What’s Missing in Mary Meeker’s Report?

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What’s Missing in Mary Meeker’s Report?


In the recently released “Internet Trends” report fromMary Meeker, her yearly and much-anticipated take on the industry, China was highlighted as a bright spot for growth and a hotbed for innovation. But there were a few important points that she missed. Let’s take a look.

First, Key Takeaways

China alone accounted for 21% of the world’s total internet population in 2018, followed by India at 12% and the U.S. at 8%. China is also home to seven of the world’s most valuable technology companies, second to the U.S. and its 18. Alibaba Group ranked the highest among the Chinese companies on the list.

mary meeker

In particular, the report featured many commerce and digital payments-related innovations in China, driven by the country’s robust retail sector. While China and the U.S. have similar sized retail markets at $5.2 trillion and 5.4 trillion in 2018, respectively, China’s retail market grew 8%, including e-commerce growth at 17.8%, in the first quarter this year, the U.S. retail market grew 2.7%. As Meeker highlighted in the report, U.S. e-commerce grew “a solid” 12.4% and “a solid” 2% at physical retail stores in the quarter.

One of the notable highlights from the report was Alibaba’s New Retail strategy, which has paved ways for traditional retailers in different verticals in China to digitize their operations by combining online and offline shopping experiences seamlessly using technologies. It has transformed companies and brand partners in categories from grocery and fashion to food and beverage and home. For example, Alibaba’s Freshippo grocery store model, which offers customers living within 3 kilometers free delivery in as fast as 30 minutes, was replicated in 470 of Sun Art‘s hypermarket stores in China.

mary meeker

China is also leading in bringing interactive shopping experiences to the consumer. Livestreaming can “create transparency, interactivity and influencer engagement” in e-commerce, said Meeker. Alibaba’s social-commerce platform, Taobao, was featured as an example of this integration, with Meeker highlighting the more $15 billion in gross merchandize volume the site generated through livestreaming in 2018.

Gaming may be a massive global trend, with 2.4 billion interactive gamers worldwide, but Meeker said that China is leading in the use of gamification to drive consumer engagement for digital businesses. China’s leading mobile-payments app Alipay is one example she points to, saying the app’s Ant Forest mini-program uses a gaming model to encourage environmentally friendly activities, such as taking public transportation and recycling used goods. Players accumulate “energy points” when they take these actions, and those points can be used to plant trees in the real world, supporting efforts to combat deforestation in China. The Ant Forest game has drawn participation from 500 million users so far and resulted in the planting of 100 million trees.

mary meeker

What Meeker Missed

While the report covered a broad cross-section of innovation in China, there are others that are not in the report. Here are a few of them:

Meeker was right to note the rising trend of Chinese super-apps, or apps that serve as a one-stop shop for everything consumers may want to do in one particular area. One example she provided was Alipay, which has evolved from a digital-payments app to a super app that includes 200,000 mini-programs that allow consumers to access all kinds of services, such as hailing cars, paying utility bills, and finding the closest shared bike.

What Meeker did not mention was Taobao, another powerful super app that integrates everything a consumer could possibly need into one place online, both products and services alike. Taobao’s homepage is the entry way to shop for imported products (via Tmall Global), daily deals (via flash-sale platform Juhuasuan), travels (via Fliggy) and food delivery (via Ele.me), just to name a few. In terms of consumer experiences, Taobao is the destination for all things social commerce, such as livestreaming, celebrity blogs and connecting online with fellow shoppers who share similar interests.

mary meeker

New category segments for delivery was another global trend is the Meeker report. But while she highlighted Latin American delivery app Rappi and e-commerce platform Tokopedia in Indonesia, she left out an interesting new service from Ele.me: delivery from traditional “wet markets.” These old-world markets are still highly trafficked in China, as daily shopping for fresh produce is still a part of Chinese culture. But the trend was ripe for digitization. Now, many wet markets are selling their fruits, veggies, meat and fish online through the on-demand delivery app – to the benefit of Chinese consumers. Here’s a video of how it works.

Finally, the urbanization trend in China that was featured the report is only half the story. While urban China’s disposable income per capita grew at 8% last year, disposable income for Chinese rural residents grew at 9%. Meanwhile, retail sales in rural areas outpaced those in Chinese cities, growing 8.9% versus 7.9%, respectively, during the first quarter this year. These less-developed areas are where China’s biggest consumption growth will happen.

AlibabaAlibaba GroupChinachinese consumersEle.meinternet trendsJuhuasuanlower-tier citiesMary Meekerurbanization

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