Digital Economy Compass
Mai 2017
“At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies.”
John Chambers, Chairman of Cisco System
2 Welcome to the Digital Economy Compass
Less talking, more facts – our idea behind creating the Digital Economy Compass. It contains facts, trends and key players, covering the entire digital economy.
We provide… › key essentials from our research, › actionable insights, › Statista’s exclusive forecasts.
This very first edition will provide everything you need to know about the digital economy.
Your Digital Market Outlook Team
3 Table of Contents
Global Trends › Connectivity: Numbers behind the “always on” trend…………………………... 5 › Social Media: Love it, hate it, but accept that you need it…………………... 20 › Platform Economics: A story about White Sharks and Swordfish……… 30 › Venture Capital: Feed for new Tech-Unicorns…………………………………...... 83 › AI, AR and VR: The next big Technology Hype………………………………………. 91
Statista’s Digital Market Outlook › e-Commerce……………………... 106 › FinTech…………………………………. 148 › eServices……………………………. 117 › Digital Advertising…………….... 160 › eTravel ………………………………. 129 › Smart Home……………………...... 171 › Digital Media……………………...138 › Connected Car…………………….. 181
4 Connectivity 2,570,792 e-mails per second
The global number of e-mails sent per second resulted in around 81 trillion e-mails sent during 2016.
Source: internetlivestats.com Connectivity The world is more connected than ever, a development which looks set to continue Share of world population connected to the internet from 2016 to 2021
Internet penetration Mobile penetration +3.7% p.a.
+5.7% p.a. 63.9% 61.8% 59.7% 57.5% 55.4% 53.2% 50.5% 48.8% 46.9% 44.5% 41.6% 38.2%
2016 2017 2018 2019 2020 2021
Source: Statista Digital Market Outlook Note: Figures account for total world population using the internet / a smartphone within the last 12 months 7 Connectivity Many people still lack internet access, particularly in the most populous countries Internet penetration per country in 2016 (in % of total population)
Internet penetration rate
> 80%
> 70%
> 60%
< 60%
Not included
Source: Statista Digital Market Outlook Note: Only includes countries listed in the Digital Market Outlook 8 Connectivity Web consumption per user via Laptop or Desktop PC is highest in Brazil Time spent online via Laptop/Desktop PC (hours per day) 2012 2016 5:28 Brazil 5:36 5:06 United States 4:43
Canada 4:23 4:27 4:30 Italy 4:22
United Kingdom 4:07 4:16 4:08 France 3:57 4:03 Spain 3:55 3:38 Germany 3:36 4:39 China 3:29 3:45 South Korea 3:16
Source: Statista Digital Market Outlook Note: Data is based on internet users aged 16+; non-internet users are excluded from averages 9 Connectivity In a global comparison, broadband speed is fastest in East Asia and Scandinavia Average broadband speed in Top10 and selected countries (in Mbps1)
South Korea 1 23.6 Hong Kong 2 20.1 Norway 3 20.0 Sweden 4 19.7 Switzerland 5 18.4 Singapore 6 18.2 Japan 7 18.0 Finland 8 17.6 Netherlands 9 17.3 Latvia 10 16.9 … United States 12 16.3 United Kingdom 20 14.9 Germany 26 13.7 France 49 9.7 China 85 5.7
Source: Akamai Technologies Note: Figure refers to Q3-2016; countries covered: broadband ranking – 147 1: Megabits per second 10
“Mobile is the future, and there is no such thing as communication overload.”
Eric Schmidt, Executive Chairman of Alphabet, Inc.
11 Connectivity Smartphone sales reached almost 1.5 billion in 2016, with Samsung being the biggest vendor Global smartphone shipments (in million) and market shares per OEM1
1,471 1,437 Others Xiaomi 2 1,302 2 Lenovo 35.6% Vivo 2 Oppo 2 1,020 Huawei 2 3.1% Apple 4.0% 5.3% Samsung 725 6.8%
9.5% 495
14.6% 305
21.2%
2010 2011 2012 2013 2014 2015 2016
Source: IDC, Gartner 1: Original Equipment Manufacturer 2: Shipment information not available for each year; if no information available, sales are included in “Other” 12 Note: Estimated figures for Lenovo and Xiaomi in 2016; market shares may not sum up in 100% due to rounding Connectivity Android has become the dominating mobile OS, while Apple’s iOS has maintained market share Worldwide smartphone operating system market share1 Others BlackBerry Symbian Windows iOS Android
100% 14.4%
84.8%
14.4%
3.9% 2009 2010 2011 2012 2013 2014 2015 2016
Source: Gartner OS = Operating System 1: based on worldwide unit sales 13 Connectivity Cross-device, Android even overtook Windows as the dominating OS for desktop and mobile Global operating system market share from Feb 2016 to Mar 2017 Windows Android iOS OS X Market share (in %) 50 Android 37.93% 45
40
35
30 Windows 37.91% 25
20
15
10
5
0 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17
Source: StatCounter.com 14 Connectivity Advanced mobile devices and a growing number of apps increase time spent on mobile devices Time spent online via mobile device per user (hours per day) 2012 2016 1:54 Brazil 4:48 1:48 China 3:03 1:35 United States 2:37 1:37 Italy 2:34 1:52 Spain 2:11 1:35 South Korea 2:10 1:14 Canada 2:10 1:16 United Kingdom 2:09 1:20 Germany 1:37 1:01 France 1:32
Source: Statista Digital Market Outlook Note: Data is based on internet users aged 16+; non-internet users are excluded from averages 15 Connectivity Being ‘always online’ leads to larger mobile data traffic per device Estimated data traffic per smartphone (in gigabytes per month)
Central and Western Eastern Europe 2021 Europe
2015 11.0 18.0
22.0 1.4 1.9
3.7
North America Asia Pacific 6.5
1.0 6.0 7.0 1.0 Latin America 1.4 Middle East and Africa
Source: Ericsson Mobility Report 16 Connectivity The sevenfold increase in global mobile data traffic is mainly driven by online video streaming Global mobile traffic forecast per segment (in petabytes per month)
Web, data, and VoIP Consumed via 85.8% Video streaming smartphone Audio streaming File sharing 48,360 85.2% 6,435 1 Petabyte = 1 million Gigabyte
84.7% 34,531
5,539 83.8% 24,452 82.8% 4,675 38,148 81.3% 16,792 26,068 3,780 11,266 17,565 7,241 2,939 11,415 2,154 7,225 4,375 2,674 560 1,621 2,104 152 259 843 403 1,194 592 821 1,103 2016 2017 2018 2019 2020 2021
Source: Cisco System; figures include only cellular mobile traffic (Wi-Fi or small cell from dual-mode devices are excluded) Note: Other mobile devices include Tablets, mobile PCs, M2M (incl. wearables), non-smartphone mobile phones, e-readers and portable gaming consoles 17 Connectivity Mobile connection speed varies a lot between countries, with disappointing speed in the U.S. Average mobile speed in Top10 and selected countries (in Mbps1)
United Kingdom 1 23.7 Belgium 2 19.3 Norway 3 17.4 Finland 4 16.9 Spain 5 13.4 UAE 6 13.3 Ireland 7 13.2 Germany 8 13.1 Austria 9 13.0 Australia 10 12.8 … France 13 12.4 Japan 16 11.6 South Korea 18 11.2 China 31 8.9 United States 38 7.5
Source: Akamai Technologies Figure refers to Q3-2016; countries covered in mobile connection ranking – 61 Note: Evaluation of mobile connection speed for each country is based on a minimum of 25,000 observed unique IPv4 addresses 18 1: Megabits per second
Connectivity Pokémon Go was the most popular mobile game for iPhone users across the globe Most downloaded iPhone apps per category and country in 2016
Categories covered: Shopping, Music, News, Gaming, Social Networks
U.S. Germany France
China U.K.
Kleinan Spotify Spiegel Amazon Pandora CNN Wish Deezer Le Monde zeigen Online
Pokémon Messenger Pokémon Messenger Go Kugou Pokémon WhatsApp eBay Spotify BBC News Go Taobao Toutiao Music Go
Pokémon WhatsApp King of Go WeChat Glory
In cooperation with 19 Social Media
“If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.”
Jeff Bezos, Founder and CEO of Amazon Social Media In 2016, Social Media platforms connected 2.8bn people, more than 1/3 of the world population Selected countries in terms of Social Media MAU1 (in million)
Global 2,789 Rest of the world 1,059 China 787 United States 214 India 191 Brazil 122 Japan 64 Russia 56 Turkey 48 62% United Kingdom 42 of global Social Media South Korea 42 users France 36 Germany 33 Italy 31 Spain 25 Canada 23 Australia 16
Source: wearesocial, InternetWorldStats, Statista Digital Market Outlook 1: MAU = Monthly active users 22 Social Media Users in Brazil are connected to Social Media for more than 4 hours a day Avg. time users spend on Social Media platforms (hours per day) 2012 2016 3:03 Brazil 4:18
United States 1:49 2:33 1:55 Italy 2:21 1:35 United Kingdom 2:08 1:33 Canada 2:02
Australia 1:42 2:01 1:31 China 2:00 1:47 Spain 1:57 1:31 France 1:49 1:26 Germany 1:27
Source: Statista Digital Market Outlook Note: Data is based on internet users aged 16+; non users are excluded from averages 23 > 50,000,000,000
More than 50 billion messages are sent through WhatsApp every day.
