April recap: bird’s-eye view of the digital industry

April recap: bird’s-eye view of the digital industry

We are kicking off May with a look back on last month’s biggest news. If you want to find out what happened in payments, e-commerce and digital content during April, take a look below.

Fortumo in the meanwhile has published the latest update to our payment index, which shows strong growth for carrier billing in Asia. If you want to grow your own presence in the region, make sure to also check out our recent blog posts on improving conversion and pricing of your digital services.

General mobile

Payments

E-commerce

Digital content

Gaming

6 tips for getting started with localised service pricing

How to localise digital service pricing?

The digital audience used to be located in North America and Western Europe as most of the world’s population with access to the internet was located here. Today, the US has fallen behind China and India in smartphone ownership, and there are 2x more smartphone users in Indonesia than people living in the UK.

A major problem for digital merchants with this new audience is pricing. In Indonesia, average monthly earnings are $183 compared to $3,692 in the United States. The pattern is similar for most other emerging markets. With users having much less disposable income at their hands compared to Western audiences, how to localise your pricing for the market?

Here are 6 practical ideas on how to get started:

Purchasing power parity

Basing local pricing around average income is too drastic and would lead to 20x lower pricing for Indonesia compared to the US. Average income statistics also represent the entire country’s average, including people in rural areas less likely to have internet access and be a user of your service. Instead, consider checking out the Big Mac Index which gives a better indication of the purchasing power parity between different countries and tweak your pricing based on that.

Competitor pricing

Having competitors operate in the same market with you is a two-sided coin. On one hand, it will be tougher to capture the audience they are also targeting. On the other, it’s possible that they have already done the pricing research on your behalf. For reference, here’s how Spotify and Netflix have localised their pricing strategy.

Insights from payment providers

Payment processing companies that you work with will have a very good understanding of user payment behaviour in markets where they operate. Reach out to them and ask what the average transaction size and revenue per user for your segment in countries relevant to you are. In case of carrier billing, our data map provides an overview of general trends with this payment method.

Painted door tests

An efficient method that requires very little upfront research for understanding whether local pricing is needed is a painted door A/B test. You can display your current pricing to 50% of users in a country, and localised pricing (for example in the context of a “discount campaign”) to the other half. If users do click on the local pricing, you can have a note saying “sorry, this package is not available yet”. Should the conversion of the local price offer see bigger uptake, it makes sense to dig deeper into analysis.

Bite-size chunks of content

For companies that have the capability to break their service up into smaller parts, local pricing may not even be needed. For example, if you’re selling monthly subscriptions, there is the option to create daily packages with a substantially cheaper price. Another way to do it would be to sell individual movies, TV shows, songs or albums as one-off purchases. While the total cost of the service remains the same, the user perception of pricing will improve and they will think the service is more affordable to them.

Not just local pricing!

Last but not least, localisation does not only include changing the price of the service. The currency which the user can pay in should also be that of the local country, and you should also account for the difference in how numbers are displayed and punctuation is used.

Need more guidance on how to localise your pricing for emerging markets? Get in touch!

Emerging Markets Payment Index: Q1 2018

Emerging Markets Payment Index: Q4 2017 update

Our latest report is intended to be used by digital media companies for benchmarking their revenue in markets with high smartphone growth and low credit card penetration.

The Emerging Markets Payment Index focuses on countries highlighted by GfK in its global forecast as the largest tech device growth markets. These countries are India, Nigeria, Pakistan, Vietnam, Brazil, Egypt, Indonesia and the Philippines.

These markets differ significantly from mature Western countries, where the current user base of most digital merchants is located. The main trends in the industry driven by these countries are:

  • Emerging regions drive new smartphone adoption, while sales in mature markets decline
  • Mobile data consumption in these regions is growing faster than in mature markets
  • Service quality on mobile needs to equal desktop, as emerging regions are mobile-only
  • merging markets have tipped web usage in favour of mobile devices

As a result, digital merchants who want to sustain their user base and revenue growth need to focus on these countries, but do so through a customized, localised approach to user acquisition, monetization and retention. The Emerging Markets Payment Index provides an overview data that merchants can use to account for of the individualities of these fastest growing mobile markets of the world.

The payment index aggregates data from all platforms (web, mobile web, feature phones, smartphones, smart TVs) and app stores connected to Fortumo’s carrier billing platform.

How to increase payment conversion?

March overview: what happened in the digital ecosystem?

Growing the percentage of successfully paying users is one of the most important goals for any digital and e-commerce business and its importance as a key performance indicator keeps growing. Better payment conversion means more users, more revenue and lower average customer acquisition costs. But how to get more people to make payments?

One way how to approach the challenge of improved payment conversion is to put yourself in the customer’s shoes and separately, to analyze the data that you have on them and iterate on that. What is preventing them from making the payment and can that reason be resolved?

Below we have brought out a few ideas for benchmarking your payment service so you can make sure you’ve covered all angles with your payments strategy.

Read more »

March overview: what happened in the digital ecosystem?

March overview: what happened in the digital ecosystem?

Hope you managed to get through the first day of April without too many pranks. Time to get back to serious business! Below you can find an overview of the biggest news stories from the digital ecosystem in March.

Though not technically from March, the biggest story of the past period was undoubtedly the IPO of our good partner Spotify: congratulations! On our side, we shed some light on the digital ecosystem of Central & Eastern Europe. Check it out!

For other major stories, continue reading:

General mobile

Payments

E-commerce

Digital content

Gaming

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