A Deeper Dive into Six of Mary Meeker's 2018 Internet Trends

Mary Meeker, the well-known venture capitalist and heralded "queen of the internet," released her annual internet trends report to the tech and business communities this month, generating as usual a great amount of interest and chatter. This year's 294-slide presentation touches on everything from data optimization to smart speakers to China.

Meeker, a partner at venture capital firm Kleiner Perkins Caufield & Byers (KPCB), covers many macro trends in her presentation, but what if someone on your team wants to know more? eMarketer is here to help. We chose six key areas where our data and qualitative research go deeper and can offer more clarity.

Here's a look at what eMarketer can tell you about mobile (usage and ad spending), voice, healthcare, ecommerce and China in 2018. eMarketer PRO subscribers can access the full reports and forecasts through the links below. If you aren't sure whether your company subscribes, you can check here.

No. 1. Mobile is driving digital media usage

Meeker's internet trends report: Digital media usage in the US grew 4% in 2017 to 5.9 hours per day. Mobile was the main driver of growth, accounting for 3.3 hours of daily digital time. (Slide 11, citing eMarketer forecasts)

eMarketer breakdown: So where and how are consumers spending their mobile device time? In eMarketer's forecast of mobile time spent in the US for 2018, smartphones were the big story, with an emphasis on those with larger screens. Likely because smartphones are getting bigger and better, tablet usage is declining, and growth in time spent entered negative territory for the first time in 2017.

Audio took up the biggest chunk of mobile app time in 2017, at 45.7 minutes (about 30% of the total). Social followed close behind with 36.6 minutes, or just under a quarter of app time. Despite the post-Cambridge Analytica #DeleteFacebook movement, eMarketer predicts that mobile time spent with Facebook will not see a decrease.

No. 2. Voice is primed for takeoff

Meeker's internet trends report: Google's word accuracy rate hit 95% last year, but the Amazon Echo still dominates the smart speaker market, with an installed base of a little over 30 million in the US at the end of 2017. (Slides 25 and 26)

eMarketer breakdown: Partly thanks to the increasing accuracy Meeker highlighted, smart speakers are being rapidly adopted, and eMarketer's latest forecast predicts that the number of US smart speaker users will rise at a compound annual growth rate (CAGR) of 47.9% between 2016 and 2020. Not since the smartphone have we seen such fast adoption. As illustrated below, 22.9% of the population will be using some kind of smart speaker by 2020.

Right now, the smart speaker user base in the US is dominated by your typical early tech-adopter: the affluent, older millennial male. We predict a shift in user demographics toward kids and Gen X moms of young children. Amazon is seeing this too, and debuted a kids version of the Echo this April.

Amazon beat Google to the voice tech starting line and will continue to hold onto its majority market share through 2020. Despite its slow start, Google will begin to eat into the market as adoption of the Google Home picks up.

No. 3. Consumers want bang for their buck(s) from healthcare providers

Meeker's internet trends report: People in the US are spending more on healthcare, and are starting to develop expectations for modern retail experiences, on-demand care, and digitized and transparent care management. Meeker also poses the question of whether increased consumer attention to value and prices, along with market forces, will finally force healthcare providers to bring prices down. (Slides 137 through 139)

eMarketer insight: To answer Meeker's question, yes, we believe that healthcare industry stakeholders know that skyrocketing costs need to be brought back down to earth, and that the current fee-for-service model isn't sustainable. In a search for efficiency, they are by and large turning to technology.

The first "beyond-the-pill" innovations widely adopted by physicians and consumers have been mobile wellness apps and fitness trackers. Beyond that, the internet of things (IoT), in the form of a network of devices, sensors, electronic health records, smart devices, ingestibles and implantables, will be the next innovation.

Data will also play a huge role, with advancing artificial intelligence (AI) capabilities opening doors to new treatments and ways to address patients needs.

No. 4. Ecommerce growth continues

Meeker's internet trends report: A whopping 50 slides in the report are dedicated to ecommerce. Standing out is the 16% year-over-year growth in sales in 2017, and ecommerce's 13% share of total retail sales in the US. (Slides 45 and 46)

eMarketer breakdown: In our US retail and ecommerce forecast released in February, we estimated that ecommerce growth will continue to accelerate, with sales rising another 15.6% in 2018 and reaching a total of $891.77 billion by 2022. In a breakdown of sales growth by category, food and beverage stands out as an industry that will see transformation in the ecommerce space this year.

Mobile was again a driver of overall ecommerce growth. Global mcommerce sales rose by 43.9% in 2017 and accounted for 5.8% of total retail expenditures. Standing out in mcommerce is China. Alone, it made up 67.1% of mcommerce sales worldwide last year, and sales are expected to nearly triple from $869.85 billion to $2.571 trillion between 2017 and 2021.

No. 5. Chinese companies are dominating the internet

Meeker's internet trends report: Five years ago, nine of the top 20 internet companies in the world were from the US, and two were from China. Today, Chinese companies account for nine of the 20 listed, while American companies account for 11. The top two Chinese companies on the list are Alibaba and Tencent, ranked at sixth and seventh, respectively. (Slides 217 and 218)

eMarketer breakdown: In eMarketer's report, "APAC Tech Leaders StatPack: Key Digital Companies in Asia-Pacific," Tencent and Alibaba are looked at in detail.

Alibaba has businesses in the movie, financial technology, gaming and online video industries. It's also investing in AI, augmented reality (AR), and connected cars. In October of 2017, it announced a $15 billion, three-year overseas research and development (R&D) budget to develop next-generation tech. Its Tmall platform is the main ecommerce platform in China, holding 51.3% of total market share in Q2 2017.

Tencent is known for WeChat, its mobile messaging app. WeChat (locally called Weixin) isn't your average messaging app: It has an in-app payment service called WeChat Pay that can be used for utility bills, taxis, groceries and peer-to-peer (P2P) payments. eMarketer predicts WeChat will have 543.7 million users by the end of 2018.

No. 6. Spend, spend, spend on mobile ads

Meeker's internet trends report: Although mobile is starting to dominate media time, ad dollars in the US are not flowing to the small screen at the same rate—leaving a $7 billion opportunity wide open. (Slide 96)

eMarketer breakdown: We predict that this opportunity gap will close quickly, and that mobile ad spending will surpass TV ad spending in 2018.

Google and Facebook are the big winners in the mobile ad space, and are predicted to continue dominating the market through 2018 and beyond.

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