Enjoy a 15% discount on all purchases until the 31st of March 2023 using the promo code EOFWEB22 at check out!

Retail and E-Commerce Our experts provide analysis on the retail industry, featuring insights from a local to global level on where and how consumers will shop across both traditional and emerging retail channels.

Emerging Markets Tech: Top 3 Struggling Digital Economies of 2015

Euromonitor International Profile Picture
Euromonitor International Bio

Developing economies are almost always more attractive as digital growth markets than advanced markets, yet emerging countries are also more vulnerable to economic and political shocks. Despite much early hype, three markets have suddenly become less attractive in 2015 for the consumption of digital goods and services: Russia, Brazil and Venezuela. Hit by various socioeconomic problems, local consumers in these markets are downgrading their purchases of smartphones and online services, while financing for digital start-ups has largely dried up. However, this could be an opportune time for cost-conscious products.

GDP Growth and Total Telecom Revenues in Russia, Brazil and Venezuela: 2015


Source: Euromonitor International from International Telecommunications Union (ITU)/national statistics/Eurostat/OECD/UN/International Monetary Fund (IMF),World Economic Outlook (WEO)

Note:  All figures are forecast

1. Russia: Ukraine crisis and falling oil prices inflate costs of foreign electronics

Up to 2014, Russia was the standout emerging market in Europe for digital products. Local consumers are IT-savvy and place a premium on communications, with upmarket brands such as Apple in particular demand. However, the outbreak of the Ukraine crisis in early 2014, a prolonged and simultaneous collapse in oil prices (to which the hydrocarbon-driven economy is especially vulnerable), and a sudden devaluation of the rouble have taken a heavy toll on the information and communications technology (ICT) market.

The impact:

  • Capital investments in telecoms will decline by 11.8% in real annual terms in 2015, as government revenues have been hit by falling oil prices and major telecom projects are placed on hold;
  • With consumers focusing on necessities, purchases of telecom goods and services have taken a backseat. In particular, the rouble devaluation has meant that foreign brands, such as iPhones for example, have double in price. As a result, total telecom revenues will contract by 9.6% in annual real terms in 2015, the biggest decline since the 1990s;
  • In this unsure climate, companies are cutting their advertising budgets. All advertising segments are set to take a hit as total adspend in Russia will decline by 22.0% in real annual terms in 2015;
  • However, the one bright spot on the market is e-commerce, which still continue to grow as income-squeezed consumers come online to find bargains. Internet retailing value is set to expand by 14.6% in real annual terms in 2015.


2. Brazil: Worst year for communications expenditure on record

Once the shining beacon of emerging market growth, Brazil. With corruption scandals plaguing a stricken government, consumer confidence has plummeted. The country continues to demonstrate strong growth in indicators such as Internet usage and mobile subscriptions, but consumers have slowdown down spending on tablets, smartphones and other telecom devices.

The impact:

  • Consumer expenditure on telecom equipment is to decline by 3.7% in annual real terms in 2015, the biggest annual decline on record. The volume of smartphones sold will slow down considerably, though stills represent a growth of 23.9% annually;
  • Meanwhile, consumer expenditure on telecom services will see its first annual decline in history (of 0.7% in real terms), meaning growth in markets such as pay-TV and fixed broadband plans will be impacted;
  • However, unlike a Russian market that has been abandoned by foreign investors, Brazil continues to attract sizable investments in its tech industry. Start-ups are thriving and venture capitalists believe the market will rebound yet.


3. Venezuela: Digital services collapsing amidst crisis

Following several years of stable economic growth, Venezuela has been engulfed by a huge recession. A forecast real GDP contraction of 7.0% in 2015 is set to be one of the world’s heaviest economic declines. The collapse is far reaching and has paralysed numerous government services that have supplied much of the country’s telecom sector. Venezuelans are even struggling to call abroad since local telephone carriers have fallen behind on payments to their international partners. The country’s heavily subsidised broadband Internet programme in rural areas is also on the verge of closure.

The impact:

  • Venezuela will see one of the largest declines in telecom revenues globally in 2015 at almost 50.0% in real annual terms, which will surely bring most telecom companies close to bankruptcy;
  • The retail volume of smartphones in the country will almost halve in 2015 from their 2014 total, while mobile telephone subscriptions will largely stagnate;
  • Surging inflation means few foreign digital goods are affordable to Venezuelans, which will spawn an industry of ultra-affordable mobile phone and tablet models coming in from China or India.
Interested in more insights? Subscribe to our content

Latest Insights

Loyalty and the New Normal

Nadejda Popova 16 March 2023

Four Ways Tech is Transforming Social Media

Rabia Yasmeen 14 March 2023

Euromonitor to speak at Shoptalk Europe 2023

Euromonitor International 13 March 2023

Mastering E-Commerce Growth: How to Win Online Amid Uncertainty

Euromonitor International 09 March 2023

New Retail Summit

Euromonitor International 07 March 2023

Shop Our Reports

New Concepts in Retail

Retailers are pushing the boundaries of innovation. Euromonitor International’s annual New Concepts in Retail report highlights how these efforts are reshaping…

View Report

Global Inflation Tracker: Q1 2023

This report examines inflation levels and drivers globally and in key countries. In 2023, global inflation is expected to ease from its peak in 2022, but…

View Report

Top Five Digital Consumer Trends in 2023

Now in its seventh edition, this report explores the top digital shopper trends that will redefine commerce the most in the year ahead. Some of the trends…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More