Source: Facebook (February 2017) Social Media Facebook has the biggest Social Media reach, followed by Chinese tech-company Tencent MAU1 of selected social networks and messaging services (in million) Facebook Inc. Tencent Inc. Others
Facebook 1,871
Whatsapp 1,200
Messenger 1,200
QQ 877
WeChat 846
Instagram 700
Qzone 632
Twitter 317
Snapchat 2 300
Weibo 297
Pinterest 150
VK 90
Source: We Are Social, Hootsuite, Techcrunch, 1: MAU = Monthly active users, as of January 2017; WhatsApp and Facebook Messenger as of March 2017 2: Estimation as Snapchat only reports daily active users 25
Social Media Facebook and LinkedIn Social Media exits1 were the most expensive per user to investors Social Media exits (acquisition or IPO) in comparison Monthly active users Price per MAU2 (in m) (in US$) Facebook
1,000 106
800 WhatsApp
600
Snapchat 400 Tumblr LinkedIn 55
4 Instagram 65
200 Twitter 100 100 24 163 Exit 0 (US$m ) 0 5,000 10,000 15,000 20,000 25,000 100,000 105,000 110,000
Source: Company Information, Yahoo! Finance, Business Insider, Forbes Note: Figures for monthly active users refer to the time of exit 1: Acquisition or IPO 26 2: MAU = monthly active user
Social Media Snapchat pre-IPO revenue per user performed well compared to its biggest competitor Global avg. revenue per user in the eight quarters before IPO (in US$) Snapchat Facebook 1.38 1.26 1.26 1.24 1.21 1.14 1.05
0.94 0.90 0.84
0.50
0.31 0.32
0.18
0.05 0.06
Q2- ’10 Q3- ’10 Q4- ’10 Q1- ’11 Q2- 11 Q3- ’11 Q4- ’11 Q1- ’12 Q1-’15 Q2-’15 Q3-’15 Q4-’15 Q1-’16 Q2-’16 Q3-’16 Q4-’16
Sources: Snap Inc., Facebook Inc. 27 Social Media Post-IPO development is nothing to worry about for Snapchat Stock prices of Snap, Facebook and Twitter in the first 30 days after IPO Snap Inc. Facebook Inc. Twitter Inc. 1st 30 days IPO-to-
IPO: 3/2/2017 5/18/2012 11/7/2013 change date
US$57.5 +28.0% - 67.6%
US$44.9 US$39.1 US$38.2 US$31.1 -18.7% +272.1% US$25.9
US$19.5 US$20.2 -17.5% -15.8% US$24.5
Low-point
IPO 0 11 12 13 30 Days after IPO
Source: Yahoo! Finance Note: Figures as per 4-19-2017; all stock prices are closing prices; dividends are not considered 28 Social Media If you are not Facebook, it remains challenging to transform Social Media into a profitable business FY2016 results of listed U.S. Social Media platforms (in US$ million )
27,638 Facebook 10,217
1 3,868 Linkedin -162
2,530 Twitter -457
404 Snapchat Revenues -515 Net profit / loss
Source: Company Information, as of Mar 2017 1: Statista estimated financial results for Q4-2016 29 Platform Economics “A platform is a plug-and-play business model that allows multiple participants (producers and consumers) to connect to it, interact with each other and create and exchange value.”
Twitter Platform Economics The success of a digital platform is dependent on its external ecosystem Factors determining successful platforms
Connection Gravity Flow
Simplicity for partners to Capability to attract Promotion of co-creation plug in, share and transact producers and consumers and exchange of value
Source: Harvard Business Review 32 Platform Economics Digital platforms with varying business models can be found in multiple industries Marketplace examples and their business models
Advertising Transactions Search engines Application stores store
Social Media Ride sharing Didi Chuxing
Classifieds Market places Digital Platforms
Subscription Freemium Pay-as-you-go Digital Media Repository Infrastructure
Source: Statista Research 33 Platform Economics The platform landscape consists of White Sharks, Swordfish, and Piranhas Platform economics in nutshell
Digital Digital Digital White Sharks Swordfish Piranhas
- At the top of the food chain - - Big, fast, rarely get eaten - - Small but aggressive for prey -
› (Very few) digital economy leaders › (Few) big industry shaping players › (Many) product specific players › Wide, diverse product portfolio › Deep, vertical specific products › Huge, product centric competition › Gigantic assets › Already near peak growth › Peak growth not yet reached
Source: Statista Digital Market Outlook 34 Platform Economics Huge Chinese rivals are catching up on the big four U.S. platforms Top 15 publicly listed platforms by market cap (in US$ billion) Rank Company Country Market Cap
1 Apple 743 2 Google 574 3 Amazon 431 4 Facebook 404 5 Alibaba 276 6 Tencent 270 7 Netflix 62 ∑ 8 Baidu 60 US$3,047bn 9 Paypal 51 10 JD.com 46 11 Yahoo! 45 12 Ebay 37 13 Snap 24 14 Rakuten 14 15 Twitter 10
Source: Yahoo! Finance as per 04-12-2017 35 Platform Economics VC-backed platforms are vertically focused and 1/3 of the Top15 is located in China Top 15 privately held, VC-backed platforms by market cap (in US$ billion) Rank Company Category Country Market Cap
1 Uber Ride Sharing 68 2 Xiaomi Consumer Electr. 46 3 Didi Chuxing Ride Sharing 34 4 Airbnb Online Travel 29 5 Lu.com E-Commerce 19 China 6 InternetChina Internet Plus PlusFinancing/Lending 18 7 WeWork Collaboration 17 ∑ 8 Pinterest Social Media 11 US$304bn 9 Toutiao Digital Media 11 10 Flipkart E-Commerce 10 11 Dropbox Collaboration 10 12 Stripe Online Payment 9 13 Spotify Digital Media 9 14 Snapdeal E-Commerce 7 15 Lyft Ride Sharing 7
Source: CB Insights as per 04-12-2017 36 Google Amazon Facebook Apple Platform Economics The biggest White Sharks in the digital economy: Google, Amazon, Facebook, and Apple Google, Amazon, Facebook and Apple key figures
Founded: 09-1994 Founded: 05-1994 HQ: Mountain View, California HQ: Seattle, Washington CEO: Sundar Pichai (since 10-2015) CEO: Jeff Bezos (since 05-1996) Revenues1: US$90.23 billion Revenues1: US$135.99 billion Net income1: US$19.48 billion Net income1: US$2.37 billion Employees: 69,953 Employees2: 341,400 Market cap: US$558.1 billion Market cap: US$407.0 billion
Founded: 02-2004 Founded: 04-1976 HQ: Menlo Park, California HQ: Cupertino, California CEO: Mark Zuckerberg (since 2004) CEO: Tim Cook (since 08-2011) Revenues1: US$27.64 billion Revenues: US$215.64 billion Net income1: US$10.22 billion Net income: US$45.69 billion Employees: 17,048 Employees: 116,000 Market cap: US$399.5 billion Market cap: US$727.4 billion
Source: Company Information, Yahoo Finance; Note: All figures refer to end of fiscal year 2016, except market cap which is as of 03-10-2017; figures related to Google correspond to Alphabet Inc. conglomerate 1: Unaudited as per released financial results 38 2: Full-time and part-time employees Platform Economics Revenues of the biggest four U.S. players show consistent growth Google, Amazon, Facebook and Apple global revenues (in US$ billion) 2012 2013 2014 2015 2016 CAGR +8.3% 231.3 214.2
183.2 170.9 CAGR +15.8% CAGR +22.2% CAGR +52.7% 156.0 136.0
107.0 89.7 89.0 73.6 74.5 65.8 59.7 61.1 50.0
27.6 17.9 12.5 5.1 7.9
Google Amazon Facebook Apple
Source: Company Information Note: FY2016 figures for Google, Amazon, Facebook are unaudited as per released financial results 39 Platform Economics Apple has the highest net income, while Facebook has just started to make big money Google, Amazon, Facebook and Apple global net income (in US$ billion)
10.62 12.73 14.14 16.35 19.48
-0.04 0.27 -0.24 0.60 2.37
0.05 1.50 2.94 3.69 10.22
41.73 37.04 39.51 53.39 45.69
2011 2012 2013 2014 2015 2016
Source: Company Information Note: The size of circles corresponds to net income; FY2016 figures for Google, Amazon and Facebook are unaudited financial results 40 Relationships with their users are key to the biggest digital platforms’ successes User touchpoints of Google, Amazon, Facebook and Apple
IT & Infrastructure Aquila Apple SIM
Artificial Intelligence Google Assistant Jarvis Siri
Home Hardware Devices Pixel Chromecast etc.
Whatsapp facebook Communication & Messaging Google+ Allo Messenger
Digital Media & Entertainment facebook.com/gaming
-Integration Alexa integration CarPlay Connected Car & e-Mobility (Transportation)
etc. Facebook E-Commerce & Retail iBeacon store ‘Purchase on Google’ ‘Buy-Button’ -Integration FinTech & Payment (Friend-to-Friend Payment)
Amazon Maps API, Google Maps Apple Maps Navigation & Location services MAPS.ME integration Facebook Business, Advertising Apple Search Ads AdExchange Instagram Business
Source: Statista Research 41 59,141
Every second Google receives 59,141 search requests. On a single day, this number totals over 5.1 billion.
Source: internetlivestats.com Platform Economics Google’s extensive product portfolio covers nearly all aspects of the digital experience Google product portfolio Entertainment VR/AR Education Designing Android System
Google Youtube Tilt Google Tango Education Google Scholar Nik Web Google Android Android Android Android Android Google Android Play Music Brush Expeditions Classroom Collection Designer Fonts Auto Tablet OS One Phones Play Apps Pay
Data Social E-Commerce Navigation Business & Marketing Play Chrome- Analysis Newsstand cast Google Google Google Trusted Google Earth Maps Google Maps Google Maps Waze AdWords AdMob Google+ My Allo Duo Store Stores Express for Work Business View Brands Busines YouTube Play Google Kids Games Trends Life
Local DoubleClick Google Shopping YouTube Google Analytics Messenger Google+ Google Google Google Inventory Ads by Google Campaigns Gaming Play Fit One Today Flights Internet Browser
News Google Play Google Zagat Google Project Fi Merchant AdSense Tag Finance Movies & TV Cloud Platform Voice Hangouts Chrome Chromebook Chrome Chrome Camera Center Manager for Work Web Store
Blogger Google Google Office Hardware Cast Surveys
Search Engine Drive Forms Drawings Slides Gboard Google Docs Google G Suite Google Android Google Nexus Cardboard Smartbox Input Tools Sync Cloud Print Wear Goggles
Search Google Search Search Google Inbox Google Google Android Google Gmail Sheets Sites Translate Pixel Home Google Wifi Daydream OnHub for Work Console Alerts by Gmail Domains Groups for Work Calendar View
Source: Google 43 “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
Jeff Bezos, Founder and CEO of Amazon Platform Economics The key to Amazon’s success is Jeff Bezos’ “Day 1” philosophy Amazon revenue development from foundation to 2016 (in US$ million)
135,987
107,006 Vision statement: ‘Our vision is to be earth's most customer centric company […]’ 88,988
74,452
61,093
48,077
Mission statement: 34,204 ‘Earth’s biggest book store’ 24,509 19,166 14,835 8,490 10,711 5,264 6,921 2,762 3,122 3,933 1 16 148 610 1,640 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Amazon, Inc. 45 Platform Economics About 32% of U.S. e-Commerce customers subscribe to Amazon Prime Amazon Prime subscribers in the United States (in million users)
80
63
54
44 40
28 25
December 2013 June 2014 December 2014 June 2015 December 2015 June 2016 Mar 2017
Source: Consumer Intelligence Research Partners, Statista Digital Market Outlook Note: 249 million e-Commerce users in the U.S. in 2016 (Statista estimates) 46 Platform Economics Amazon is far more than just an e-Commerce giant; it also controls the public cloud landscape Global public cloud infrastructure1 market share (% of revenue) in Q4-’16
40%
Public cloud infrastructure revenues are estimated at over US$7 billion per quarter
23%
18% 18%
Next 10 Long tail of providers small providers
Source: Synergy Research Group 1: includes platform as a service (PaaS) and infrastructure as a service (IaaS) revenues 47 300,000,000,000 gigabytes
Facebook stores more than 300 million gigabytes of user data. This data corresponds to 126 digital books about each active user.
