The Astonishing (Emerging) Global Web (by Yiibu)

global web the emerging

https://www.flickr.com/photos/curious_e/10642468063

http://www.flickr.com/photos/psd/3149878971

the web was first conceived

25 years ago...

...by an Englishman

Source: CERN

...the initial concept was revised with the help of a Belgian computer scientist...

Source: Wikipedia Robert Cailliau

built in France (!)...and the first web site finally

Courtesy: Google MapsSource: Exact location where the web was invented

and hosted on a computer

designed in California...

Source: Wikipedia

(note the critically important do NOT power down sticker)

...but within the walls of a Swiss

research institute

https://www.flickr.com/photos/calistan/4034215937

fifteen years on...

as the first crop

of dot.coms went bust...

30%North America

29%Europe

19%Japan/Korea

2%Australia

13%rest of Asia

5%LATM

1%Middle East

1%Africa

most of the internets users came from developed economies

Source: Internet world stats - Internet users by region, 2000, per the IMF definition of developed in 2000)

1. U.S.A.

2. U.S.A.

3. U.S.A.

4. S. Korea

5. S. Korea

6. S. Korea

7. U.S.A.

8. Japan

9. U.S.A.

10. U.S.A.

...as did all the trac on the Alexa top 10.

Source: Alexa.com, Sept 2000, via Wayback Machine

today, the situation is quite dierent....

Internet penetration nears saturation in developed economies...

Internet Population and Penetration

5. Baidu (China)

7. QQ (China)

11. Taobao (China)

13. google.co.in

14. Sina (China)

10. hao123 (China)

17. Weibo (China)

20. Yandex (Russia)

...and trac from fast growing emerging economies such as China, India, and Russia now makes up almost half of the Alexa top 20.

Source: Alexa.com, April 2014

Source: Age of Man - interactive map, National Geographic

close to 3 billion of us

have yet to use the internet...

Xiaomi Hongmi

yet thanks to devices such as this,

wont have to wait much longer

to discover it...

(...within a year, similar devices will cost half this much)

Android platform

83 ($130)built & designed in China

but the internet the next billion will discover isnt quite like ours...and thats what were going to discuss today

begin this story by talking

https://www.flickr.com/photos/goingslo/9328307647

which is why well

about sheep...

...on Instagram

if you have an Instagram account, you can slap a tagon anything, take a picture of it, and sell it... Fatima Al Qadiri, Mousse magazine

https://www.flickr.com/photos/bombardier/5456285991

you knowhacked products.

She sells dried fruit. A friends cousin is sellingweird potted plants...people are creating,

Fatima Al Qadiri, Mousse magazine

...even my grandmother has an Instagram business.

https://www.flickr.com/photos/qilin/3923289556

Instagram businesses are

particularly popular in Kuwait

https://www.flickr.com/photos/jackversloot/5023997659/

(for some unknown reason...)

more than 10,000 similar businesses

are powered by Facebook...

but over in Thailand,

businesses such as these provide a glimpse

informal economy...of a new, digital and mobile-fuelled

the last few 1000 years of informal economy has looked something like this

http://www.flickr.com/photos/dgmckelvey/7053122601

theyre still relatively ad-hoc...

no shopping cart or online form, just contact her using your mobile and a popular

social messaging app

are a bit dierent...on the one hand

these new kinds of informal business

and poses a new level ofsophistication...

orders shipped daily by courier with

tracking number

yet they are modern, global,

follow on Instagram

contact on mobile and WhatsApp

the goat man has fans!

gotta love the q8animals hashtag!

http://www.flickr.com/photos/57634952@N00/3031070035/

These services dont oer a great experience but are good enough and oer a good balance of reach, eort, functionality and adaptability to local circumstances. They also fill an important gap...

