Michael Sainsbury
June 6, 2016

Meeker bullish on mobile Asia

Mobility

Meeker bullish on mobile Asia

Mary Meeker: Charting Asia growth to include more than half of the world's smartphone users

The Asia Pacific region – Australia’s backyard – is now home to more than half of the world’s 2.5 billion plus smartphone users, a share that grew from 35 per cent in 2008 to 52 per cent in 2015. And the trend shows no sign of stopping.

Smartphone sales growth in the Asia Pacific has slowed to 25 per cent last year, down from 35 per cent a year earlier, largely the result of increased market penetration.

Social messaging is booming in Asia. China’s homegrown messaging app WeChat (Weixin) has more than 700 million users, and a raft of countries in Southeast Asia – including the chunky markets of Indonesia, Thailand and the Philippines – are among the heaviest users of Facebook in the world.

These numbers are the tip of the iceberg. They are some highlights from an avalanche of data that show the vast scale of digital opportunities in Asia from the annual report from Silicon Valley venture firm Kleiner Perkins Caulfield Byers.

The author of the report is KPCP partner Mary Meeker, a veteran industry watcher and former stock market analyst whose has become something of benchmark for the US and global technology sectors.

In terms of macro global trends, Ms Meeker notes that the world (and most of Asia) is adjusting to slower growth, higher debt, and an aging population – all of which creates risk.

The flip side, however, is that this also creates opportunities for businesses that innovate, increase efficiency, lower prices and create jobs – and that the internet can be at the core of this.

One key trend is the rapid and generational move from traditional methods of internet access to the primary interface between the user and the Net as being social media and messaging apps.

The report notes that the home screen has acted as the “de facto portal on mobile devices” since the arrival of the iPhone in 2007 and even earlier messaging apps, with context and time, have a chance to rival the home screen as the go-to place for interaction.

Nowhere is this truer than Asia, where social messaging is fast become the main place that people, interact with no only each other but with brands.

Adblocking on desktops and mobile home screens has become rampant, accelerating vendors move to these apps as a new marketing platform/channel.

While adblocking at about 220 million desktop users was up 16 per cent year-on-year, it was used by 420 million plus mobile users – up 94 per cent for the year, including a majority of users in China, India and Indonesia.

Meeker describes this as a call-to-arms to create better ads.

But in truth it points to the business opportunities on messaging apps, which are right now almost endless. China’s WeChat platform now has more than 700 million users in its home country and around Asia. More than 10 million businesses have their own accounts, and about 80 per cent of users follow businesses.

In mobile mad Thailand, Instagram shopping is all the rage. Browsing begins on Instagram, leading to conversations, messaging with the store, payment and confirmation all done online.

The other global trend which is also even more pronounced in Asia is the move to using voice to text, and also using voice and images to search.

This is not just due to a younger more mobile-savvy population, but that Asian alphabets and writing systems are much larger than the West’s standard 26 letters.

“As speech recognition accuracy goes from say 95 per cent to 99 per cent, all of us in the room will go from barely using it today to using it all the time. Most people underestimate the difference between 95 per cent and 99 per cent accuracy. 99 per cent is a game changer,” the report quotes Andrew Ng chief scientist at Chinese search giant Baidu saying.

“No one wants to wait 10 seconds for a response. Accuracy, followed by latency, are the two key metrics for a production speech system.”

Mr Ng is further quoted as saying last year that in “five year’s time at Baidu, at least 50 per cent of all searches are going to be either through images or speech.”

If there’s a criticism in such a treasure trove of information and data – enough to keep an enterprising tech journalist busy for months, it is that the sheer scale of the opportunities, especially in Asia, are even greater than Ms Meeker notes.

In the opening slide of an impressive 206-slide deck, her report notes that there are now 3 billion internet users on the planet, more than 30 per cent of the world’s population.

India’s internet growth is accelerating, rising 40 per cent last year compared to 2014, compared with 33 per cent growth a year earlier to reach 277 million users.

Yet it seems that Ms Meeker has underestimated the number of internet users with these big picture figures, and especially in Asia, by not co-relating her smartphone and “internet” figures

They are the same thing. They are all devices that connect to the web. But in Asia, the online world is – as the report bears out – incredibly mobile centric.

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