Our Analysts' Insights

Enterprises looking to extend their international footprint face many challenges. Selecting the languages that will give them the best market opportunities is one of these. Every year CSA Research publishes a ranking of the top online languages as determined by their economic opportunity (eGDP). Although this listing – based on macroeconomic factors – is a good predictor of overall investment, the choices individual organizations make are more complex. Some of the considerations they need to account for include the following:

1. Individual buying power. Not all of the languages in CSA Research’s rankings have equal per-capita buying power. For example, Simplified Chinese comprises 19.4% of global eGDP, but has a relatively low per capita figure (approximately US$9,500). Compare this to German, which comprises 2% of the online opportunity, but has a per capita amount of approximately US$51,500. Which of these makes more sense for a company? It really depends on the average selling price of its items and the number of people who can afford them. Those that rely on selling large amounts of lower-margin items will find Simplified Chinese the better option, but those that aim for fewer, much more expensive, items should target German.

2. Regional proximity. CSA Research has consistently found that official languages of the European Union appear much more frequently on major brand websites than their economic potential might suggest. For example, Hindi has more than double the eGDP share of Romanian (0.58% versus 0.26%) and almost 12 times the online audience (4.5% versus 0.39%). However, Romanian appears almost three times more frequently on major brand websites (6.0% versus 3% of sites). Although various factors are at work here, the fact that the European Union’s free-trade zone represents a geographic block with low barriers within the region encourages investment in its languages. Because most enterprises start out with regional strategies and Europe is a popular destination, Romanian and other relatively small eGDP languages benefit.
    
3. Industry. Competitive pressures within individual sectors account for some of the choices enterprises make. Once a major company enters a particular market, competitors will closely monitor its activity and move to counter that choice. Our research finds that this approach varies considerably – some industries target far more languages than others.
    
4. Language policy and status. Different countries have different language policies. Some require labeling and localization into particular tongues, while others leave this open. Some favor particular communities over others. The languages of education and administration get an automatic boost, even if other languages are more common on the streets and in homes. For example, between 15% and 30% of Algerians speak a Tamazight (Berber) language, but French is the primary language of the older, educated elite. Between the access it provides to more wealthy buyers and the large Francophone market elsewhere, it is the primary language companies choose to access Algeria and neighboring countries. By contrast, online support for Tamazight is vanishingly small, even for sites specific to the region. However, over time the buying preference may shift to Arabic and Tamazight.
    
5. Product categories. Different products sometimes require different languages, particularly in multilingual countries. For example, in Luxembourg, the language of most public discourse is French, although the majority of the population speaks German and English as well. But for political discussion, Luxembourgish (the local Germanic language) predominates. The closer a product is to the hearts and minds of people, the more important their home language is, even if they regularly communicate in another tongue. Similarly, some of the largest social networks engage in “hyperlocalization” – that is, they target much smaller linguistic populations. While these networks might provide Tamazight for Algeria, auto manufacturers target French or Arabic.

How do you apply these factors to your own decisions? Start out by defining your market carefully. Factor in average income, selling price, and any other factors. Compare these results to the data in “Digital Opportunity: 2019” and short-list your languages. If you have information on market penetration in your existing languages, you can use the online population figures to estimate projected sales for each language.

Determine your geographic strategy – or formulate one if your previous approach has been scattershot or inconsistent – and winnow down the figures to reflect the locales you would like to approach. Compare these results to your competitors’ language support and identify gaps. Make certain that you meet any regulations or legal requirements for those markets.

In the end, language selection benefits from a disciplined approach based on hard data rather than the “softer” approaches that far too often predominate. Because no single ranking can capture all of these factors, do not simply rely on a list – even the language tiers from CSA Research – of the most important languages. These capture only the generic case and are useful for checking your own application. However, it’s up to you to bring the knowledge about your situation to the table to make the informed decisions that meet your enterprise’s needs and goals. Combine this knowledge with CSA Research’s reports in this area to discover the best options for you or reach out to us for assistance.