83% of Thai internet users use Facebook

Facebook even works on his

crappy old phone

she can manage the site and respond to inquiries on mobile

while sitting here all day

the motorcycle taxi around the corner can make quick

deliveries if needed

...most of these pages see their largest growth

out in the countryside, where the populationis largely underserved by other e-tailers

as well as brick-and-mortar shops Thailands powerful wave of Facebook commerce

http://www.flickr.com/photos/wakxy/5233200705/

but reaching the underserved doesnt merely apply to large rural populations...

China has 14 cities with populations

over five million...

https://www.flickr.com/photos/decar66/6341327886

...a whopping 41 cities with

more than 2 million inhabitants

http://www.flickr.com/photos/tahini/10468208216

...and a middle class growing at a rate of

80,000 people a day

http://www.flickr.com/photos/tahini/10468208216 Source: China Connect

rural residents can be hard

http://www.flickr.com/photos/lukewebber/4588854679

reaching Chinas 600 million

its close to 700 million urban residentsbut opening enough stores to service

can be outrageously expensive

http://www.flickr.com/photos/tuchodi/5620884999

(or downright implausible)

http://www.flickr.com/photos/milo_riano/4336541309

so to many Chinese, shopping online

isnt so much an electronic version of commerce,

it *is* commerce, pure and simple

https://www.flickr.com/photos/curious_e/10473440064

...and using their mobile to do so isnt just

a modern alternative to using a PC, its their primary

(or sometimes only) means of using the internet

Chinese e-commerce is also dierent in one very important way...

76%of online retail

involves individual merchants

of online retail is sold through online marketplaces

90%

Source: The Economist

Chinas giant, virtual marketplaces enable

buyers and sellers to find themselves

a modern virtual version of this

http://www.flickr.com/photos/mckaysavage/135932500/

like public markets and town centres,

The largest marketplace is Alibabas Tmall. With more than 180 million customers, Tmall contains products from more than 150,000 merchants and 200,000 well known brands.

Tmall charges an entry fee, and a commission for each sale, but in return provides a high visibility, high trac, customizable, social-media and mobile optimized e-commerce platform.

For major brands such as Apple, hosting a virtual storefronts on TMall is a good alternative to opening hundreds (or possibly thousands) of brick and mortar stores across the country.

apple.tmall.com

Alibaba also oers a C2C site called Taobao, which enables consumers (and smaller merchants) to sell products online. Taobao is a bit like EBay, but vendors arent limited to selling things...

They can also sell services: This Taobao-based travel agent doesnt just sell you a trip, they can also arrange a travel visa, sell you a Thai 3G SIM card, a wi-fi dongle, a subway pass, or local transportation.

C2C and B2C commerce on Taobao

T-Mall merchants pay a commission and an

entry fee

well discuss this bit later...!TaoBao merchants dont pay to sell

stu, they buy advertising and other services to help them stand out

andA mix of ,

with a dash of .

This family of sites enables consumers to shop for a huge range of products that might otherwise never be available in their region. (And yes...Tmall can sell you a new Peugeot...or a Lamborghini).

...such is Taobaos success these days that

running a Taobao shop is a national pastime,sort of like a second job or hobby for tens of thousands

of Chinese oce workers, housewives, and students.- Owning a Taobao shop is a new national hobby

http://www.flickr.com/photos/mckaysavage/135932500/

For many people however, its far more than a hobby. These sites have enabled millions of new jobsespecially in smaller towns or rural areas where residents can now sell their locally made products or produce to an audience of billions.

http://www.flickr.com/photos/tuchodi/5642172895

https://www.flickr.com/photos/tuchodi/5628755801

1 millionby the end of

2012 more than

T-Mall and Taobaostores were registered

in rural areas

Source: CNN

https://www.flickr.com/photos/ahenobarbus/7979295403

one halfT-Mall & Taobao also

accounted for more than

of all parcel deliveriesin China

Source: CNN

the Chinese marketplace model has already slipped beyond its borders...

