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Online Trends 2019 | EMQQ

The growth of the internet and computing power has created great opportunities as well as serious concerns for the global population.  In her annual report, Mary Meeker, general partner at Bond Capital, highlighted the major trends seen in the online world.  Below is a summary of the major themes of the report [1]. To learn more about internet trends in China click here.

Half the World is Online 

As of 2018, nearly 51% of the world had access to the internet.  Practically, what that means is that half of the world is not currently accessing the internet and represents potential growth for internet and ecommerce companies and platforms. 

Of course, getting the remaining half of the world online likely won’t be as easy as getting the first half online was. Developed regions like North America lead online access with a penetration rate of 89%. However, regions like Asia-Pacific and Africa & the Middle East lag at 58% and 32%, respectively.

China is home to 21% of the world’s internet users. India and the United States represent 12% and 8%, respectively.

Non-US-Based Innovation Remains Robust 

Companies outside of the United States continue to drive innovation in the online marketplace. For example, Pinduoduo (PDD) translates consumer needs into actionable product strategies for manufacturers. Its base of users has doubled twice in the past five quarters to nearly 443MM buyers. Ant Financial's Alipay platform has doubled its user base over the past two years as it introduced innovative products and services to Chinese consumers who previously had limited access to traditional financial services [2]. MercadoLibre has also brought online payments to Latin America, doubling the number of annual transactions twice in the past two years.

Interactive Gaming 

The growth in interactive gaming is accelerating. The number of interactive game players increased by 6% during 2018 to 2.4 billion versus a 5% increase during 2017.

Freemium Business Model Expanding 

Freemium is emerging as a potentially powerful business model. In this model, the basic product or service is free, but upgrades or add-ons cost extra. Epic Games’ Fortnite is a powerful example of the model in the gaming sector.  The basic game is free, but to advance to higher levels, players must purchase an upgrade.  Additionally, premium accessory items may be purchased [3]. The growth in the freemium business model has been aided, in part, by the rapid growth of cloud computing. Only 22% of global workload occurs in the cloud, but that adoption rate has doubled in the past five years.

Also helping the growth of freemium is the rapid growth of digital payment platforms.

Data is the New App

The use of digital data and insights is being used to improve customer experiences. Information such as customer wants and preferences is being collected and distributed to companies across multiple channels, and used to create personalised recommendations and online experiences for consumers. This can lead to improved customer satisfaction with a company’s products or services.

Consumers Have Become More Receptive to the Use of Their Data

Consumers may be more receptive to the use of their data by companies to improve and personalise their online experience. In a survey of 8,000 consumers, 91% responded that they prefer brands that provide personalised offers or recommendations. The survey further revealed that 83% are willing to passively share data and 74% are willing to actively share data in exchange for personalised experiences.

A Wealth of Data 

A vast amount of data is currently available.  New data collected in 2018 increased by 13% versus a growth rate of 10% during 2015. From virtually zero prior to 2010, data collected is projected to hit 200 zettabytes by 2025.  Much of that data is projected to be stored in the cloud.  China is leading the growth in stored data, which is not surprising given the lower privacy standards in the country.

Concerns

The growth in internet access and their applications along with the rapid growth of stored data does present some concerns.

  • Overload - Nearly 26% of adults in the US are constantly online. For younger people that rate is 36%-39%.
  • Privacy - As more data is collected, individuals are more concerned about what data is being collected and how it is being used. 
  • Problematic content/activity - The use of the internet to spread negative or fake news, rumours, physical threats, and to bully or shame people has also become a concern. Additionally, the internet has been used to amplify ideologies which may lead to terrorist activities.  

Opportunities

However, opportunities have arisen simultaneously:

  • On-demand work - Online apps, as well as digital payment platforms, have allowed individuals to both hire and be hired online.
  • Online services - Food delivery, ride-hailing, etc. are now facilitated through online apps and digital payment platforms.
  • Remote work - The increase in computing ability has facilitated the rise of remote working arrangements. 
  • Online education - College, online training, and tutoring services are available online.

Summary

The growth in the internet and computing capabilities has resulted in more of the world having access to online services and products. Vast amounts of data are able to be collected, processed, and stored, allowing companies to personalise their products and services to individual consumers. This growth has presented both concerns and opportunities. Nevertheless, the future is expected to bring further growth in internet and ecommerce related products and services.

Companies that are able to adapt to and capitalise on the changing technology may be able to reap many benefits.

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Article Date: 19th August 2019. 

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