Mary Meeker’s Internet Trends 2016

For more than 20 years now Mary Meeker has shared her view on the internet trends (2016 report here). When she started in 1995 there where 35 million users, this year we are at 3 billion, getting close to 100x. The report is always long and insightful, full of good to know data and some forward indicators of new trends. Anyone whose work touches the internet benefits from a yearly read of the report. While the report might be already 6 months old, it is still totally relevant.

Some quick-facts for this year:

• India and China are now the two largest internet markets by number of users (pg. 8)
• Smartphone shipments are starting to plateau — trouble for Apple (pg. 11)
• Google and Facebook represent >75% of all US Digital advertising, Facebook is the big winner of mobile advertisement (pg. 44)
• Ad-dollars vs. time spent still unbalanced in the US with plenty of upside for mobile and more to fall for Print, TV and Desktop (pg. 45)
• eCommerce already at 10% of retail sales in the US (pg. 60)
• Commute time is comparable to Facebook use, future of transportation could be a revolution in many ways (pg. 157)
• Speed continues to pick up in the disruption (pg. 185)
• Internet leaders grow bigger, top the global charts and are full of cash (pg. 187)
• Data continues to explode (10B Petabytes) and data storage cost continue to plummet ($0.05 per GB) (pg. 195)
• Some new data companies to look up like Looker (pg. 201), Mapbox (pg. 203) and Datadog (pg. 204)
• Half of 2014 stolen personal records due to single Russian Cybergang: CyberVor (pg. 208)
• Data privacy finally becoming top of mind for consumers: 74% have limited online activity due to privacy concerns (pg. 209)

Some trends that warrant further commentary:

Social Wars: Social app as second home screen

Facebook and next generation social networks continue to compete. Social continues to be a fertile battleground for new startups that try to dominate the current paradigm. WeChat has created a user base comparable with Facebook centered in China and could start competing effectively for other markets. Asian players are also starting a new strategy of the messaging app as the home screen which could well commoditize iOS and Android.

• Facebook as the top internet media in the US with more than 1.000 minutes per month (30 minutes per day) with number two and three in 200–300 range and with lower reach (pg. 73)
• Snapchat as the only rival to Facebook in video (pg. 78 ) and images (pg. 90)
• Pinterest as the only one to have cracked selling through social with more than half of users using it to shop (pg. 92), much better than Facebook
• Facebook minutes per day for active users are starting to decline slightly while other upstarts like Offerup, Instagram and Pinterest gain significantly (pg. 93)
• WeChat at over 600 million users is comparable to Facebook in scale (pg. 99)
• WeChat is just the largest of a series of Asian-based messengers that are going far beyond just messaging with many other services (pg. 103) and are innovating with business accounts, payments, advertising, etc… (pg. 105)
• The messaging screen could become the home screen, turning iOS and Android from chokepoint to another commodity pipe (pg. 109)

Voice interface: the next wave

Voice interfaces (Amazon Echo, Siri, Google Now) could well be the next innovation in human-computing interfaces after the iPhone. We see the beginning of an explosion which could well be the next wave and take control of the home. Having both an Amazon Echo and a Google Home I can testify to the game-changing potential of voice interface. At this point it is still rudimentary but it is a much more natural way to interact.

• Voice is qualitatively different from touch or keyboards (pg. 116, 127)
• Word recognition has been improving dramatically and went over 90% in 2016. 99% will be the next step change. (pg. 118)
• There is an arms-race with word recognition that might well be the next key metric (pg. 119)
• Awareness and technology have more than duplicated voice assistant usage in mobile from 2013 to 2015 (pg. 121)
• Google and Baidu voice searches have been growing significantly (pg. 122, 123)

China: The new center of the world

China is such a large and innovative market that it is taking the lead in innovation over other markets, namely Silicon Valley. China has the advantage of a market that has been newly created and doesn’t have the legacy of the US or Europe but with an internal size comparable to both in economic terms and much bigger in number of users. This has allowed it to move beyond the US and Europe in many areas like Advertising, Banking or Commerce. China has already two first rate tech powers and several others that are up and coming. China could be the next Silicon Valley and represent the next step in the rotation of the global center:

• China already at almost 50% penetration with close to 700 million users (pg. 166)
• Users are Chinese dominated (vs. EU which is Silicon Valley dominated) with >70% of time spent with Tencent, Alibaba and Baidu (pg. 167)
• Online advertising slightly more advanced than the US (42% vs. 39%) (pg. 169)
• China retail leaders are two internet players which account to close to 10% of retail sales (pg. 170,171) while the US is significantly behind that
• China is also far ahead in payments with WeChat payments being a revolutionary form of payment with unheard frequency of use (pg. 175) and Alibaba having built a complete ecosystem with payments, loans and wealth management with astonishing scale(pg. 178)

What should I do?

Read the report and make sure you read it every year. It has a great return on time invested and builds your basic digital culture immensely.