Looking at the adverts on the London underground this week, one theme jumps out – tech. The ads for Google Assistant, Nest and Spotify exemplify just some of the key takeaways (voice technology, subscription services) in the legendary tech investor Mary Meeker’s annual internet trends report. Innovation and rising competition are driving product improvements and this is increasing usage and monetisation. Here are a handful of the findings:
- Internet adoption: 3.6 billion people are now online, that’s more than 50% of the world’s population, thanks to cheaper Android phones and Wifi availability
- Mobile usage: Although internet user growth is slower and smartphone shipments are flat, we’re spending more time online – 5.9 hours a day for US adults
- Voice: voice technology is at an inflexion point with speech recognition achieving 95% accuracy and sales of Amazon Echo jumping from 10 million in 2016 to over 30 million last year
- Engagement drives profits: increasing time on internet services like Facebook is correlated with revenue gains
- Tech investment: investment in tech companies is at record levels (private and IPOs). The top six R&D and capex spenders in the US are tech companies
- Ecommerce accelerating: ecommerce now represents 13% of all retail purchases, representing significant opportunities for shopping apps, payment technologies, cyber security and delivery services. And mobile shopping is becoming entertainment with the growth in app sessions outpacing music and media
- Amazon, Amazon, Amazon: a significant proportion of product searches start on Amazon…and are fulfilled by Amazon with the aid of 1-click purchasing, Prime fulfilment, sponsored product listings and voice search and fulfilment
- Social media: discovering products on social media is more likely to lead to purchases, which is driving growth for direct-to-consumer retailers and brands
- Subscription searches: the subscription model is seeing massive adoption as consumers are drawn to personalisation, price, access and choice. Subscriber numbers at Netflix (video) are up 25%, Spotify (music/audio) up 48%, Stitch Fix (fashion/clothing) up 31% and Peloton (fitness) up 173% year-on-year
- Look East: China is now home to nine of the top 20 worldwide internet leaders compared to just two five years ago. Alibaba is expanding beyond China.
At 3.6B, the number of Internet users has surpassed half the world’s population. When markets reach mainstream, new growth gets harder to find -evinced by 0% new smartphone unit shipment growth in 2017. Internet usage growth is solid while many believe it’s higher than it should be. Reality is the dynamics of global innovation & competition are driving product improvements, which, in turn, are driving usage & monetization. Many usability improvements are based on data -collected during the taps / clicks / movements of mobile device users.