48 Platform Economics Facebook has 1,860m MAU1 with 85.2% of them located outside of North America Facebook key facts 85.2% daily active users 1,860m outside North America monthly active users 5m Instagram business 4m profiles 65m businesses directly business pages advertising 300,000 translators
84% 101 Feb 2009 mobile share of available advertising revenues invention of the languages ‘Like’ button
Source: Facebook Inc. Note: all figures as of Q4 ’16 1: MAU = monthly active user 49 Platform Economics Facebook’s active user base has been consistently growing Global number of Facebook’s monthly active users (in million users)
1,860 1,788 1,712 1,654 1,591 1,545 1,490 1,441 1,393 1,317 1,350 1,276 1,228 1,189 1,155 1,110 1,056 1,007 955 901 845 800 739 680 608 550 482 431 360 305 242 197
2009 2010 2011 2012 2013 2014 2015 2016
Source: Facebook Inc. 50 Platform Economics Imagine if Facebook’s worldwide average revenue per user equaled that of North America Facebook‘s average revenue per user, by user geography in US$ 2012 2016
358% 228% 210% 153% 200%
62.23
19.40 15.98 13.58 7.29 5.91 4.66 5.32 2.35 1.84
U.S. and Canada Europe Asia-Pacific Rest of the World Worldwide
Source: Facebook Inc. 51 “There is no chance that the iPhone is going to get any significant market share.”
Steve Ballmer in 2007, Former CEO of Microsoft
52 Platform Economics With nearly 70% revenue share in Q1-’17, the iPhone is the biggest success in Apple’s history iPhone revenue as percentage of Apple’s total revenue since 20071
100%
90%
80% 69.4% 69.4% 70%
60%
50%
40%
30%
20%
10%
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Company Information 1: Fiscal quarters; Apple’s fiscal year ends in September 53 Platform Economics Apple is the biggest vendor in a shrinking tablet market Global tablet shipments in 2016 in millions
230.1 219.9 Others 207.2 Huawei Lenovo Amazon 174.8 Samsung Apple 143.4 41.6%
5.5% 6.4% 71.4 6.9%
15.2%
17.9 24.4%
2010 2011 2012 2013 2014 2015 2016
Source: IDC 54 Platform Economics The number of active Apps in Apple’s App Store is predicted to reach over 5 million by 2020 Projected number of active apps in Apple’s App Store worldwide by 2020 million 6 Forecast
5
4
3
2
1
0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: SensorTower 55 Platform Economics Stock market prices reflect the tech-giants’ development U.S. tech-giants vs. Top U.S. non-tech giants stock market development Stock price Combined market cap1: Stock price Combined market cap1: in USD US$1,070 billion in USD US$2,119 billion 900 900 +339% 850 850 +188% 800 800 750 750 700 700 650 650 600 600 550 550 500 500 450 450 400 400 350 350 300 300 250 250 200 200 150 -0.9% 150 +342% 100 +14.8% 100 +136% +43.0% 50 50 +61.4% 0 0 01/12 01/13 01/14 01/15 01/16 01/17 01/18 01/12 01/13 01/14 01/15 01/16 01/17 01/18
Source: Yahoo! Finance Baseline for stock prices are GE, T, WMT, XOM, GOOGL, AMZN, AAPL, FB 1: Figures as per 03-10-2017; all stock prices are closing prices; dividends are not considered 56 Platform Economics Only investing $1,000 in bitcoins would have been more profitable than in digital platforms Pay-off in Mar 2017 for a US$1,000 investment in Jan 2012
Gold 778
991
1,148
1,429
1,614
2,364
NASDAQ 2,805
2,882
4,387
4,419
207,071
Source: Yahoo! Finance; Coindesk.com Baseline for stock prices are GE, T, WMT, XOM, GOOGL, AMZN, AAPL, FB (NASDAQ) Note: Dividends are not considered 57
Platform Economics As many western platforms struggle in China, Chinese competitors have stepped up Major digital platforms and their appearance in the Chinese market
1.45% search engine 0.8% e-Commerce Fail and retreat market share market share a decade ago
Acquired by Licensing partnership 0.49% search engine Didi Chuxing instead of own business market share
BANNED 0.0001% share of China e-Commerce transactions
Source: Statcounter.com, iResearch China, CNN, Bloomberg, Techcrunch, ChinaSalesCo.com, Fortune.com, Marketwatch.com 58 Baidu Alibaba Tencent Huawei Platform Economics The untapped potential of 676m awakening digital customers makes China unique Online vs. Offline population in China and the U.S. in 2016
10,000,000 people
Online population 264 million
702 million
Offline population 59 million (growth potential)
676 million
Source: Statista Digital Market Outlook 60 Platform Economics Baidu, Alibaba, Tencent, and Huawei (BATHu) are China’s overlooked tech-giants BATHu key figures
Founded: 01-2000 Founded: 04-1999 HQ: Peking HQ: Hangzhou CEO: Robin Lu (since 01-2004) CEO: Daniel Zhang (since 05-2015) Revenues1: US$10.20 billion Revenues: US$15.69 billion Net income1: US$1.68 billion Net income: US$11.06 billion Employees: 45,887 Employees: 36,446 Market cap: US$60.04 billion Market Cap: US$258.47 billion
Founded: 11-1998 Founded: 1987 HQ: Shenzhen HQ: Shenzhen CEO: Ma Huateng (since 11-1998) CEO: Ren Zhengfei (since 1988) Revenues1: US$21.97 billion Revenues: US$75.10 billion Net income1: US$5.99 billion Net income: US$5.34 million Employees: 38,775 Employees: 180,000 Market cap: US$257.57 billion Market cap: not listed
Source: Company Information; Yahoo! Finance Note: Alibaba Group FY2016 ended on 03-31-2016; revenues converted from RMB to US$ as per annual reports respectively press releases 1: Unaudited as per FY2016 released financial results 61 Platform Economics BATHu’s compound annual growth rates from 2012 to 2016 are consistently above 20% BATHu global revenues (in US$ billion)
2012 2013 2014 2015 2016 CAGR +20.7% 75.1
60.8
46.5
39.5 35.4
CAGR +29.9% CAGR +48.6% CAGR +32.9% 22.0 15.7 15.9 12.3 12.7 10.2 10.2 10.0 7.9 8.5 5.3 5.7 7.0 3.6 3.2
Baidu Alibaba Tencent Huawei
Source: Company Information Note: Tencent and Baidu monetary figures for FY2016 yet unaudited Revenues converted from RMB to US$ as per annual reports respectively press releases 62 Platform Economics Alibaba’s FY16 net income was almost fifteen times higher than 5 years ago BATHu global net income in US$ billion
1.67 1.71 1.97 5.01 1.68
0.75 1.43 3.77 3.92 11.06
2.05 2.57 3.85 4.49 5.99
2.47 3.47 4.50 5.69 5.34
2011 2012 2013 2014 2015 2016
Source: Company Information Note: The size of circles corresponds to net income; Tencent and Baidu monetary figures for FY2016 not yet unaudited Net income converted from RMB to US$ as per annual reports respective press releases 63 Platform Economics Accompanied by their financial prosperity, Chinese platforms invest in U.S. startups VC-investments of Baidu, Alibaba and Tencent in the U.S.
2014 2015 2016
IndoorAtlas Cloudflare Taboola Dynamic Yield ZestFinance IndoorAtlas GWC Velodyne LiDAR
Peel Tango Lyft Snap Inc. Barefoot Magic Leap Kabam 1stdibs Mei.com Quixey Networks PlaceIQ Lyft
Playdots Moon Express, Inc. Circle Medical CloudMedx Inc Stae Tile Kamcord Vurb Watsi Scanadu Clear Labs Paradox Heirloom Women.com Artillery Skymind Barefoots Interactive Technology Scaled Inference FlightCar VC Mobile Networks Planetary Resources Tile TapZen Clinicloud Entertainment Inc. Petuum Kamcord Heirloom, Inc. Whisper Nav Cyanogen Skymind Diffbot Woqu.com Weebly Nixie Labs Satellogic Nav Discord AltspaceVR HomeHero Robot Payoff Entertainment Tute Genomics Meta Discord Tissue Analytics SketchMe Lyft Pocket Gems
Source: Crunchbase 64 1st
Baidu was the first Chinese company to be listed in the NASDAQ 100 index.
Source: CNBC
Platform Economics Although primarily operating in China, Baidu dips its toes into new markets Baidu key facts
Stock Market 1st Chinese company listed in NASDAQ 100 Request Origin Performance 1) China: 91.5% 2nd largest search 2) Japan: 3.2% engine in the world 3) South Korea: 1.5%
Subsidiaries Popularity Tokyo, Sunnyvale (CA), Chinese Rank1: 1 Jakarta, Bangkok, Global Rank1: 4 Cairo, Sao Paulo Top Tech Keywords 1) VR 2) Gravitational wave 3) AlphaGo
Source: Chinainternetwatch.com, StatCounter.com, Alexa.com 1: The rank is calculated using a combination of avg. daily visitors and pageviews over the past three months 66 Platform Economics In China, Baidu has strong brand awareness, with a large domestic market share of over 75% Search engine market share in China (in percentage)
Market share in % 100
90
80 75.1%
70 74.8% 79.1% 70.3% 69.8% 60 10.2%
50 54.4% 7.8% 40 3.7% 30
20 1.8% Others
10 1.4% 0 Dec Dec Dec Dec Dec Apr ’12 ’13 ’14 ’15 ’16 ’17
Source: StatCounter.com 67 Platform Economics AI will further improve search engines; Baidu’s face recognition software is a good example Face recognition software comparison as %-error in face recognition
Human-Level: 0.80% Baidu 0.23%
Google 0.37%
University of 0.53% Hong Kong
Facebook 1.65%
Microsoft 3.67%
Source: Massachusetts Institute of Technology Note: Figures as of 2015, based on the Labeled Faces in the Wild (LFW) dataset 68 175,000
Chinese e-Commerce giant Alibaba processed 175,000 transactions per second on the peak time of “Singles’ Day” in 2016. At the end of the day the number of orders processed totaled 657 million.
