The 2019 Internet Trends report was released to the public at the end of June, offering industry insights, trends and predictions that undoubtedly impact international e-commerce businesses. For those unfamiliar with this highly-anticipated report, Bond Capital founder and former Kleiner Perkins general partner Mary Meeker has been releasing her take on where the internet is heading for almost 25 years. Her interpretation of global internet penetration and usage trends into what’s driving internet usage and consumer behavior provides valuable insights for international e-commerce companies.
Here are six key takeaways from the 2019 Internet Trends Report that could impact global e-commerce for years to come.
- China dominates internet usage. Brands and retailers who have been putting off their entry into the Chinese e-commerce market may want to reconsider, as the time seems right to engage with this audience. More Chinese consumers are online than ever before, and are spending more time there once they have access. In fact, the Asia Pacific territory represents 53% of the global population’s internet usage, with China alone making up over a fifth at 21%.
- Global e-commerce is a top economic driver. It’s never been a more opportune time for brands and retailers to enter the global e-commerce market. As Meeker notes, four out of the top ten most profitable internet corporations in the world are either e-commerce merchants or service providers catering to the international e-commerce industry. Amazon, Alibaba, Tencent and Visa all landed on Meeker’s list.
- E-commerce is now 15 percent of all global retail sales. As if we needed further evidence, Meeker points out that online purchases are outpacing brick-and-mortar purchases in every developed nation on the planet. In fact, e-commerce towers over growth in traditional retail, which was just 2 percent in Q1 this year.
- Internet ad spending has accelerated in the U.S. The report shows that a majority of internet ad spending domestically remains on Google and Facebook; however, companies like Amazon and Twitter are chipping away at market share. And 62 percent of all digital display ad buying is for programmatic ads, which Meeker predicts will continue to grow.
- Customer acquisition costs are going up. This could be driven by the sharp increase in internet ad spending and programmatic ads — at least here in the U.S. It could also be because the e-commerce industry is growing more competitive, as consumers have more choices about where to spend their money online. Meeker points out that the rise in the cost of acquisition marketing is unsustainable, because “in some cases, it surpasses the long-term revenue those customers will bring.”
- Tech companies are innovating to solve order fulfillment, delivery, and online payment challenges. E-commerce is an industry where emerging technologies are gaining more traction to address some of the more difficult aspects of the online customer experience. Meeker cites China as a market in which intriguing new payment solutions are catching on, such as gamification, group buying and purchasing through social media apps like WeChat.
Succeeding with cross border e-commerce requires thoughtful monitoring of global trends, so brands and retailers can be prepared for what’s next. These six takeaways from the Meeker report give international businesses some indication of the larger evolving trends and tailwinds driving the cross-border commerce industry. Additionally, brands and retailers will need to rethink their marketing strategies around customer acquisition as costs continue to rise. And finally, cross border merchants must find modern ways to leverage technology to remove friction at all stops along the customer journey in each market they serve.
If these trends from the Meeker Report have inspired you to accelerate your global market entry plan, download our International E-commerce Kit to determine your brand’s readiness.