Takeaways from the Mary Meeker - Internet Trends Report, 2019

With the most awaited annual report on the Internet Trends out in public, I took it as the opportune time to extract the relevant takeaways. Feel free to discuss and share.

Here we go!

• As of today, more than half of the earth's population has at least tasted the internet in some form. This has led to the second order effect of internet coverage growth slowing down. IMO, nothing surprising about this because now we would be targeting people who are much harder to reach out to due to geography, economics, and societal nuances. And Incremental growth over a huge base is always hard.
• E-commerce continues to grow in double-digits YoY while physical retail grows at early single-digits. With E-comm driving 15% of Retail, the equilibrium is yet to be achieved.
• Talking about Equilibrium, the advertisers have finally achieved equilibrium in the Ad spends share with respect to the time spent on the media type. So spends are happening as per the time being spent on the channels. In terms of pure numbers, Internet Ads spent to account for ~ $90 billion in the USA annually.
• Google and Facebook continue to hold the lion's share in Ad spends (not surprising, yes). BUT, players like Amazon, Twitter and others are pushing to grab a fair portion.
• Nothing beats word of mouth publicity which comes from a mix of a great product + great service + user experience among a litany of other factors. The report cites examples of Spotify, Zoom, and Stitch Fix to reinforce a similar argument.
• Mobile has eaten up Television.

Okay, not so fast. But yes - Mobile has overtaken TV as the channel with the most engagement. 226 minutes of usage per day against 216 minutes of TV.

• Video is the juggernaut driving data consumption - with an estimated 1.5 Billion people having using a short-form video in the last one year. Facebook has specially milked it really well through WhatsApp / Instagram / Facebook Messenger
• This is my favorite bit. Podcasts have scaled up really well the last 4-5 years. 70 million users in just the USA. That ~ 25% of the country population. I reckon India + SEA would have its podcast watershed moment within another 24-30 months.
• Around 50-60 million people in the US have been covered by Alexa Echo, Wearables, On-demand-services - the whole gamut.
• Latin America has a few big emerging players like Rappi and Nubank. So it is not only Salsa and Football going down there. Which are great, by the way.
• Tokopedia does 70% same day / next day deliveries in Indonesia working with 6 M+ merchants. That is what you say solving for Logistics. At a place as fragmented as Indonesia having congestion / over-population pangs as India, a feat like that is commendable
• Visual communication is often the most engaging way to communicate. But you already knew that. The report reinforces the argument.
• Online gaming has morphed from the stereotypical image of a lonely pursuit to part of our day-to-day culture. It has got the social elements (get your friends to join you in a multiplayer game - similar to the classic Counter-Strike games we used to play in our undergrad). Quite surprisingly, people also like to watch others play. That too in large numbers. Who would have imagined this?
• The Freemium business model started with Gaming. It made its shift to Enterprise software has had premium members in a range of 2-3%. Slack has it at 30-35%! Slack and Spotify conversions are one of the most eligible case studies for the B-schools.
• AWS still has more than 50% share in the cloud services. Google and Microsoft, are catching up fast as seen in the last 2 years. Hopefully, it won’t be a monopoly in the coming years as it has been the last few years.
• Not sure how interesting it may be others, but I was surprised with the stat that 75% of the people were actually okay to actively share their data for personalized offers. What we don’t know is how the exact questions were posed to the people in the survey though.
• Internet overload is actually a thing with more than 1/3rd of the users surveyed by Pew Research acknowledging that they remain online almost all the time! That includes yours truly as well, despite not being on FB / Insta / Twitter - the nine yards. There are other whirlpools.
• What is almost comical is that people are trying to control their internet usage and yet, the engagement numbers always seem higher quarter on quarter. Also ironic is the fact that Facebook provides options to users to restrict usage.
• People gravitate towards negative news. Not too surprising given it has deep evolutionary explanations.
• Lots of words around how each country/continent views the Internet to shape their lives and their justification of the regulations around it. The only broader point - Now that half the population has at least tasted internet, it is high time we start ascribing some structure to it in terms of control.
• Cyber attacks continue to increase in terms of numbers and sophistication. Where lies the opportunity to make money, also lies the opportunity to fraud.
• People love on-demand services as seen by the scale of on-demand service platforms. This scale has led to the creation of ~ 10 M jobs on one or the other on-demand platform.
• Education has gotten highly expensive in the US the ripple effect of which can be seen in the value of student-loan-debt. It has gone to a freaking $ 1.5 Trillion from $ 200 billion in 2003.
• While the report doesn't suggest it explicitly, I assume that is one of the reasons for the drive towards MOOCs and online learning modules. Coursera and a few other leading MOOCs have now more than 40 M people learning something new. Employers also see value in re-skilling people with marginal costs and hence, are happy to reimburse for the costs incurred on re-skilling.
• Another interesting behavior is around course-completion percentages. Course completion is only 4% for unpaid learners while it is a whopping 50% for paid learners. Add a formal certification program from a University and the course completion percentage is 89%!

Money and degrees, money and degrees!

• Let us talk about China now. If you have been with me till now, you would most probably be someone who reads the usual startup news. So most probably you are now aware that how DAUs / MAUs for any consumer internet platform runs into hundreds of millions in China. The report mentions that a lot, citing existing platforms.
• What did catch my eye this time was how philanthropy happens on the scale as well! Within the Alipay, through gamification, more than 100 M saplings have been planted!

This gives me hope that if push comes to shovel to solve for climate change issues, it would be the Chinese who would do it 'Shenzen style' in saving the planet. Because you know, they need to survive as well.

• A recurring pattern in scaling up the consumer platforms in China has been the use of games. Play something to save the planet, get someone to do XYZ to get extra discounts.
• Pinduoduo claims to have 450 million people on its platform transacting. Now just take a moment to digest it.

450 million people. For a company which started in 2015. In China.

How improbable that is? If someone in 2015 said that it was still possible to compete against Alibaba, JD in the E-commerce game, he/she would have been laughed off. Reality is stranger than fiction. Here is an in-depth article on the rise of Pinduoduo.

• There is a bit of content around how the leading Chinese apps are 'super-apps'. Nothing new if you have the usual TechCrunch dosage.
• China has really innovated the shit out of E-commerce. There is Alibaba, with the 'New Retail' concept. Then there is Taobao Live, which apparently does an annualized GMV of $14 Billion. And this is just another channel for Taobao. Here is an interesting video which shows how it is done in China.

My biggest takeaway - better start this course on Coursera.

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So this is it. Here is the link to the complete report shared by Bond Capital. Bond Capital has been founded by Mary Meeker.

As usual, thoughts are always welcome!