State of Social and Internet 2017

A while back, my friend Jeremiah Owyang wrote his perception of the state of social to which I contributed. Decided I’ll add onto my blog as well.

Twitter: dumpster fire but central to US current events, news
Facebook: where The Olds who ‘don’t get’ other social networks congregate to get attention, Asia’s LinkedIn, and others have an account for the sole purpose of Messenger (messenger.com via web)
Messenger: communication utility (Skype / Hangouts replacement; the Westerner’s WeChat and Weibo — encrypted messaging and P2P payments? Yes please!)
LinkedIn: depot of shameless self promoters and what NOT to do cues for teens and millennials professionally networking. I.E., Stay away from descriptors such as, but not limited, to: ‘futurist’, ‘keynote speaker’, ‘innovator’, ‘change agent’, etc., etc.,
Snapchat: dancing Hot Dog and awesome filters to cross post onto IG
IG: branding tool for the non-olds (teens). Lifestyle diary for Millennials (food, beauty, fashion, etc.)
Google+: Huh? What’s that???
Telegram: status symbol to show you’re ‘in the know’ about cryptocurrencies.
Slack: quickly becoming the new email
WhatsApp: where European Android users are
LINE: only relevant to Thais and old Japanese people
Ding Talk: where Chinese who don’t trust Weibo or WeChat conduct business

Social networks aside, my phone is the place I do the most internetting and boy has my homescreen changed a lot. Take a look:

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The three apps on the bottom are apps most used: Twitter, brower, mail.
1. Apple’s mail app has been replaced by Outlook (yes, Microsoft Outlook) because Gmail loads the quickest plus the experience is much better. I can’t believe I’m saying this either but hey — it is what it is.
2. Safari has been replaced by Brave — which I wrote extensively about here.

Despite having 256gigs on my phone, I only have one page of apps. Mainly because I realized long ago I only use a handful on the daily. I also turn off the little red circles because they induce anxiety and helped me wean off my addiction. (Read about that journey here.)

Funny how things change!

Related: Snap Chat should be worried — check out this neat graph I found. 300M daily active users for Instagram stories! Amazing.

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Charts: Global Internet usage

I had to blog this vs tweeting  — it’s just too good not to share.
Take a look:

share-of-population-that-has-never-used-the-internet-2013_chartbuilder

  • 20% of Europeans have never used the Internet.
  • 34% of Italians have never used the Internet — via qz

Granted, there are still 13% of American adults in 2014 don’t use the Internet [1] but these numbers still astound me.

Then there is Asia — and I loathe using ‘Asia’ so loosely because Asia is BIG — but they are the global leader in online growth: 42% APAC vs 27% Europe — Comscore Asia forecast (PDF)

This is also a good opportunity to revisit the scope of technological adoption and revenues coming out of Asia.
Parallel with online growth; the increase of mobile traffic, combined with mobile revenues makes this region, the most interesting when it comes to disruptive technologies + monetization.

ChartOfTheDay_1088_Percentage_of_global_page_views_from_mobile_devices_n

 

Asia includes the following four countries: China, India, Japan and South Korea. Those four countries account for 66% of Asia’s population, 60% of Asia’s mobile connections and over 70% of regional mobile income. Four markets, four countries with four very different ecosystems.

China = population of 1.4 billion people, GDP of 8.2 trillion USD
India = population of 1.2 billion people, GDP of 1.84 trillion USD
South Korea = population of 50M people, GDP of 1.13 trillion USD
Japan = population of 127.6M people, GDP of 5.96 trillion USD

Then, there are the smaller countries with high GDPs and/or high population like: Hong Kong, Singapore, Taiwan, Thailand, Indonesia, Malaysia, Philippines, etc., etc.

To put that into perspective, the US has a population of 314M people (double Japan) with a GDP of 15.68 trillion USD. Compared to the big four Asian countries (Japan, South Korea, India and China), the US has been ahead of the race as far as development, access and economic distribution. This development gap the US has, is significantly wider with India and China than the gap the US has with Japan and South Korea, but the US is still ahead of these four countries.

WSJ just reported China is projected to overtake the US in mobile revenue [2] but as I said here, Japan should be the market to pay attention to, as

  1. smartphone penetration is still low
  2. spend is high — and keeps growing

Looking at global run rates and stats, it’s all about Asia and realistically, which markets and ecosystems one can penetrate.

