection, with 25% stating it is unreliable and 36% stating it is slow. As a result, over a third of consumers (40%) want brands to provide ‘lite’ versions of their digital services. The report goes on to show that digital services are being consumed through multiple routes when accessing content on their mobile devices (43% web browsers, 40% apps), highlighting how digital service providers cannot rely on apps alone to reach their target audience and should adjust to meet the specific needs of the consumers.

Localising content

The findings highlight that localisation of content is key for consumers in emerging markets; with over three quarters (76%) of those questioned wanting the digital services they consume to have a substantial local feel. In Brazil, video services are used by 62% of consumers, with 92% of respondents requiring at least a balanced mix between local and international content in their preferred streaming services. For Amazon, and other digital brands, it will be critical to understand what the local content needs are for each market and build a content portfolio that meets the consumers’ preferences in each country.

Commissioned by Upstream, a mobile commerce accelerator in high growth markets, the 2016 Developing Markets Mobile Commerce was conducted by YouGov and polled the views of a representative sample of 5,215 adults in Brazil, Egypt, Indonesia, Nigeria and South Africa.

Commenting exclusively to Developing Telecoms on the findings, Marco Veremis, CEO of Upstream said: "Amazon’s decision to offer Prime Video as a stand-alone service shows that digital content is of increasing importance to the e-commerce powerhouse. The announcement indicates that Amazon is sizing up to Netflix, and while Prime Video is only available in five western markets at the moment, if it wants to achieve further significant revenue growth, it should turn its attention to the next 3 billion consumers in emerging markets."

"Developing markets offer digital brands like Amazon a potential $70 billion market opportunity. Netflix has had a head start in terms of popularity and availability, but the increasing appetite for high–value digital services, combined with the vast financial opportunity means there are will be no shortage of competitors eager to engage consumers."

"In order to capitalise on this digital opportunity, tech giants like Amazon will require an adapted approach. A clear understanding of what consumers in developing markets want, their needs and the associated challenges, will enable digital brands to create an offering that is relevant to consumers in developing markets. Success comes down to three factors; delivering local content, making sure the total cost of ownership is affordable to the consumer and that digital services are technologically accessible."