Source: Alibaba Group
Platform Economics The Alibaba Group has evolved to become a platform with multiple user touchpoints Alibaba Group Overview
Digital Media Others
E-Commerce
Source: Alibaba Group Core Business 70 Platform Economics Singles' Day is the largest shopping day in the world, and Alibaba benefits most of it U.S. Cyber Monday spending and Alibaba Single’s Day GMV (in US$bn)
Cyber Monday Single’s Day 17.79
14.30
9.30
5.80
3.45 3.04 2.65 2.98 1.98 2.29 1.30 1.30 0.82 0.14
2010 2011 2012 2013 2014 2015 2016
Sources: Fundivo, Adobe, Alibaba Group, Tech in Asia, Thomson Reuters, MarketWatch 71 Platform Economics Alibaba’s fast growth demonstrates how software is much more scalable than warehousing Walmart and Alibaba quarterly key-figure comparison (in US$ billion)
Net Sales / GMV
140
120
100 Global net sales 80
60
40 Chinese gross merchandise value
20
0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016
Source: Company Information Note: all figures correspond to calendar years and quarters; financial years do not equal calendar years 72 “Will Tencent join the likes of Amazon, Google, Facebook and Twitter? […] They already are in that league. The rest of the world just doesn’t know it.”
Aditya Rathnam, Co-Founder of Kamcord Platform Economics China‘s largest tech company can be compared with its U.S. Social Media counterpart Key financial and operating metrics of Tencent and Facebook in 2016
Facebook Tencent Key Financials Monthly Active Users (in US$ billion) (in million) 27.64
Facebook 1,871 21.97 Whatsapp 1,200
Instagram 700
10.22 QQ 877
5.99 WeChat 846
Qzone 632
Revenue Net Profit
Source: Company Information, We Are Social, Hootsuite 74 Platform Economics WeChat has a diverse business model with multiple revenue sources Direct comparison of WeChat and WhatsApp WeChat WhatsApp
Geographical focus China US Europe Monthly active users 846 million 1,200 million Price Free of Charge Free of Charge Monetization Transaction Fees & Mobile Advertising › Social & Communication Texting Group Photography Video Location Video Texting Group Photo- Video Chats Chat Chats graphy
Voice Official Meet Voice Moment QR Code Location Video Voice Message Accounts Strangers (Shake) Chat Feeds Reader Chat Message › Leisure & Commerce Newsfeeds Translation Taxi Reservation Event Organization
Price Checks e-Commerce Online Ticketing Mobile Banking › Media & Gaming Music Mobile Gaming Desktop Gaming
Source: Company Information, OLMA Capital Management 75 5G
Huawei aims at playing a central role in 5G mobile technology, the next big evolutionary step in mobile connectivity. Along with large R&D expenditures, Huawei also initiated a number of collaborative research initiatives – widely known as Wireless X labs.
76 Platform Economics Huawei overtook Apple and became one of the most R&D-intensive tech companies R&D spending of major global tech-companies in 2016 (in US$ billion)
Google 13.95
Samsung 12.84
Intel 12.70
Amazon 12.59
Microsoft 12.00
Huawei 11.00
Apple 10.05
Facebook 5.92
Oracle 5.79
IBM 5.75
Sony 4.32
Dell 2.64
Source: Company Information Note: Dell figures refer to FY2017 as this year ended on 01-31-2017 77 Platform Economics Huawei and Apple show similar revenue growth
Annual revenue comparison of Huawei and Apple from ’02-’16 Annual revenue (in US$ billion)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
5.7 6.2 8.3 13.9 19.3 24.6 37.5 42.9 52.2 108.2 156.0 170.9 183.2 231.3 214.2
2.1 2.7 3.8 6.0 8.5 12.3 18.0 21.9 27.4 32.4 35.4 39.5 46.5 60.8 75.1
4,029% Indexed revenue development (year 2002 = 100%) 3,732%
3,192% 2,977% 2,717%
1,885% 3,529% 2,859% 909% 2,186% 747% 1,854% 653% 1,522% 1,661% 144% 242% 429% 1,287% 100% 108% 281% 336% 1,027% 127% 180% 848% 100% 400% 580% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Company Information, Statista Digital Market Outlook Revenues converted from RMB to US$ as per annual reports respectively press releases; years 2007-2011 are calculated with the avg. exchange rate of the specific year with exchange rates from www.oanda.com 78
Baidu, Alibaba, Tencent and Huawei vs. Google, Amazon, Facebook and Apple – Who is taking the lead?
79 Platform Economics BATHu may catch up in the digital economy, but the big U.S. players remain the top innovators Research & Development expenditures (in percent of total revenues) 2012 2013 2014 2015 2016 Total Research & Development expenditures: US$141.4bn Total Research & Development expenditures: US$48.6bn
27%
21% 21% 21%
18% 17% 14% 16% 14% 15% 15% 13% 14% 14% 15% 14% 14% 13% 12% 10% 10% 10% 10% 10% 9% 9% 9% 8% 9% 8%
5% 3% 3% 2% 3% 2% 2% 2% 2% 2%
Source: Company Information; YCharts.com Note: Revenues and R&D expenditures converted from RMB to US$ from annual reports respectively press releases 80 Platform Economics Comparatively, U.S. tech-giants remain ahead of their Chinese competitors Key-figure comparison: GAFA vs. BATHu
vs. vs.
Revenues US$bn 89.73 10.20 Revenues US$bn 135.99 15.69
CAGR1 ’12-’16 % 15.77 29.92 CAGR1 ’12-’16 % 22.15 48.63
Profit margin % 21.71 16.44 Profit margin % 1.74 70.5
R&D expend. US$bn 13.95 1.47 R&D expend. US$bn 12.59 0.34 Domestic market % 64.0 75.1 GMV US$bn 251.02 484.6 share
vs. vs.
Revenues US$bn 27.64 21.97 Revenues US$bn 214.23 75.10
CAGR1 ’12-’16 % 52.66 32.88 CAGR1 ’12-’16 % 8.26 20.73
Profit margin % 36.97 27.3 Profit margin % 21.33 7.1
R&D expend. US$bn 5.92 1.71 R&D expend. US$bn 10.05 11.00 Smartphone MAU3 m 1,871 877 m 215.4 139.3 shipments
Source: Company Information, IDC, WeAreSocial, comScore Note: Monetary figures converted from RMB to US$ sourced from annual reports respectively press releases 1: CAGR = Compound annual growth rate 2: Statista estimates 81 3: MAU = Monthly active users; only take into account the biggest single Social Media Platforms Facebook and QQ Platform Economics The Top 10 digital CEOs manage revenues of $846bn and own a combined fortune of $312bn Top 10 business people in the digital economy
Managed revenues (in US$bn) Private fortune (in US$bn) Google Search Results (in million) Tim 215.6 79.3 Cook 0.4
Lee 174.1 1.3 Kun-Hee 16.6
Jeff 136.0 6.0 Bezos 76.8
Larry 90.2 23.9 Page 40.5
Sadya 85.3 0.5 Nadella 0.1
Michael 58.2 Dell 20.5 67.2
Larry 37.1 0.8 Ellison 54.4
Mark 27.7 29.8 Zuckerberg 58.9
Jack 15.7 18.1 Ma 29.5
Elon 6.4 Musk 14.8 28.3
Source: Company Information, forbes.com, celebritynetworth.com, therichest.com Note: Jack Ma is founder of the Alibaba Group, in 05-2015 Daniel Zhang became CEO Managed revenues referring to FY2016; Private fortune as of 04-10-2017 82 Venture Capital 7,300,000,000 US$
In 2016 Didi Chuxing, the Chinese ride sharing company and major competitor of Uber, collected fresh capital funding totaling US$7.3 billion in order to strengthen its position in the Southeast Asian market
Source: PitchBook Venture Capital More deals and greater capital invested, bar 2016, complement growing average deal size Global venture financing from 2010-2016 (in US$ billion) Americas 18,157 17,992 Europe Asia 15,800 ROW 13,006 13,665 10,842 8,459 141 127
108
82 72
64 65 72 59
18 45 16 46 47 43 32 15 39 39 10 11 9 10 21 8 5 6 0 4 0 1 1 0 2 0 2010 2011 2012 2013 2014 2015 2016
Source: KPMG Enterprise, PitchBook Capital invested Deal count 85 Venture Capital “Software is eating the world” – at least in the case of VC financing Software sector share in venture financing in a regional comparison Americas Europe Asia Pacific
54% 47% 42% 39% 40% 36% 33% 33% 31% 33% 32% 31% 25% 24% 21% 21% 22% 22% 18% 17% 13%
2010 2011 2012 2013 2014 2015 2016
Source: KPMG Enterprise, PitchBook
86 Venture Capital The stereotype Unicorn1 in 2016: digital and most likely to be Chinese or American New VC-backed Tech Unicorns and Exits in 2016 40 out of 41 new Unicorns were highly Tech-related 31 out of 40 Tech Unicorns were Chinese or American
10 10 10 10 US$66.4 billion 2 8 valuation of the 2016 Tech Unicorns 5 US$34.4 billion 3 2 value of the 18 Tech Unicorn Exits
Q1/2016 Q2/2016 Q3/2016 Q4/2016
Skyscanner became Unicorn and exited in 2016
Source: CB Insights 1: Unicorn = Startup company with a company valuation of more than US$ 1.0 billion New Unicorns Exits > US$1 billion 2: Company valuation as per 03-15-2017 87 Venture Capital U.S. and Chinese players take the top spots in terms of global VC financing and funding Top 5 VC Financings and Funds in 2016 (in US$ billion)
Top 5 VC Financings Top 5 VC Funds
Baidu Didi 7.3 Capital 3.0 Chuxing Fund
Uber 5.6 TCV IX 2.5
Ant Andreessen 4.5 1.5 Financial Horowitz
Meituan Founders 3.3 1.3 Dianping Fund VI
Norwest Snap Inc. 1.8 Venture 1.2 Partners XII
Source: PitchBook 88 Venture Capital VC deals are primarily closed with male founders, particularly in the tech landscape Global VC deals for companies with at least one female founder
Percentage of deals Top industries 16.5% 16.8% 16.0% Consumer Goods & 28.2% 15.1% Recreation 14.2% Pharmaceuticals & 17.6% Biotechnology
11.4% Media 16.3%
Healthcare Services 9.4% 15.5% & Systems
Software 14.5%
Commercial 12.6% Services Healthcare Devices & 11.8% Supplies
Energy 7.5%
2010 2011 2012 2013 2014 2015 2016 IT Hardware 7.3%
Source: PitchBook 89 Venture Capital The U.S. and China are home to the greatest number of Unicorns, with Europe lagging behind Private companies valued at one US$ billion or more as of 03-27-2017
United States 99
China 45
India 9
United Kingdom 7
Germany 4
South Korea 3
France 2
Israel 2
Singapore 2
Sweden 2
Switzerland 2
10 other countries1 1
Source: CB Insights Unicorn = Startup company with a company valuation of more than US$ 1.0 billion 1: countries with one ‘unicorn’: Argentina, Colombia, Czech Republic, Indonesia, Japan, Luxembourg, Netherlands, Nigeria, South Africa, United Arab Emirates 90
AI, AR & VR 99.77%
Baidu has developed a facial recognition software that recognizes human faces with a 99.77% accuracy. This surpasses average human-level facial recognition and many Silicon Valley competitors.
