In many ways, the newest Financial Times story about the growing digital markets of the world echoes sentiments we know already. ‘Look East’ and don’t ignore both the predominance of China and the growing potential of Asia as a whole, especially India. With digital growth inextricably tied to the growth of mobile and mobile gaming, we're going to hone in on the key points brought up in this article. The Financial Times predicts, in a report partnered with Omdia, that, by 2026 the top three fastest-growing digital economies will be Vietnam, Mexico and India on their 'Digital Economies' chart. For reference, the current order is India, Vietnam and Israel, with Mexico just out of the top 10.
China is of course predicted to slump as other outlets have been saying, although FT and Omdia predict it as more severe, with China dropping right out of the top 10 fastest-growing digital economies. Although it remains forecast to stay near the top, in a top 20 position. The article also points to numerous interesting factors that play into China's shifting role “it has the highest number of both music and video streaming subscriptions, with the latter projected to exceed 500mn by 2026, and has by far the most cellular ‘internet of things’.”
What’s changing and what are the risks?
As the article notes, China remains on top in terms of a digital economy based on its previously mentioned 'internet of things' with a myriad of services all net-based. It’s why China remains the king of mobile games as well, despite India being poised to overtake it in terms of raw user numbers. However, as they point out, and has been predicted by other outlets, China is looking at a significant slump for mobile growth and digital more broadly. This means the meteoric growth they’ve relied upon to continue building massive mobile and game companies like Tencent and Netease may be coming to an end.
Seeing Slovakia and Saudi Arabia shoot up the rankings is also interesting. Saudi Arabian businesses and the government will be pleased to see their efforts to digitise and diversify the economy pay off, whilst Eastern Europe has been a highly potent market for many years now. With studios like Pixel Federation seeing success in growing and monetising their mobile titles.
The top three digital markets chart isn't exactly surprising, as India’s increasing digitisation opens up a brand new massive audience, although China's growth is set to plummet it's predicted to remain the largest digital market. Meanwhile, if we look back at the fastest-growing digital economies, Vietnam forms part of the growing South-East Asia market, which as the FT and Omdia point out, sees the highest rate of fibre broadband anywhere in the world. Mexico is an interesting addition, however, as it represents a significant upset to the rankings with the country shooting up from sub-10 to third on the list.
The FT also points to previous issues we’ve covered such as strict regulations in China that are stifling growth during difficult economic times. Although they do not restrict this criticism just to China, as they point out that legislation such as Vietnam insisting user data remains stored in-country requires significant domestic investment in offices and servers.