1eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport'Fivehighlightsandfivechartsonprivatemessaging,ecommerceandsocialmedia

ARTICLE JUNE21,2019

AmyHe

aryMeeker,“queenoftheinternet”andventurecapitalistat

BondCapital,releasedherhighlyanticipatedannual“Internet

TrendsReport”andtouchedoneverythingfromdigitalmediausagein

theUStoconsumerconfidenceinChinainthe333-slidepresentation

shegaveattheRecodeCodeConferenceearlierthismonth.

Acoupleofitemsstoodouttous,soweofferouranalysisonfiveof

Meeker’sconclusions.

APrivateMessagingMovementintheUS?NotSoFast

ByDebraAhoWilliamson,principalanalystcoveringsocialmedia

Isencryptionreallywhatconsumerscaremostaboutwhenitcomesto

privatemessagingapps?Onslide168ofherpresentation,Meeker

pairstwochartsinadiscussionofprivacyconcernsimpactinginternet

usage.ThechartontheleftshowsthegrowthinworldwideMAUsfor

messagingservicesandplacesfullyencryptedservicesTelegram,

iMessageandWhatsAppatthetopofthechart,withTwitterand

WeChat,whichdonotofferend-to-endencryption,atthebottom.

FacebookMessenger,InstagramandGmail,whichoffereitheroptional

2eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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orannouncedend-to-endencryptioncapabilities,areshownin

between.Theotherchart,fromsecurityservicescompanyFortinet,

showstheamountofglobalwebtrafficthatisencryptedhasrisen

from53%inQ12016to87%inQ12019.

Theimpliedtakeawayfromthesechartsisthatconsumersare

becomingmoreinclinedtoseekoutprivatewaysofcommunicating.

But,theproblemisthatthesechartsareunrelated.TheMAUchart

showsdataonlythrough2017,andMessengerandInstagramdidn’t

announcetheirplanstoaddencryptionuntilthisyear.Byplacing

serviceswithsmallerMAUcounts(Telegram,iMessage)atthetop,

thatchartimpliesthatthepresenceofend-to-endencryptionisdriving

usagegrowth.

TheFortinetdata,meanwhile,showsthepercentageofwebtrafficthat

usesHTTPSasasecurityprotocol,andassuch,itismoreofa

reflectionofchangingcorporatesecurityneedsasmobiletraffichas

increased,ratherthanconsumers’desireforprivacy.

Webelievethattimespentinmobilemessaging,atleastintheUS,will

remainwellundertimespentinsocialnetworks.

3eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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Andwhileit’struethatmobilemessagingappusageisrising,it’snot

necessarilybecauseofthepresenceofencryption.Thisyear,therewill

be2.3billionmobilemessagingappusersworldwide,up9.2%over

2018,accordingtoourforecast.However,63%ofuserswillbein

China,wherethegovernmentintenselyregulatesencryption.

TechCompaniesinLatinAmerica’sPrivateSectorStepinto

BolstertheDigitalEconomy

ByMatteoCeurvels,researchanalystcoveringLatAmandSpain

AsmoreconsumersinLatinAmericacomeonlineandtakepartinthe

digitaleconomy,technologycompaniesintheregion’sprivatesector

haveplayedafundamentalroleinbolsteringacultureofecommerce.

InMeeker’sreport,wegetaninterestinglookathowplayerslikeRappi

4eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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haveultimatelyreshapedthewayconsumerstransactonline.

LatinAmericaishometocountrieswithsomeoftheworld’sworst

traffic.Formany,asimpletriptothestorecouldturnintoawholeday

affair—takingintoconsiderationthetimeittakestogofrompointAto

pointBincripplingtraffic.

Butasconsumers’purchasingpowercontinuestogrow,manyare

nowturningtoon-demand,last-miledeliverystartups—likeRappi,

GlovoandUberEatstonameafew—toseekoutconvenientwaysto

getproductsdeliveredwithouthavingtoventureoutintogrueling,

gridlocktraffic.

Inparticular,Rappioffersconsumersaquickandefficientwaytofulfill

theirordersbycapitalizingontheregion’slongstandingbikeculture.

Byofferingconsumerstheabilitytogetanythingdeliveredinfewer

than30minutesforlessthanadollar,monthlyordershave

experiencedyear-over-year,exponentialgrowth.Asaresult,Rappiis

nowoneofthelatestLatinAmericanstartupstoachieve“unicorn”

status—thatis,aprivatelyheldstartupcompanyvaluedover$1billion.