 

 

 

Popular Communication & Messaging Apps by Country

I spent the past week reading forecasts and reports from Goldman Sachs, McKinsey, Morgan Stanley, Deutsche, etc., etc.

It sounds a bit boring but really not. It was actually fun to read, consume, compare and contrast the different reports.

Quick takeaways:

Deutsche Engagement

Deutsche’s chart of messaging apps used in Brazil, Russia, China, South Korea, Japan and the US.

culture and distro

 

Cross referenced with AppAnnie’s spend by country chart tells us:

  • S. Korea consumes and spends on content. Kakao Talk’s success is likely due to that ecosystem.
  • Japan leads in gaming, explaining the success of gaming companies as Capcom, DeNA, Gree, et al., and the reason the Japanese spend the most in both Google Play and iOS stores. Also explains success of LINE
  • US has wide range of content spend but the US is a distinct market from the rest of the world with different economical factors.

This chart also from App Annie interests me more, as it shows spend vs device:

Device per spend

I agree with Goldman Sachs, stating BRICs (Brazil, Russia, India and China) are 3-5 years away from global scaling and spending.

South Korea, with the highest spend and technological advancements, is like China where the ecosystems are so tightly intertwined it’s a tough market to penetrate. Fun to watch, but just like China, certain models and strategies cannot be emulated because of the reliance on proprietary strong holds.

For people looking to enter markets, Japan, UK and US are the likely bets. Or at least if I were a VC, that’s where I’d be placing bets.

Still digesting but as my thoughts parse, I will be sharing.

KakaoTalk’s Challenges

While the US is still trying to figure out how to jump on the messaging app money train, the downfall of messaging apps has begun in Asia.

KakaoTalk is Korea’s most dominant messaging app and an interesting analysis was just released [source].
A few takeaways:

  • KakaoTalk has 130 million subscribers. 35 million of them are from Korea.
  • Korea has approximately 37 million smartphone users
  • Kakao Japan was set up in July 2011. They have a joint venture with Yahoo Japan
  • Kakao is also in Vietnam and Indonesia
  • 9 of their games have at least 100 million cumulative downloads
  • since July of 2013, they have not hit 100 million
  • new subscriber acquisition rate is slowing down
  • they are also losing ground in overseas markets

KakaoTalk’s monetization strategy is lacking and heavy reliance on mobile gaming is a bad idea. Just look at Gree, the Japanese mobile gaming company. Their net profit Q1 fell 74% from the previous year and it keeps declining [source]. Even if KakaoTalk boasts game revenues of $300 million in the first half of the year [source], KakaoTalk’s user acquisition rate is declining. Their games are no longer as popular. They will see a shortage in projected revenue unless they come up with a new plan.

Their localization strategy is a failure. A joint venture with Yahoo! Japan should have catapulted them to mass penetration quickly, for in Japan, Yahoo!  is still the most visited website source. But they are still very much behind LINE, that entered the Japanese market 15 months after KakaoTalk. I also wonder how KakaoTalk is approaching growth in Vietnam and Indonesia.

KakaoTalk will stay dominant in S. Korea, since they have the most users in their home base, but LINE is also owned by Naver. Naver is a S. Korean company and they also have home base advantage. Unless KakaoTalk figures out a way to scale the servers (they are experiencing server errors and outages. Five that I could find, to date. 1,2 ), users can quickly move to another service as fast as they onboarded. Especially, since messaging apps are the way we communicate in Asia. An outage on KakaoTalk or LINE  in the US, is like Gmail or iMessage going down.

The messaging app space is peaking and it’s so competitive right now. It’ll be interesting to keep a close watch on KakaoTalk to see how they will evolve their product and strategies to stay a major player.

Messaging Apps are Not Social Networks

There is a lot of emphasis on Facebook’s youth demographic decreasing and how messaging apps like Snapchat, LINE, WhatsApp and KakaoTalk are becoming the new Facebook and I can’t help but to think: wow, people don’t understand product and technical differences.

Facebook is a social networking platform. Messaging apps are tools for communication.

It’s not that people are leaving Facebook or Instagram for messaging apps, it’s that people are using messaging apps as tools to communicate differently.

There is room for both in the world. It’s just that people are choosing how to talk to those they want to talk to (messaging apps), rather than putting themselves out there for everyone and – literally – their mothers to see (Facebook).

So just like how most people don’t want to socialize with tens and hundreds of people every second of every day, many are choosing to socialize with people in different ways. And they are doing so with photos, videos, text and content.

Facebook and messaging apps are two different things.

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