Source: MIT AI, AR & VR There is a lot of activity in the Artificial Intelligence and Data Mining startup scene VC-backed companies with certain words in their company description Artificial Intelligence Deep Learning Machine Learning 2.18%
1.96%
1.55% 1.53% 1.49%
0.94%
0.74% 0.61% 0.61%
0.42% 0.31% 0.32% 0.33% 0.25% 0.34% 0.12% 0.07% 0.11% 0.00% 0.00% 0.13%
2010 2011 2012 2013 2014 2015 2016
Source: CB Insights 93 AI, AR & VR VC-backed companies with the terms Machine Learning, VR & AI drastically increased since ‘10 Change of VC-backed companies with given terms in their description
Rank Word % in 2010 % in 2016 Change Rank Word % in 2010 % in 2016 Change 1 Virtual Reality 0.0% 1.0% - 21 Human 1.7% 3.5% 106% 2 Machine Learning 0.3% 2.0% 507% 22 Connected 1.0% 2.0% 102% 3 Natural Language 0.2% 1.0% 507% 23 Genetic 0.8% 1.5% 102% 4 Ingredients 0.3% 1.2% 385% 24 Videos 0.6% 1.1% 91% 5 Cyber 0.3% 1.5% 355% 25 Risk 2.4% 4.2% 78% 6 Artificial Intelligence 0.4% 1.8% 337% 26 Intelligent 1.7% 3.0% 76% 7 Reality 0.3% 1.4% 325% 27 Algorithms 0.8% 1.3% 75% 8 Automates 0.3% 1.0% 304% 28 Treatments 0.8% 1.3% 75% 9 Sensors 0.3% 1.3% 294% 29 Audio 0.6% 1.0% 73% 10 Feedback 0.4% 1.3% 215% 30 Culture 0.6% 1.0% 73% 11 Seconds 0.3% 1.0% 203% 31 Women 0.6% 1.0% 73% 12 Minutes 0.4% 1.2% 191% 32 Body 0.8% 1.4% 70% 13 Oncology 0.4% 1.2% 191% 33 Healthy 0.8% 1.4% 70% 14 Therapy 0.7% 1.9% 188% 34 Language 0.8% 1.4% 70% 15 Modern 0.5% 1.4% 183% 35 Stream 2.4% 4.1% 67% 16 Tumor 0.4% 1.1% 167% 36 Threat 0.4% 1.5% 65% 17 Stealth 1.3% 3.3% 143% 37 Hand 2.1% 3.5% 65% 18 Workflow 0.7% 1.6% 143% 38 Labs 1.7% 2.8% 64% 19 Insurance 0.8% 1.9% 130% 39 Bank 0.8% 1.3% 58% 20 Software Platform 0.5% 1.1% 122% 40 Measure 1.4% 2.2% 57%
Source: CB Insights 94 AI, AR & VR Startups in the machine learning / AI segment have benefited from the largest VC funding Funding and number1 of startups working in the AI market, by category
Total funding (in million US$) 260 Number of companies
2,070
155 106 121 65 83 91 33 77 60
660 520 490 390 330 240 220 190 120
Machine Natural Computer Machine Smart Computer Virtual Gesture Speech Recommen- learning language vision learning robots vision personal control recognition dation (applications) processing (general) (general) (applications) assistants engines
Sources: Statista estimates, Medium 1: as of March 2016 95 AI, AR & VR AI will also enable human voices to become a new powerful communication layer Number of third-party skills available for Amazon‘s virtual assistant
10,000
5,000
3,000
1,000 135
Q1 ’16 Q2 ’26 Q3 ’16 Q4 ’16 Q1 ’17
Sources: Amazon, Press reports 96 AI, AR & VR Augmented & Virtual Reality may be the next big tech opportunity Estimated global virtual & augmented reality headset development
Augmented Reality Virtual Reality
Unit Shipments Revenue (in million) 72.0 (in US$ billion) 48.7
27.3 18.6
10.0 2.1 0.1 0.2 2016 2021 2016 2021
Source: IDC 97 AI, AR & VR Global VR revenues are expected to increase to almost US$40 billion by 2020 Forecasted VR hard- and software revenues by platform in US$ billion
40.4 Mobile Console 8.5 PC
22.7 15.6
5.8
12.1 8.3 3.0 16.3 6.4 4.5 2.0 3.6 0.8 8.6 1.8 1.2 4.6 1.6 2.6 2016 2017 2018 2019 2020
Source: Superdata via VRFocus 98 Table of Contents
Global Trends › Connectivity: Numbers behind the “always on” trend………………………….. 5 › Social Media: Love it, hate it, but accept that you need it…………………... 20 › Platform Economics: A story about White Sharks and Swordfish……… 30 › Venture Capital: Feed for new Tech-Unicorns…………………………………...... 83 › AI, AR and VR: The next big Technology Hype………………………………………. 91
Statista’s Digital Market Outlook › e-Commerce……………………... 106 › FinTech…………………………………. 148 › eServices……………………………. 117 › Digital Advertising…………….... 160 › eTravel ………………………………. 129 › Smart Home……………………...... 171 › Digital Media……………………...138 › Connected Car…………………….. 181
99 DMO The Digital Market Outlook (DMO) provides KPIs and insights for eight digital markets Statista Digital Market Outlook coverage
e-Commerce FinTech Fashion, Electronics & Media, Food & Personal Digital Payments, Business Finance, Care, Furniture & Appliances, Toys, Hobby & DIY Personal Finance
eServices Digital Advertising Event Tickets, Fitness, Dating Services, Banner Ads, Video Ads, Search Ads, Food Delivery Social Media Ads, Classifieds
eTravel Smart Home Online Travel Booking, Mobility Services Home Automation, Security, Home Entertain- ment, Ambient Assisted Living, Energy Mgmt.
Digital Media Connected Car Video-on-Demand, Digital Music, Connected Hardware, Vehicle Services, Video Games, ePublishing Infotainment Services
100 DMO The DMO markets and forecasts cover a broad range of products and services DMO scoping
B2C1 markets and revenues for… new2 products and services…
in over 50 regions and countries... covering 7 years, from ’15 to ’21.
1: B2B and C2C markets are excluded 2: Resale of used goods is not included 101 DMO Forecasts based on market-specific knowledge, enriched with macroeconomic developments Macroeconomic overview 2016
United States Europe1 China GDP / Capita: US$57,220 US$27,599 US$8,240 Population: 323.3 million 671.2 million 1,382.2 million Households: 126.6 million 269.3 million 399.6 million
81.9% 85.8% 72.2% 76.6% 67.9% Internet 50.9% penetration:
80.6% 70.6% 69.6% 60.2% 58.6% Mobile 44.9% penetration:
60.5% 64.6% 48.5% 53.6% 48.5% Social Media 37.3% penetration:
2016 2021 2016 2021 2016 2021
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 102 DMO In 2018, China will overtake the U.S. and will become the biggest digital economy Digital market1 development of the three major regions (in US$bn) U.S. China EU 5 2 1,135
1,028
901 874 824 765 763 698 633 626 575 549 515 500 476 434 390 351
2016 2017 2018 2019 2020 2021
Source: Statista Digital Market Outlook 1: including all revenues generated within the e-Commerce, eTravel, eServices, Digital Media and Connected Car market 2: including France, Germany, Italy, Spain and the United Kingdom 103 DMO In 2016, digital expenditure in % of household consumption per capita are the biggest in China Digital expenditure1 as share of household consumption per capita in ‘16
10.6%
5.0% 4.5%
U.S. China Euro EU 5 EU 52
Source: Statista Digital Market Outlook 1: including all revenues generated within the e-Commerce, eTravel, eServices, Digital Media and Connected Car market 2: including France, Germany, Italy, Spain and the United Kingdom 104
DMO E-Commerce is by far the biggest digital market people spend their money on Digital expenditure per capita in the major regions per category in ‘16 e-Commerce eTravel eServices Digital Media Connected Car
EU 51
997 623
18 273 13 101 1 41 US$1,777 10 US$362 US$1,096 78 24 63
54
355 584
Source: Statista Digital Market Outlook 1: including France, Germany, Italy, Spain and the United Kingdom 105 E-Commerce 12,000,000
Chinese online retailer Tmall ships an incredible 12 million boxes per day E-Commerce Global e-Commerce revenue is expected to almost double to US$2,108bn by 2021 Global1 e-commerce revenue (in US$bn) and CAGR2 16-21 by segment 2016 2021 +13.8% p.a. +10.2% p.a. +15.8% p.a. +11.5% p.a. +11.8% p.a.
