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November 23, 2011

7 Surprising Facts About Internet and Emerging Markets

With rising wealth in emerging markets in recent years, people in China, India and Brazil have quickly acquired a taste for mobile phone and Internet technology. The industry in developing countries is in its infancy but growth has been swift. Below are seven surprising facts about this fast-growing emerging market trend:

1. Only 35 percent of the world’s population uses the Internet today. Yet, of those on the Web, the majority currently lives in a developing country.

2. China has the largest number of Internet users—485 million to be exact—but this is only one-third of the country’s population. After the U.S., India comes in third with 100 million users, but this is less than 10 percent of its population. Brazil holds the number five position with nearly 76 million users—only one-third of its population.

Internet Penetration Rate Remains Low for Many Emerging Markets
3. The adoption of smartphones is expected to grow rapidly in emerging markets. According to Bloomberg News, within a four-month timeframe, five million Chinese bought Apple’s iPhone 4 from China Mobile. The company plans to have 1 million new Wi-Fi hotspots across China over the next three years, says Bloomberg, so the consumer can surf the Web via Wi-Fi without having 3G access.

4. Ninety-seven percent of all households in the Republic of Korea can connect to the Internet. The country also has the highest mobile-broadband penetration worldwide. United Nations specialized agency ITU says that implementing policies have made the Republic of Korea an “IT powerhouse.”

5. The U.S. isn’t the only fan of Facebook. Although Americans overwhelmingly make up the majority of Facebook users, Indonesia has the second-highest number of members, with 40 million accounts. India, Turkey, Brazil and Mexico have more than 30 million members each, according to CLSA Asia-Pacific Markets Research data.

6. In addition to keeping the world connected to friends and family, the Internet is also a driver of economic growth. Through e-commerce, almost $8 trillion exchange hands each year, says McKinsey Global Institute in its new report on the impact of the Internet. McKinsey says the Internet has made a significant contribution to world GDP growth. Over the past five years, if you combine advanced economies and China, India and Brazil, the Internet has contributed to 11 percent of GDP growth.

7. The Internet has also played a huge role in the Middle East protests. Read a previous post where we ask if theInternet is the Land of the Free?

About The Author - Frank Holmes is CEO, Chief Investment Officer of U.S. Global Investors and the co-author of The Goldwatcher  (EconMatters author archive here.)

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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