Spotlight on Middle East & North Africa Thomas Chevanne Senior Director of Commercial Strategy & Partnerships A young and connected population: 65% under 35 years old MENA1 Total Population (m) and Under-35 Population (%), 2013–18 432.2 425.7 419.2 412.5 405.9 399.3 2013 2014 2015 2016 2017 2018 66.3% 65.7% 65.1% 64.5% 63.9% 63.2% Total Population Under-35 Population % Note: 1Calculated as aggregate of population of ‘Near East’ and ‘Northern Africa’ regions, as per US Census Bureau; Estimates start 2013 onwards Source: US Census Bureau, ‘International Data Base’ accessed in Nov 2014 Smartphone penetration: MEA highest-growth region globally MEA Smartphone Penetration MEA Mobile Data and Internet Traffic (PB (% of Total Mobile Connections) per Month) 30% 17% 7% 1,031 2011 2014E 2017E 106 2 2009 2013 2017E MEA highest-growth region globally over 2013–17E Source: Informa, ‘WCIS’, accessed in Oct 2014; eMarketer, ‘Smartphone Usage Soars Across the Middle East and Africa’, May 2014; Cisco, ‘Cisco Visual Networking Index: Forecast and Methodology’, accessed in Oct 2014 Consumers in the Gulf countries tend to spend more than US affluent shoppers in similar categories Average E-commerce Spend by Major Global Ranking of GDP per Capita 1 Category 1 Monaco 159 K Travel $1,521 $1,375 … … 4 Qatar 104 K CE/Comp $ 250 $ 155 … … . Jewelry $ 222 $ 163 7 UAE 71 K Event $ 201 $ 171 8 Kuwait 66 K Tickets … … Car $ 176 N/A 14 USA 53 K parts GCC vs. US Affluent Online Shoppers in USD 2 3 4 Consumers in the Gulf Countries count Gulf Online Shoppers tend to spend more among those with highest purchasing than US affluent shoppers in similar power categories Source: 1 CIA World Factbook; 2 PayPal Insights: E-commerce in the Middle East; 3 Emarketer, US Digital Travel Sales – Apr2014; 4 Martini Media Affluent Online Shoppers June 2013 People in MENA are frequent users of social media 71% of internet users in Key Social Media Channels in MENA1 MENA1 interact with their (% of Internet Users) friends via social media daily 91% 57% 37% 79% YoY 10 m 533 m increase in new users over tweets in users over Jan–May 2014 Mar 2014 May 2013–14 Note: 1As per a survey conducted over Mar–Apr 2014. MENA also includes Mauritania, Comoros, and Djibouti Source: Mohammed Bin Rashid School of Government, ‘Citizen Engagement and Public Services in the Arab World: The Potential of Social Media’, Jun 2014; Mohammed Bin Rashid School of Government, ‘The Arab World Online 2014: Trends in Internet and Mobile Usage in the Arab Region’, May 2014 OTT apps: Highest Whatsapp Penetration Globally Communication-based apps are the most popular1 apps in the Middle East 68% of mobile ~37 m users in the Fastest-growing app internet users in MEA Middle East (12.3% in the UAE and (highest penetration of global users) Saudi Arabia globally) 77% show interest in using these apps and 58% use them on a regular basis Note: 1As of 2013; 2As of Q1 2014; 3Feb 2014; 4By user base over Q1 2013–14. UAE (2716%) and Saudi Arabia (320%) Source: European Travel Commission Digital Portal, ‘Mobile Apps’, accessed in Oct 2014; Global Web Index, ‘WhatsApp usage highest in LatAm and MENA’, Q1 2014; Media Nama, ‘Viber Sold for $900 M; Has 105M Monthly Active Users’, Feb 17, 2014; Lighthouse Insights, ‘WeChat is Fastest Growing Chat App Globally between Q1 2013 and Q1 2014’, accessed in Oct 2014 MENA is ranked second globally in terms of video consumption on YouTube 91% of the internet users in MENA1 are registered on YouTube Ranked 2nd 22 285 m views in YouTube recorded daily video consumption globally Regional Leaders 2 hours of videos uploaded KSA Egypt UAE per minute Note: All data, except survey data, as of 2013. 