Mary Meeker’s highly anticipated yearly Internet Trends Report was released last week. The Report covers a range of topics from internet and smartphone use to global economics and innovative technology. The Report documents the flattening of internet user growth and the continued slowing of global economic growth, but the quick increase in highly disruptive technology. Here are the top trends that affect your global business. You can review the entire Report here.
1. Internet growth is flat and phone sales are slow
According to the Report, 3 billion of the 7 billion people on earth are now online. Global internet growth is flat at 9% year-over-year. However, internet growth in India is accelerating, with a 40% increase over 33% year-over-year. India has now surpassed the US to become the second largest global user market behind China, with 277 million users. Global smartphone user growth is also slowing, even among the largest market, Asia-Pacific.
What does this mean for your business? Don’t let the word flat scare you. There are 3 billion people online. Many of those people are in India and China, which likely represents a huge untapped market for your business. Internet penetration is high among developed and even some developing countries. Becoming a global business is now more important, and in many ways, easier than ever before.
2. Easy growth is behind us
Global economic growth has significantly slowed. Global GDP growth in 6 of the last 8 years was below the 20-year average. Commodity prices are down 39% in the past two years. The Report outlines the 5 growth drivers that have caused this global decline: 1) connectivity growth is slowing; 2) emerging country growth is slowing; 3) government debt is high and rising; 4) interest rates have declined; and 5) population growth is slowing while the population ages.
US interest rates are at historically low levels and global 10-year bond yields are down. Global debt-to-GDP ratios are up and high in most countries, with a 202% average versus a 147% average in 2000. Global birth rates are down, while life expectancy is up.
What does this mean for your business? Slower growth, higher debt, and an aging population lead to higher risk, but big opportunities. This creates opportunities for businesses to innovate, increase efficiency, lower prices, and create jobs. For marketers, this requires harder and better work. You cannot expect to gain traction or customers without an intentional and targeted marketing plan.
3. China’s global impact
China and emerging Asia have become the big players that significantly impact global GDP. Global GDP contributions by region have done a 180 degree switch. In 1985, China and emerging Asia accounted for only 18% of the global GDP while North America, Europe, and Japan accounted for 63%. In 2015, China and emerging Asia accounted for a whopping 63% of the global GDP, while North America, Europe, and Japan accounted for just 29%.
What does this mean for your business? Although China’s growth is slowing, it will remain a huge player in the global economy. With the number of internet users alone, China is the world’s biggest online market.
4. Communication is changing
The ways in which companies, particularly marketers, are communicating with customers and potential customers is evolving rapidly around the world, especially in Asia and with younger generations.
What does this mean for your business? The way you communicate and on which platforms you communicate with your customers and potential customers will determine how successful your business is, and this varies widely by country, gender, age, etc.
Video and image communication is increasing
Visual (video and image) communication and usage continues to increase rapidly. Daily video views last year on Facebook and Snapchat increased to 8 billion and 10 billion views daily, respectively. Video is evolving from live yet linear TV to On-Demand to Semi-live via Snapchat stories to the most recent Live-Live with Facebook and Periscope live video streaming. People are using image-based platforms to find and purchase goods. 55% of Pinterest users use the platform to shop for goods.
What does this mean for your business? Video and image marketing should be a large part of your marketing strategy. You also want to ensure you are focusing your marketing efforts on the appropriate platforms for each country. The best platform will vary in large part based on where you are marketing your goods or services, e.g., country and region. Growth is escalating on user generated video and multiple platform storytelling. This means you need to find ways to insert your brand into the storytelling in a relevant way.
Messaging apps are more important than ever
Asian apps like Talk, WeChat, and Line started out as simple messaging apps, but have now expanded into much more complex communication and transaction platforms. They go beyond social conversations to include B2B interactions, calling, video, games, commerce, content, and much more.
Many companies are now using Facebook Messaging for customer service and as an extension of their business to transact and interact with customers. Messaging apps are increasingly becoming people’s home screen on their phone.
What does this mean for your business? Figuring out how your business will participate globally is a part of succeeding in foreign markets. You must insert yourself into the conversation in an appropriate and relevant way. Again, you need to choose the best platform to reach your customers and potential customers, which varies greatly by country and region.
Mobile and web advertising is increasing—so is adblocking
Mobile advertising increased 66%, desktop advertising 6%, and social media ads, such as Facebook, 59% and growing. At the same time, adblocking has increased 94%, especially in Asian countries on mobile phones. The Report found that many online video advertisements are ineffective, and offered ways in which video advertising might be more successful, including making ads authentic, entertaining, and non-disruptive.
What does this mean for your business? Even with the huge increase in mobile advertising, Meeker indicates that not enough money is spent on mobile advertising. So, you should perhaps heed Meeker’s advice and make sure you are spending your advertising dollars in the right place, which could be mobile. You should also focus on making your advertising, particularly video, more effective to ensure you reach the most customers possible.
5. Ecommerce continues to impact traditional retailers with no end in sight
People around the world continue to turn to their devices to shop even more, often forgoing a traditional “shopping trip” altogether. Today, people can find and buy virtually, no pun intended, anything they need online, from clothes to food (even fresh produce, dairy, and meat) to home goods. There is no need to ever set foot in a brick-and-mortar store again.
Ecommerce is impacting the revenue growth of traditional retailers. In 2015, Amazon’s revenue increased almost 20% while Walmart saw a decrease in revenue. There are similar numbers for most smaller online and physical retailers around the globe.
What does this mean for your business? The importance of an internet presence is old news today, but the statistics in the Report underscore and reinforce its importance. The trend for people to do much of their shopping online is strong and getting stronger. Physical retailers are already increasing their online presence and seeing an increase in internet revenue. Most physical retailers today have at least some online presence. Increasing your internet presence is one of the first steps to increasing your global presence.
6. People are worried about their privacy online
Over the past few years, online privacy has become an issue every business person encounters almost daily. The number of privacy breaches continues to increase, with a corresponding increase in cost and regulation. If you have any online presence at all, privacy affects your business. Privacy is changing the landscape of business around the world, which is why it’s surprising Meeker brushed through the topic by including only a few slides at the end of the presentation.
It should be no surprise that people are concerned about their online privacy, what might be surprising to some is how concerned people are and what they are doing about their concerns. People are more worried about their privacy than ever. The Report indicates 74% of people are limiting their online activity due to privacy concerns.
What does this mean for your business? Privacy should be a priority in the operation of your business. You should have, and are required in many countries to have, a detailed system of how you collect, use, distribute, share, protect, and dispose of a person’s personal information. This is vital to the success of your business as a privacy breach can be ruinous to companies, particularly small and medium sized companies. Furthermore, your customers and potential customers are now telling you how important protection of their privacy is to them. Don’t take risks with privacy protection, it’s just not worth it.
At 213 slides, we surely couldn’t include all of the great information and advice available in the Report so please make sure to take review it in greater detail, but the above highlights are particularly important to the success of your global business.
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