633.53
472.62 440.72
332.13 342.88 290.61 252.75 218.35 199.04
104.67
Fashion Electronics & Media Food & Personal Care Furniture & Appliances Toys, Hobby & DIY
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 108 E-Commerce The top e-Commerce markets exhibit growth and maintain their position in global ranking Total e-Commerce revenue by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
376.18 China +17.4% p.a. 839.54
322.17 United States +8.5% p.a. 485.27
84.09 United Kingdom +8.2% p.a. 124.51
74.40 Japan +8.5% p.a. 111.80
56.25 Germany +7.6% p.a. 81.01
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 109 E-Commerce There are many product-specific big players in addition to large all-encompassing platforms Key players by segment and business model
Electronics & Food & Furniture & Toys, Hobby & Fashion Media Personal Care Appliances DIY Key Player Market Places
Online Retailer
Direct Seller
Source: Statista Digital Market Outlook 110 E-Commerce China will dominate the online fashion world with a turnover of more than US$285bn in 2021 Projected online turnover from fashion (in US$ billion)
China 285.3 Europe 260.5 USA 236.9 228.0 221.2 203.1 193.9 184.5 166.5 159.0 140.5 150.0 130.8 119.2 125.8 107.7 96.7 86.8
90.3 96.4 76.8 83.9 63.3 69.8
2016 2017 2018 2019 2020 2021
Source: Statista Digital Market Outlook
111 E-Commerce The Chinese B2C e-Commerce market outper- formed the U.S. both in size as well as in growth B2C e-Commerce turnover from 2015 to 20171 in US$ billion
470.1 China 376.2 298.9
353.7 U.S. 322.2 294.5 United 93.2 84.1 Kingdom 75.8
84.5 Japan 74.4 63.8
37.3 France 33.9 30.6
61.4 Germany 56.2 51.6 South 21.4 19.1 Korea 16.9
20.2 Canada 18.3 16.9
20.0 India 16.1 12.9 2017
16.1 2016 Russia 14.2 12.1 2015
Source: Statista Digital Market Outlook 1: Prediction 112 E-Commerce Transparency and simple processes are most important for online shopping delivery Most important aspects of online shopping delivery for customers
Clear information about delivery charges before purchase 92%
Simple and reliable returns process 88%
Free delivery on purchases over a particular value 86%
Free returns 86%
Rapid response customer service 83%
Landed cost calculator at check-out 79%
Knowing which company will deliver goods 71%
Variety of payment options 69%
Possibility to place an order anytime, anywhere, on any device 64%
Possibility to select speed of delivery 64%
Possibility to select the delivery company 51%
Source: IPC online survey with 23,331 respondents (Sept. to Oct. 2016) 113 E-Commerce Amazon leverages loyalty from Prime members; thus, incentivizing them is an important strategy Amount spent by U.S. Amazon customers in the past 12 months
Prime Members Non-Prime Members
46% Average spend per customer (past 12 months)
$2,486
34%
$544 26% 24%
Non-Prime 16% 13% 9% 10% 7% 5% 2% 3% 2% 3% 1% 0% 0% 0% Less than $100 to $500 $501 to $1,001 to $2,001 to $4,001 to $6,001 to $10,001 to $20,000+ $100 $1,000 $2,000 $4,000 $6,000 $10,000 $20.000
Sources: Morgan Stanley Research, AlphaWise 114 E-Commerce Despite being #1 in the U.S. and Europe, Amazon has not yet cracked the Chinese market Market share of e-Commerce websites in China (in % of B2C sales)
Tmall.com 56.6%
JD.com 24.7%
Suning.com 4.3%
Vip.com 3.5%
Gome.com.cn 1.2% B2C e-Commerce sales in 2016 Yhd.com 1.1%
Amazon.cn 0.8%
Dandang.com 0.7%
Jumei.com 0.5% US$376 billion US$322 billion
Others 6.7%
Source: iResearch China, U.S. Department of Commerce, Statista Digital Market Outlook 115 E-Commerce Online Shopping is not as profitable as you think
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116 eServices 1,400,000,000
Online dating app Tinder registers a daily average of 1.4 billion swipes on its platform
Source: Tinder eServices Food delivery is the most dynamic eServices market, with revenues expected to triple by 2021 Global1 eServices revenue (in US$ billion) and CAGR2 16-21 by segment 2016 2021 +23.6% p.a.
210.32
+15.2% p.a. +16.7% p.a. +5.0% p.a.
72.86
50.81
25.06 9.65 4.45 4.60 5.87
Event Tickets Fitness Dating Services Food Delivery
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 119 eServices An estimated eServices market value of US$86bn by 2021 will increase China’s lead over the U.S. Total eServices revenue by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
33.10 China +21.0% p.a. 85.99
25.28 United States +19.3% p.a. 61.18
6.95 United Kingdom +16.2% p.a. 14.69
5.01 Germany +17.7% p.a. 11.29
3.81 Japan +21.4% p.a. 10.02
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 120 eServices New market entrants create competitive pressures in the eServices market Selected key players by segment and market complexity
Event Tickets Fitness Dating Services Food Delivery
Startups1
Established players
Market complexity2
Source: Statista Digital Market Outlook 1: Founded after or in 2007 2: Estimate; considers value chain complexity and competitor landscape 121 eServices In Dating Services, different offerings are targeted at various audiences and types of relationship Dating portals/apps segmentation of selected players
Niche
BDSMSingles ChristianMingle
Whiplr Grindr WooPlus JDate Blued
OurTime ElitePartner VictoriaMilan Chemistry Baihe
AshleyMadison eDarling TanTan Audience/ coverage Audience/ Meetic Firstaffair Tinder LoveScout24 C-Date Lovoo Neu Match OkCupid Parship Momo Plenty of Fish Badoo Zoosk Mass
Type of relationship
Casual Headquarters: Serious
Source: Statista Digital Market Outlook Company information United States China Europe 122 eServices Sportswear giants are acquiring fitness apps; Under Armour is the most active player Sportswear companies’ fitness app acquisitions Registerd users at the time of acquistion in million Acquistion price in million Acquisition price per user
20 MapMyFitness $7.50 Nov 2013 $150 1 80 MyFitnessPal $5.94 Feb 2015 $475
20 Endomondo $4.25 Feb 2015 $85
70 Runtastic $3.43 Aug 2015 $240
45 Runkeeper $1.89 Feb 2015 $85
Sources: DC Reinmaker, Fortune, Runnersworld, Statista Digital Market Outlook 1: Under Armour also acquired Gritness in July 2015 for an unknown amount. 123 eServices Fitbit leads the global wearables market; what can be expected from the Apple Watch? Worldwide wearable device shipments by the Top 5 vendors in million
2015 2016 Global wearable device shipments 22.0 22.5 28.8 81.9 102.4
15.7 2014 2015 2016
12.0 11.6 10.7
5.8 6.1 4.4 3.2
Source: IDC 124 eServices Tinder and Badoo are the top 2 dating apps in terms of global1 downloads The most downloaded dating app by country 2015
. Tinder . Badoo . Lovoo . Frim . Momo . Heartbeep . YYC . Paktor . WhosHere
Sources: BBC News, App Aniie, Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook eServices Selling food online is a promising business – especially in the U.S. Online food delivery1 revenue forecast (in US$ billion) 2016 2021
+24.6% p.a. +20.2% p.a. +20.8% p.a. +23.2% p.a. +24.8% p.a.
39.9
13.3 9.6 7.3 6.0 3.8 2.8 2.5 2.1 0.8
USA UK Germany France Spain
Source: Statista Digital Market Outlook 1: includes meals ordered online and delivered by restaurants, delivery services and online orders collected by the customer; does not include phone orders and grocery deliveries 126 eServices Despite not owning a single car, Uber’s market valuation is closing in on the big OEMs Market cap/valuation of selected companies in 2017 (in US$ billion) Automobile manufactures Ride sharing providers
Toyota Motor Corp. 147.3
Daimler AG 75.3
Volkswagen AG 74.3
Uber Technologies Inc. 68.0
General Motors Co. 51.0
Tesla Motors Inc. 49.8
Didi Chuxing 33.8
Lyft Inc. 6.9
ANI Technologies Pte Ltd. (Ola) 3.0
GrabTaxi Holdings Pte Ltd. 3.0
Source: Yahoo! Finance, CB Insights, livemint Note: Market cap as of 04-20-2017 127 eServices Everyone is taking a stab at online food delivery
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128 eTravel 06-18-2016
The day online ride sharing company Uber reached a record breaking 2 billion users eTravel The global eTravel market will almost double to around US$1 trillion by 2021 Global1 e-commerce Revenue in US$ billion and CAGR2 16-21 by segment 2016 2021 +12.09% p.a. +10.01% p.a.
667.66
377.27
288.11
178.78
Online Travel Booking Mobility Services
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 131 eTravel China displays the fastest growth in terms of eTravel revenues Total eTravel revenue by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
188.76 Untied States +7.4% p.a. 269.74
75.04 China +17.9% p.a. 170.89
38.81 United Kingdom +6.7% p.a. 53.56
32.53 Germany +6.4% p.a. 44.35
25.61 France +9.8% p.a. 40.93
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 132 eTravel Companies in the eTravel market can be grouped into startups and established players Key players by segment and market complexity
Online Travel Booking Mobility Services
Startups1
Established players
Market complexity2
Source: Statista Digital Market Outlook 1: Companies founded in or after 2007 2: Estimate; considers value chain complexity and competitor landscape 133 eTravel Four big players account for the major M&A activity within the Online Travel Booking industry Selected players and selected acquisitions/ investments
Ctrip eDreams ODIGEO Expedia Priceline
2016 Skyscanner US$1700m 2013 Liligo.com N/A 2015 Homeaway US$3900m 2015 PriceMatch N/A
US$180m 2016 MakeMyTrip 2011 Opodo N/A 2015 Orbitz, eBookers US$1600m 2014 Hotel Ninjas N/A (27% stake)
2015 Tuniu US$500m 2011 eDreams Merger 2015 Travelocity US$280m 2014 Buuteeq N/A
US$400m 2015 eLong 2011 GoVoyages Merger 2014 Wotif US$658m 2014 OpenTable US$2600m (38% stake)
2015 Travelfusion US$160m 2014 Auto Escape US$85m 2012 Kayak US$1800m
US$632m 2015 Qunar 45% stake 2012 Trivago 2010 Rentalcars N/A (62% stake)
2015 Suanya US$16m 2008 CarRentals.com N/A 2010 Swoodoo N/A
2014 ToursForFun US$100m 2008 Venere N/A 2007 Agoda N/A
2014 Tujia US$100m 2001 Hotels.com N/A 2005 Booking.com US$135m
2013 Yongche US$60m
Source: Statista Digital Market Outlook, Dealroom 134 eTravel Airbnb has reshaped the way we book accommodations Number of Airbnb listings in cities worldwide in 20161
Paris 78,000
London 47,000
New York 46,000
Rio de Janeiro 33,000
Los Angeles 26,000
Barcelona 23,000
Rome 23,000
Copenhagen 20,000
Sydney 20,000
Amsterdam 17,000
Source: Airbnb Data & Analytics 1: Listings refer to entire flats, private rooms and shared rooms 135 eTravel Fair deal? In major cities, taxi drivers earn significantly less than Uber drivers Estimated hourly earnings of driver services in major U.S. cities
Uber Drivers (Net Earings Per Hour) vs. Taxi Drivers & Chaufffeurs (Hourly Wages)
23.87 23.69
20.68 18.46 18.43
15.74 16.23 14.26 14.53 13.92 12.96 12.54
San Francisco New York Boston Washington D.C. Los Angeles Chicago
Source: Uber 136 eTravel Rethinking travel: Airbnb is just the beginning
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137 Digital Media 88,400,000
Virtual Reality is trending in Digital Media. In 2016 88.4 million Google Cardboards (Google’s budget VR solution) were shipped, demonstrating how big a trend it really is.
