Concerns and Hope for the Internet: A Summary of Mary Meeker’s Annual Report

Mary Meeker is famous for her bold predictions about internet trends like the rise of Amazon, and has continued to amaze her followers by giving annual reports about the latest changes in technology.

Highlights of her internet trends report include increasing internet use and the rise of e-commerce, the privacy paradox, and changing conditions in China and the US caused by the advent of the internet.

She starts her report by discussing the success of internet adoption which has reached 3.6 billion people and 50% total market penetration. Meeker states it will be more difficult for the rest of the market to adopt the internet as is reflected by the slowing of smartphone purchases, which showed no difference between this year and the last. Despite this trend, usage of internet per person per day has continued to increase, with the average adult spending 5.9 hours on the web.

There are a number of reasons for the rising use of the internet including:

• Personalization
• New content with messaging and voice activated technology
• Rise of e-commerce due to increasing entertainment of social and gamified shopping apps and websites

The rising growth, monetization, and data collection of the internet has created a new landscape for companies, regulators, and consumers.

Meeker argues that it is important for both regulators and internet companies to be mindful of the consequences of their actions, and to be prepared to adjust if necessary as it is irresponsible to stop innovation and progress.

The report also points out that US and China are leading internet use growth worldwide. 5 years ago, the US had 9 of the top 20 companies leading the web, and China had 2. Now the US has 11 and China has the other 9 top 20 companies. Currently, the US has internet platforms that serve over 2 Billion people, and China has platforms that serve over 1 billion. Below are summaries of China and the US’ changes due to the advent of the internet.

Meeker also focused more specifically on China whose users are more willing to give up data for benefits than others around the globe. China is using this data to improve AI and have even gone on to win more competitions. Meeker predicts that the US will lead AI for the next 5 years, and after which China will catch up quickly.

China has several innovative companies contributing to this statistic which use mixed models of online and offline shopping. They have also generated internet phenomena like Alibaba which is the leading the e-commerce ecosystem in China and shares many similarities to Amazon in its wide ranging sales/products (see slide 91 right). Online video entertainment is also a rising market in China primarily due to mobile devices and has surpassed broadcast television in terms of budget.

Data about the US however paints a more negative picture based on current consumer indicators:

• Household debt is at its highest level ever and rising! (see slide 102 on below on left)
• US consumers are spending more on shelter, taxes and healthcare and less on food, apparel and entertainment items.
• Transportation spending is also relatively flat due to oil prices, ride sharing apps, and public transport use.
• Healthcare is mixed since it is becoming more consumer focused, but insurance costs are rising for all. Meeker hopes that consumer spending will decrease overtime with the consumerization of healthcare, and the rising availability of data.

Despite fears, the job market appears solid based off of traditional metrics:

• 3.9% unemployment with 7 million job openings which is a 17 year-high
• Labor force participation is at 63%, which is 3.5 million people short of the 64%-5 year average
• Freelance jobs are growing 3x faster than the growth of the total workforce likely because workers are demanding more flexibility, and additional income sources

Meeker highlights changing markets and conditions in the US that have affected all aspects of life, as well as the changes in shopping, data collection, and new opportunities. With regards to responsibility, Meeker touched on the privacy paradox, and the need for restraint and care needed in regulation and private businesses that deal with the internet.