1As per a survey conducted over Mar–Apr 2014. MENA also includes Mauritania, Comoros, and Djibouti Source: Social Media Chimps, ‘Social Mesia Usage in the Middle East and North Africa in 2013 [Infographic]’, Feb 8, 2014 Mobile content leads the way and games dominate 60% 50% Top app genres in Middle East vs global average 40% Middle East 39% 36% 30% 33% 20% 25% 21% 20% 20% 18% 18% 18% 17% 10% 15% 15% 12% 11% 9% 8% 0% MENA mobile internet users are avid consumers of online games, video, and music Most Downloaded Content on Mobile Revenues ($ m) from games, video, Phones (% of Mobile Internet Users1) and music are on the rise in MEA CAGR 2011 2014E 2017E (2014E–17E) 1 Games 65% 1,206. 328.0 628.0 24.3% 0 1 Video 51% Music 44%1 2.1 32.7 253.6 97.9% 148.0 252.0 427.0 19.2% Note: 1As per a survey, dated Nov 2013, conducted across 2,500 users Bahrain, Iraq, Jordan, Qatar, Saudi Arabia, Turkey, and UAE Source: Vserv.mobi, ‘Mobile Internet Consumer - Middle East’, Nov 19, 2013; Ovum, ‘Digital Games Forecast: 2013–18’. November 2013; Informa, ‘OTT Video Revenue Forecasts: 2008–2017’, September 2013; Ovum, ‘Digital Music Forecast: 2012–17’, July 2012 Payment infrastructure needs to be developed to capture mcommerce growth Payment method biggest barrier for e mMoney developing strongly commerce adoption MENA & Sub-Saharan Africa account for… 1. 2% of the population use credit cards. Ecommerce in …58% of global mMoney the Middle East relies mostly on deployments1… cash on delivery. 2. 82% of the population remain …66% and 73% of global unbanked. Middle East internet registered and active accounts, users fear fraud and mistrust respectively,1… online payment. 3. Lack of support of local currencies is a common …77% (=$5.7 bn) of issue reported by customers global transaction value2 Note: 1Value as of Dec 2013; 2Value as of Jun 2013; 3MENA includes Kingdom of Saudi Arabia (KSA), Qatar, and United Arab Emirates (UAE) Source: PayPal Insights, ‘e-commerce in the Middle East: 2012-2015’, Sep 2013; GSMA, ‘Operators commit to accelerate interoperable mobile money services across Africa and the Middle East’, Apr 30, 2014 Arabic Language: Now Ranked 4th By Number Of Users On The Internet Arabic Language Users on the Internet Online Use of Arabic in MENA 135.6 m 73%2 of tweets are 65.4 m Arabic 2013 2010 17%2 are 7 Rank1 of Arabic 4 on the Internet English 37% of MENA Internet users not satisfied with the amount of online Arabic content Note: 1Rank of Arabic language by users; 2As of 2014 Sources: Internet World Stats, ‘Internet world users by language’, Oct 30, 2014; Wayvs ‘Social Media in MENA’, May 15, 2014; The Middle East Magazine and Accredited Website, accessed on Oct 30, 2014; Company Websites However, there are only a few MENA-based social networks/content providers offering localized content Global Social Media Platforms / OTT Apps Available in Arabic Language Local Content Providers in MENA Region >35,000 >1 million Aims to increase online Offers localized subscribers in the downloads in Arabic social games Middle East1 Saudi Arabia2 content Note: 1As of Mar 2014; 2As of Jan 2014 Source: The Wall Street Journal, ‘Streaming: Videos, On Demand in The Middle East’, Mar 19, 2014; Wamda, ‘Anghami launches 'industry disruptive' $1 music streaming service’, Jan 30, 2014; GamaSutra, ‘Peak focuses on Arabic social games with Saudi studio acquisition’, Feb 21, 2012; The Next Web, ‘Taghreedat launches Arabic Wikipedia Editors Program in cooperation with the Wikimedia Foundation’, May 20, 2012 .