Source: SuperData Research Digital Media Revenues generated by Video Games overshadow other Digital Media Global1 Digital Media revenue (in US$ billion) and CAGR2 16-21 by segment 2016 2021
+8.1% p.a. +7.6% p.a. +5.8% p.a. +6.8% p.a.
67.10
50.52
23.89 21.22 16.16 15.27 13.20 9.14
Video-on-Demand Digital Music Video Games ePublishing
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 140 Digital Media The U.S. has the largest Digital Media revenues, while China shows promising development Total Digital Media revenue by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
32.51 United States +4.2% p.a. 39.98
13.35 China +18.6% p.a. 31.38
12.76 Japan +3.5% p.a. 15.13
5.54 United Kingdom +5.1% p.a. 7.10
3.07 Germany +6.3% p.a. 4.16
2.90 South Korea +8.5% p.a. 4.36
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 141 Digital Media In most Digital Media segments, very few players dominate the market Selection of key players in Digital Media
Digital Music Video-on-Demand Video Games ePublishing
Source: Statista Digital Market Outlook
142 Digital Media Youtube is the world’s largest music streaming service and at no charge to users Largest services for online music consumption and their number of users
Total listeners
Paid subscribers
820m 100m
81m 50m 20m 4m
Source: YouTube, IFPI, Ipsos, Spotify, Apple, Pandora, Apple Music Youtube has 1+ billion users. According to a survey among 10,552 YouTube users from 13 countries, 82 percent use it to listen to music 143 Digital Media Spotify is the leading streaming service with the largest number of paying subscribers Worldwide paid subscribers of music streaming services (in million)
50.0
20.0
6.9 4.5 4.4 1.1
Mar 2017 Dec 2016 ’Jan 2017 Dec 2016 Dec 2016 ’Apr 2016
Source: Company Announcements, MIDIA 144 Digital Media In Q4-’16, Netflix had more paying subscribers in the U.S. than the top cable companies combined Netflix subscribers vs. top cable companies customers in the U.S. (in m) Paying U.S. Netflix subscribers Top Cable Companies
51.3 49.4 47.5 48.7 47.0 47.1 3.1 Other major 44.7 42.3 43.2 0.4 CableOne 41.4 0.8 39.1 4.6 Mediacom 37.2 35.7 36.2 Altice 33.4 Charter 31.1 29.8 29.2 17.2 Comcast 27.2 25.1 23.4 23.9
22.5
Q1 2012 Q4 Q1 2013 Q4 Q1 2014 Q4 Q1 2015 Q4 Q1 2016 Q4 Q4-2016
Source: Company Information, MarketingCharts, Leichtman Research Group 145 Digital Media eBooks and hardcovers are most expensive in Germany Avg. price of the Top 10 bestsellers on Amazon (in US$) eBook NY Times Bestsellers discount rate
10.96 28% 7.86
Spiegel Bestsellers
24.64 17% 20.49
Open Book Bestsellers
3.39 65% 1.19 Hardcover Price (US$) eBook Price (US$)
Source: Statista Digital Market Outlook As of April 5, 2017 146 Digital Media What comes after subscription in digital media?
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147 FinTech
“If banks cannot truly be customer intimate, they are doomed to be just dumb commodities, acting behind the scenes, like utilities.”
JP Nicols, Bank innovation consulting expert FinTech Global1 Digital Payments are expected to more than double by 2021 Global1 FinTech transaction value and Assets under Management (in US$ billion) and CAGR2 16-21 by segment 2016 2021
+15.9% p.a. +36.4% p.a. +46.5% p.a. 4,644
2,222 1,753
565 260 120
Digital Payments Business Finance Personal Finance
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 150 FinTech It's early days for FinTech markets; however, the U.S. and China have promising prospects Total FinTech transaction value by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
824 United States +19.2% p.a. 1,983
765 China +30.2% p.a. 2,861
156 United Kingdom +15.6% p.a. 323
126 Japan +12.3% p.a. 225
104 Germany +9.4% p.a. 163
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 151 FinTech Most prominent FinTech players can be found in the Digital Payment segment Representative FinTech key player by segment
Digital Payment Business Finance Personal Finance
Digital Crowd- Robo- Commerce lending Advisors
Mobile Crowd- Payments funding
P2P Money Crowd- Marketplace Transfers investing Lending
Source: Statista Digital Market Outlook
152 FinTech Profiteers in Marketplace Lending are Borrowers, Marketplaces, Banks and Investors alike Generic process overview and revenue streams
Borrowers
Personal Lending Marketplace Issuing Bank
Loan Borrower Loan Investors Loan Loan Loan Investment application evaluation1 listing funding issuing purchasing repayment payout2
Investors
Financial Benefits for parties involved
Borrower: Lending Market Place: Issuing Bank: Investor: Loan granted Transaction fee from Bank, Interest rate from Return on investment service fee from Investors loan issuance3 from Marketplace
Source: Statista Digital Market Outlook 1: Includes determination of loan interest rates, based on a prior credit scoring 2: Including initially agreed interest rate 153 3: Interest rate is based on credit worthiness of marketplace and therefor lower than for indivudual borrowers FinTech U.S. Mobile Payment transaction volume is expected to increase tenfold from ’16 to ‘21 Estimated U.S Mobile Payment transaction volume (in US$ billion)
274.4
Average annual 62% 214.7 growth rate 2016-2021 154.4
99.4
55.0
24.9 8.6
2015 2016 2017 2018 2019 2020 2021
Source: Statista Digital Market Outlook
154 FinTech Robo-Advisors are most prevalent in the U.S.; only two of the biggest advisors are from Europe Top Robo-Advisors by assets under management (in US$ million)
Vanguard 47,000
Schwab Intelligent Portfolios 10,200
Betterment 7,360
Wealthfront 5,010
Personal Capital 3,600
Futur Advisor (Blackrock) 808
Nutmeg 751
AssetBuilder 671
Wealthsimple 574
Financial Guard 454
Rebalance IRA 403
Scalable Capital 222
Sources: Statista estimates based on company information, Press Releases, Graphiq, Nerdwallet, CNBC, Business Insider Information based on latest available data, as of February 2017. We do not claim that the information provided is complete. 155 FinTech Bitcoin remains the largest crypto-currency with a market cap of more than US$14 billion Market caps of the ten largest crypto-currency markets (in US$ million1)
Bitcoin 14,003.7
Ethereum 900.4
Ripple 260.5
Litecoin 203.4
Monero 148.3
Ethereum Classic 109.3
Dash 93.0
MaidSafeCoin 50.4
Augur 48.0
Steem 38.0
Source: CoinMarketCap 1: as of January 16th, 2017 156 FinTech In 5 years, Bitcoin & Blockchain start-up funding increased from US$1m to over US$570m Bitcoin & Blockchain funding and investment of start-ups (in US$ million) 572
501
343
90
1 2012 2013 2014 2015 2016
Source: CB Insights 157 FinTech If you can‘t beat the FinTechs, join them
No. of major bank investments in VC-backed FinTechs (Q3-'15 – Q3-’16)
Citigroup 8
Banco Santander 8
Goldman Sachs 7
Mitsubishi UFJ Financial Group 5
UBS AG 3
Sumitomo Mitsui Financial Group 3
Competitor, partner or irrelevant? How banking executive view Fintech firms1
Partner 65.3%
Competitor 27.7%
Irrelevant 6.9%
Sources: KPMG, CB Insights, Capgemini 1: Worldwide survey; 2016 158 FinTech How FinTech is reshaping the financial world
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159 Digital Advertising US$935.71
The most expensive keyword for Google AdSense (best mesothelioma lawyer) was closing in on a truly incredible cost of US$1,000 per click in March 2016.
Source: searchenginewatch; Semrush Digital Advertising Digital Ads are expected to grow across all categories, with Search Ads taking the top spot Global1 digital advertising revenue forecast (in US$ billion) 2016 2021 +9.5% p.a. +10.0% p.a. +12.5% p.a. +17.0% p.a. +9.28% p.a. 142.5
90.7
69.8
48.9 43.3 45.4
27.1 25.6 20.7 16.5
Search Banner Social Media Video Classifieds
Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 162
Digital Advertising Digital Advertising revenues in China are expected to more than double by 2021 Total Advertising revenue by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
80.18 United States +7.7% p.a. 116.08
43.90 China +17.6% p.a. 98.69
14.25 United Kingdom +8.6% p.a. 21.51
8.67 Japan +7.8% p.a. 12.60
6.78 Germany +5.0% p.a. 8.65
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 163 Digital Advertising In programmatic advertising 60% of the budget can be allocated to service contractors Allocation of US$1 in programmatic advertising
$0.10 $0.05
$0.15
$0.12 $0,61
$1.00 $0.15
$0.14
$0.29
Advertising Agency Trading Desk DMP/Date DSP Ad Exchange SSP/Ad Publisher Client Provider Network
Source: IHS Markit 2016, interviews with over 100 market players Note: share of DMP/Date Provider and DSP might be slightly higher 164 Digital Advertising There is a significant ‘ad spend gap’ for mobile
Percent of time spent by consumers with media & percent of ad spend allocate to media in the U.S. 2015 39% Time spent 36% Ad spend
25% 23% 22%
16% 13% 12% 10%
4%
Print Radio TV Internet Mobile
Source: KPCB Note: Print includes newspaper and magazine. Internet includes desk top, laptop & other connected devices; Excludes out of home, video games, and cinema advertising. 165 Digital Advertising Mobile Ad spending will continue to boom over the next three years Estimated change in advertising spending between ’16 – ’19 in US$bn p.a.
