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New Internet users ‘hard to find’, says Mary Meeker

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Users across the globe spent an average of 6.3 hours per day on the Internet.
Users across the globe spent an average of 6.3 hours per day on the Internet.

The number of global Internet users is on a slow growth phase, increasing to 3.8 billion people in 2018, up from 3.6 billion in 2017.

This is according to Mary Meeker’s 2019 Internet Trends report, presented by Mary Meeker, co-founder of equity and debt funding firm, Bond Capital, at the Vox/Recode's Code Conference in Scottsdale, US last week.

Every year, Meeker and her team publishes the “Internet Trends” report. The latest edition, a 333-page report, looked at important Internet trends from 2018 and what trends can be expected in the year ahead.

According to the report, 51% of the global population were Internet users last year, up from 49% in 2017. The report indicates that Internet users grew by a mere 6% between 2017 and 2018.

“Internet user growth is at 6% versus 7% the previous year; new Internet users are hard to find,” she explained during her presentation.

Growth slowed in 2018 because a large number of users had come online in the past few years, and new users are harder to come by, she explained.

The report highlights that China had the most Internet users in the world; 21% of the world’s total Internet user population. India followed with 12% and US ranked in third place, with 8% of users.

According to the report, Africa and Middle Eastern countries have a combined 13% of the global Internet user population, while European countries account for 15% of global Internet users. Latin America and the Caribbean region have a combined 10% of Internet users.

Users across the globe spent more time than ever on digital media, an average of 6.3 hours per day. A growing number of US adults report being online “almost constantly”, with 26% of them admitting to rarely being disconnected from the Internet in 2018.

Smartphone users

The Internet Trends report also highlights that global smartphone sales – which are the primary Internet access point for many people across the globe – are declining, for the second year in a row, indicating a -4% year-on-year growth from 0% in 2017.

For the first time, Americans spent more time on their mobile devices than they did watching TV. An average estimation of 226 minutes (more than 3.5 hours) was spent on their phones compared to 216 minutes on TV.

When compared to a decade ago, more time was spent on TV, with global viewers spending 266 minutes per day on watching TV, while mobile use was just 20 minutes.

Best performing companies

The report found that as of last week, seven out of 10 of the world’s most valuable companies by market cap are tech companies, with only Berkshire Hathaway, Visa, and Johnson & Johnson making the Top 10 as non-tech companies:

1. Microsoft

2. Amazon

3. Apple

4. Alphabet

5. Berkshire Hathaway

6. Facebook

7. Alibaba

8. Tencent

9. Visa

10. Johnson & Johnson

“Of the top 25 most valuable tech companies, 60% were founded by first- or second-generation immigrants. They employed 1.9 million people last year. New stricter immigration laws could negatively impact the tech industry and perhaps prevent our next Elon Musk from getting to the US,” notes the report.

According to the report, innovation at tech companies outside the US has remained robust, with popular areas of services and products including instant fulfilment, delivery and payments.

Advertising spend

Spending on Internet advertisements accelerated, up 22% in 2018.

“Most of the Internet ad spending is still on Google and Facebook; however, companies such as Twitter, Amazon and Pinterest collectively saw six times year-over-year growth since 2017. Some 62% of all digital display ad buying was for programmatic ads, which is expected to continue to grow,” notes the report.

Customer acquisition costs, the marketing spending required to attract each new customer, is also on the increase, notes the report. Meeker suggests cheaper ways to acquire customers, like free trials and unpaid tiers.

Free trials were the most effective marketing tool for online streaming services to attract new users, with 42% of consumers listing "free trial tier" as the most compelling reason for trying a new service.

E-commerce

E-commerce in the US is now 15% of overall retail sales, up 12.4% in 1Q2018 compared with a year earlier, but still towers over growth in regular retail growth, which was just 2% in 1Q2018.

The report also found that messaging platforms offering automatic or optional end-to-end encryption are rapidly rising in popularity, with secured services such as Telegram and WhatsApp outpacing the growth of non-encrypted messaging services like Twitter and China’s WeChat. At the beginning of 2019, around 87% of Web traffic was encrypted, compared to just 53% of platforms in 2016.

Furthermore, the report found the number of interactive gamers worldwide grew by 6% to 2.4 billion people last year, as interactive games like Fortnite become the new social media for certain people. The number of people who watch those games, rather than participate, is also on the increase.

* All graphs are sourced from Mary Meeker’s 2019 Internet Trends report.

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