TheRiseofPinduoduoandtheConsumer-to-Manufacturer

ModelinChina

ByMan-ChungCheung,researchanalystcoveringChina,Japan,and

APAC

5eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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Meeker’spresentationidentifiesthe“consumer-to-manufacturer”

model(slide57)that’sveryquicklyfindinggroundinChina’s

ecommercespace,beitonAlibaba’sTaobaoLive,Kuaishouor

Mogujie.Underthismodel,digitalshoppersinteractdirectlywith

merchandisemanufacturersorbrandsvialivestreamtoexpresstheir

preferencesforitems.Theseideasanddataareharnessedandapplied

totheproductionprocess,makinghighlevelsofpersonalization

possible.

Thenextstepistoincorporateautomationtoincreaseefficiencyand

drivedowncost.Eventually,wewillseeanend-to-enddigitizationand

fullinterconnectednessofthesupplychain,andthatmayhappenin

Chinafirst.

Relatedtotheconsumer-to-manufacturermodelisecommerce

platformPinduoduo,whichallowsusersandtheircontactstoshopas

agrouptogetthelowestpricesonproducts.Theecommerceretailer

knowsexactlywhichbuttonstopushtomotivateshopperstobuy:

ConsumersinChinatrustword-of-mouthrecommendations,whichis

whysocialcommerceworkssowell.

Pinduoduogetsdigitalbuyerstosharetheirdesireditemsonsocial

withtheirfriendsinordertogetabetterprice.Pop-upbanners

constantlyflashontopofthescreenalertingshopperstowhatothers

arebuying,tappingintoconsumers’fearofmissingout.Andthe

extremelyaffordablepricingensuresconsumerscomebackoften.

WeestimatethatPinduoduo’sretailecommercesaleswillbe$141.45

billionthisyearandgrow63.5%nextyeartoreach$231.24billionnext

year.

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TheFragmentationofMediaConsumptionintheUS

ByRossBenes,analystcoveringvideo

Meekerhighlightstheincreasinguseofsecondscreens(slide38),

whichunderscoreshowpeople’sfragmentedmediaconsumptionis

disruptingthewaymarketersapproachTVadvertising.AsTV

marketersstruggletodeterminethebestwaytodobranding,more

willturntocross-devicetargeting.

Furthermore,thegrowingamountoftimethatpeoplespendstreaming

digitalvideosthroughtheirphones,computersandTVsetsisblurring

thedistinctionbetweendigitalvideoandTV.Tosomepeople,the

definitionofTVhasbecomeanexistentialtopicnowthatordinary

usersandadvertisersarefocusingoninternet-enabledTVviewing.

AndalthoughdigitalvideoisgainingtractionatthesametimethatTV

isbecomingmoredata-driven,it’salsoworthrecognizingthat

traditionallinearTVhasn’tgoneaway;itstillaccountsforahefty

7eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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chunkofoverallwatchtime.WeestimatethatUSconsumerswill

spend4hours,7minutesonTVthisyear,and2hours,13minuteson

digitalvideo.

AreImagesReplacingtheWrittenWord?

ByMarkDolliver,principalanalystcoveringdemographics

Associalmediahasevolved,somepeopleareincreasinglyinclinedto

shareimagesinsteadofwrittenwords.Thisisatrendwehavenoted

incoveringtheriseofplatformslikeInstagramandSnapchat.

Meeker’spresentationtouchedonthetopicwithdataonsteeprisesin

imagecreationandsharing,alongwithincreasingsophisticationof

8eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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imageusageonvenueslikePinterestandInstagram—slides79and80

—thelatterofwhichhasseenasteadilyincreasinguserbase,and

whichweestimatewillhave117.2millionusersby2021.

Butoneofthemoststrikingslideshadnoimagesatall—justwords

(slide86),notingthat“ourbrainsarewiredforimages”andincludeda

referencetowritingas“ahack,adetour.”

Well,yes,butit’sa“detour”centraltotheemergenceofadvanced

humancivilization.Ifimagesaredisplacingthewrittenword,the

implicationsextendwellbeyondtechnologyusageorhowsociety

shapesitself.Amongotherthings,itportendsaninternet-agedivision

between“haves”and“havenots”—inthiscase,betweenpeoplewho

havealotofinformationandthosewhodon’t.

Ithardlyneedstobesaidthatdigitaltechnologyenablespeopleto

gatherunprecedentedamountsofinformationandeven(sometimes)

synthesizethatinformationintogenuineknowledge.Plentyofpeople

9eMarketer’sAnalystsExplainMaryMeeker’s'2019InternetTrendsReport':Fivehighlightsandfivechartsonprivate…

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—Meekeramongthem—willcontinuetousedigitalinthatway.But

wedoseeadriftinwhichthewrittenwordmatterslesstolotsof

peopleastheyfinditmorefuntofocusonimages.Granted,most

peoplewilldosomeofeach.Butthemanyforwhomwrittenwords

becomeanunlovedsecondchoicewillleadlower-informationlives,at

leastinrelationtothosewhostillgravitatetowardthewrittenword.