Mobile Internet 80.5
Television 6.8
Outdoor 2.9
Radio 0.9
Cinema 0.8
Magazines -3.7
Newspapers -7.7
Desktop Internet -11.9
Source: Zenith Optimedia 166 Digital Advertising Social media & content marketing are top priorities for marketers Digital marketing budget plans for 2017 (in % of respondents)1 Increase Keep the same Decrease
Social media marketing 56% 39% 5%
Content marketing 55% 42% 3%
Personalization 51% 44% 5%
Video advertising 50% 43% 7%
Mobile marketing 48% 47% 5%
E-Mail marketing 46% 47% 7%
Webinars 40% 49% 11%
Display advertising 34% 53% 13%
Paid search 32% 55% 13%
Affiliate marketing 29% 63% 8%
Source: Econsultancy, Adobe 1: based on a survey of 3,347 marketing professionals around the world 167 Digital Advertising There is a clear generational divide in news consumption Main news source by age group 18-24 25-34 35-44 45-54 55+ 64%
57% 53%
47% 46%
36% 37%
29% 25% 24%
12% 7% 8% 8% 7% 8% 5% 6% 6% 6%
Online Radio Print TV
Source: Reuters Institute for the Study of Journalism Note: Based on a survey of 52,225 news consumers across 26 countries; numbers may not add up to 100% due to rounding 168 Digital Advertising 2019 will be a paradigm change: mobile/desktop internet ad spend is expected to overtake TV Share of global ad spend by medium (in percentage)
6.7% Televesion 6.4% 0.6% Desktop Internet 0.7% 6.4% 5.8% Mobile Internet Newspapers 4.4% 32.6% 5.8% 35.5% Magazines Radio 8.3% 10.9% Outdoor Cinema
Television: 15.2% - 2.9% points 27.0% 14.7% 18.9% Desktop Internet: - 4.2% points
2016 Mobile Internet: 2019 +11.8% points
Source: Zenith Advertising Expenditure Forecast 169 Digital Advertising The future of advertising is 'fewer, better ads'
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170 Smart Home 57%
of all Smart Homes in 2016 were located in the United States
Source: Statista Digital Market Outlook Smart Home The global Smart Home market will more than quadruple by 2021 Global1 Smart Home Revenue (in US$bn) and CAGR2 16-21 by segment 2016 2021
+33.1% p.a. +39.6% p.a. +35.6% p.a. +58.4% p.a. +32.6% p.a.
25.31
22.12
16.82
14.25 12.03
5.59 4.17 3.11 2.91 0.56
Home Automation Security Home Entertainment Ambient Assisted Energy Management Living (AAL) Source: Statista Digital Market Outlook 1: only includes countries of the Digital Market Outlook 2: CAGR: Compound Annual Growth Rate 173 Smart Home Smart Home market development is most dynamic in China and Germany Total Smart Home revenue by region (in US$ billion) 2016 2021 CAGR1 ’16-’21
10.43 United States +25.3% p.a. 32.19
1.18 China +62.5% p.a. 13.43
0.93 United Kingdom +32.3% p.a. 3.76
0.89 Germany +39.1% p.a. 4.60
0.64 South Korea +34.5% p.a. 2.84
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 174 Smart Home The Smart Home ecosystem consists of many intersections and entry points Illustration of the Smart Home ecosystem and value chain Supply side Retail Demand side/ Customer ecosystem
Platform Internet Software to Enables remote access Control devices control e.g. Smartphone, tablet devices or connected buttons Manufacturer Websites Offers devices Owned or third party
Gateway Provides connectivity Stores Owned or third party
Smart Home devices Sensors/ actuators to Service provider automate the home Offers control software/ Technicians platform, connectivity, Sells, installs and additional services maintains system Devices and/ or services
data and/ or revenue : Data
Source: Statista Digital Market Outlook
175 Smart Home The Smart Home company landscape comprises all kinds of origins Key players by segment1 and integration potential
Generalists and Home Ambient Assisted Energy Home Security Entertainment Living (AAL) Management Automation
Dedicated Smart Home companies
Players entering the market from foreign industries
Integration potential2
Source: Statista Digital Market Outlook 1: Using the most relevant segment as most companies are active in multiple product segments 2: Estimate; considers the potential for integration with devices from other segments 176 Smart Home Digital Assistants will become increasingly more common in people’s homes Estimated global number of virtual digital assistant users (in mio) 1,831
Hi, how can I help? 1,642
1,376
1,016
710
504 390
2015 2016 1 2017 1 2018 1 2019 1 2020 1 2021 1
Source: Statista Digital Market Outlook; Tractica, 2015 to 3rd quarter 2016 1: Forecast, figures do not include business usage 177 Smart Home Echo & Co. will enter the Home Automation market and increase revenues fivefold by 2021 Smart Home automation market revenue (in US$ billion) Total home automation market Thereof VPA-enabled wireless speakers
Smart bulbs 20.78 Traditional gateways/hubs
Window/door sensor
General control buttons/dimmers
Garage door controls
Shading devices 4.10 Other home automation solutions
2.10 0.36 VPA-enabled wireless speakers 2015 2020
Source: Statista Digital Market Outlook, Gartner 178 Smart Home Americans are keen on Smart Home Security; could it be due to the high burglary rate? Domestic burglaries per 100,000 inhabitants
290 282 196 Smart Home security revenue per 100,000 inhabitants
$881,000
$275,000 $209,000
United States United Kingdom Germany
Source: Statista Digital Market Outlook, UNODC 179 Smart Home Smart Home = Connected devices + integration
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180 Connected Car 190,850,000 Connected Cars
The predicted global number of Connected Cars on the road in 2021
Source: Statista Digital Market Outlook Connected Car Widespread connectivity is a prerequisite for the development of self-driving cars Gradual automotive development towards autonomous vehicles
Digital Autonomization Maturity Incorporation of intelli- gent hard- and software
“Every digital application that can be used Autonomous driving for surveillance and control will be used › for surveillance and control.1” Connectivity › Vehicle-to- Everything Interconnection of communication digital components › Automatic self- Digitization › Embedded in-car diagnosis systems connectivity Introduction of embed- › etc. ded digital components › Connected working Electrification parts › Radio data system Technological im- › Monitoring Real- Mechanization technology provement of car parts time operating car- data Mechnical devices › Parking cameras replace manual actions › Electric windows › Working parts › etc. sensors › Power door locks › Indicators › etc. › etc. › etc.
2017 Time
Source: Statista Digital Market Outlook ABC Mass market focus Selected focus technologies per stage 1: Following Zuboff‘s Laws about the implications of information technology Digital maturity level Technological status quo in the mass market Note: Width and height of bars does not correspond to the actual timeline or 183 digital maturity Connected Car Connected Car service subscription revenues are still falling short of OEM’s expectations Global1 Connected Car revenue in US$ billion and CAGR2 by segment 2016 2021 +37.1% p.a.
71.82
+58.5.4% p.a. +49.4% p.a.
14.83
7.91
0.19 1.92 1.06
Connected Hardware Vehicel Services Infotainment Services
Source: Statista Digital Market Outlook 1: Only includes countries listed in the Digital Market Outlook 2: CAGR: Compound Annual Growth Rata/ average growth rate per year 184 Connected Car A pioneer in integrated connectivity, the U.S. will stay the biggest Connected Car market by 2021 Total Connected Car revenue in US$ billion by region 2016 2021 CAGR1 ’16-’21
5.82 United States +25.5% p.a. 18.14
1.91 Germany +34.1% p.a. 8.27
1.84 China +55.8% p.a. 16.92
1.33 United Kingdom +31.5% p.a. 5.24
1.03 Japan +42.0% p.a. 5.92
Source: Statista Digital Market Outlook 1: CAGR: Compound Annual Growth Rate 185 Connected Car Connectivity-related service packages are now available from most OEMs Key players and their digital service programs1
Europe North America Asia
Manufacturer
Audi Connect Škoda Connect UVO OnStar OnStar BlueLink Connect Nissan Connect ConnectedDrive MyCitroën UConnect Honda OnStar Connect UConnect Entune Peugeot Connect Porsche Connect STARLINK OnStar Car-Net OnStar MZD Connect UConnect
Sensus UConnect Mitsubishi Connect InControl Connect InTouch / Connection
R-Link MercedesMe SYNC3 EVE Enform Connect World
Source: Statista Digital Market Outlook 186 Connected Car Real-time traffic information is already widespread across the Western world and Asia Availability of real-time traffic information by the four largest providers1
Covered by …
1 provider 2 providers 3 providers 4 providers
Source: Company Information, Statista Digital Market Outlook 1: the four providers are Google (available in 61 countries), Here (52), TomTom (52) and Apple (46) 187 Connected Car Operating data collected from connected cars generates both potential and challenges Data generate per hour by Connected Cars compared to online activities
HD video streaming 869 MB
29 MB
Music streaming
15 MB 25,000 MB Web browsing
5 MB Turn-by-turn navigation
Vehicle data generated
Sources: AT&T, McKinsey, Verizon 188 Connected Car Tesla’s investment intensity in R&D is much bigger than that of VW and BMW R&D intensity of Tesla and selected car manufacturers in 20161
Tesla 11.9
VW 7.3
BMW 5.5
General Motors 4.9
Daimler 4.9
Ford 4.8
Toyota 3.7
Sources: Company Information, Statista 1: R&D intensity is defined as the ratio between a company’s investment in research and development and its revenue Connected Car Monetizing vehicle data – the future for OEMs?
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190
Imprint Contacts and authors
Felix Wegener Tobias Bohnhoff Sebastian Buss Philipp Huhn Kathrin Schreiber
E-MAIL WEB [email protected] statista.com/outlook
Released: April 2017
Imprint Statista ▪ Johannes-Brahms-Platz 1 ▪ 20355 Hamburg ▪ +49 40 413 49 89 0 ▪ www.statista.com
Disclaimer This study is based on survey and research data of the previously mentioned sources. The forecasts and market analysis presented were researched and prepared by Statista with great care.
For the presented survey data, estimations and forecasts Statista cannot assume any warranty of any kind. Surveys and forecasts contain information not naturally representing a reliable basis for decisions in individual cases and may be in need of further interpretation. Therefore, Statista is not liable for any damage arising from the use of statistics and data provided in this report. About the Digital Market Outlook 9 Markets, 34 segments & 85 sub-segments Details
e-Commerce FinTech › 50 countries Fashion, Electronics & Media, Food Digital Payments, Business Finance, & Personal Care, Furniture & › Direct access & downloads Personal Finance Appliances, Toys, Hobby & DIY › 7-Year coverage: 2015 – 2021 eServices Connected Car › Revenue forecasts Event Tickets, Fitness, Dating Connected Hardware, Vehicle Services, Food Delivery Services, Infotainment Services Smart Home eTravel Home Automation, Security, Home Online Travel Booking, Mobility Entertainment, Ambient Assisted Services › User count & penetration Living, Energy Management
Digital Media Digital Advertising Video-on-Demand, Digital Music, Banner Ads, Video Ads, Search Ads, Video Games, ePublishing Social Media Ads, Classifieds
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