...most of the people have phones but

there are only 3 malls per 20 million inhabitants...Its a unique time...the right time to leapfrog over oine.- jumia.com co-founder

THE BIGGEST ONLINE SHOPPING MALL IN AFRICAEgypt | Kenya | Uganda| Ivory Coast| Nigeria | Morocco

Access to marketplaces is creating opportunities for Westernmicro-businesses, that can now source materials directly from factories around the world.

Julie sources cake decorating supplies direct from China using

Alibaba and sells them to customers around the world using Etsy

Hi! My name is Julie, I live in the Bay Area and I am the owner of Cakes And Kids. I am wife, mother and entrepreneur and I am forever grateful that I get to do what I love every day!

Small and mid-size companies in emerging economies are also taking advantage of western platforms to reach western customers with unique and often personalized products.

family business

5 people

1 designer, 2 tailors

clothes advertised on Etsy and made

to order

delivery in 1-2 wks

Kelans Art Couture, Foshan, China

Chinese entrepreneurs in Western markets, or online shopping agents in China are also acting as middlemen, shipping hard to find (or highly taxed) Western goods to Asia, then re-selling them on sites such as Taobao.

... even if [Western] retailers or consumer product

companies havent stepped foot in mainland China,their products are already here. Unocially.- Think your brand is not for sale in China yet?

https://www.flickr.com/photos/johnas/7652202244

This is creating a new and fast-growing group of highly globalized digital-first consumers. Consumers who live in one region, but actively shop or seek out products from another.

https://www.flickr.com/photos/ding_zhou/11902149336

https://www.flickr.com/photos/decar66/5150814952

but with millions of vendors in

consumers find products they truly want?

these giant marketplaces, how can

Meet Jing

Jing is an auent young Chinese girl who started blogging about her life and style while studying abroad in the UK.

She is now your competition.

http://jingxujing.blog.163.com/

Source: | Open Youthology

Shes a marketer.

Her Weibo micro-blog now has over 28,000 followers. She blogs about her life, her style and tips for beauty and fashion.Source: | Open Youthology

Shes a retailer.

Her Taobao shop oers copies of luxury products she wears on her blog. All her products are limited edition and priced low.

It usually takes her a couple of hours tosell out.Source: | Open Youthology

Jing promotes products

but uses Taobao to transact

on her blog and social media,

The millions of people without Jings time or commitment can instead sign up for an account at an online shopping neighbourhood.

Online shopping neighbourhoods are

online destinations created by social media,

where consumers can explore a curated

selection of choices. | Open Youthology

one of the largest sites is Meilishuo

with over 32 million users,

(which means beauty talk)

Sourrce: Technode and Pando Daily

5-6 millionMeilishuo generates

clicks for online merchants per day

300 million

...and in 2012 generated an estimated

($500M) in revenue for downstream

merchants

Similar to an online travel agent, Meilishuo gets a cut for each outbound transaction it generates....

http://www.flickr.com/photos/ducdigital/2892313560

If you think this sounds kind of boring, because its all about girls discussing shoes,

imagine translating this model to geeks talking about gadgets, or fans talking about books...

Part of the reason these services work, is that they feed into the virtuous circle of mobile and social media adoption.

Source: The internet economy in the G20 (PDF)

Developing markets are going straight to socialUsers adopt social networking quickly as they come online

China *loves*

social media

...but the most popular social media services in China arent just sitestheyre platforms...

Combining (social) platforms with a virtual currency has also enabled entirely new forms of commerce...

one of the most popular(lately) is WeChat

three years old

500 million users

or Wixn - - in China

mobile-only

Literally every single person I know,

everyone Ive met in China, is on WeChat.

I dont use email, I dont use the phone, I dont use

SMS to communicate with anyone only WeChat.Hugo Barra, VP Xiaomi Global (ex VP Android Product at Google)

Photo: http://www.oezratty.net/, watch the video interview from LeWeb 2013 on YouTube

(recorded) voice chat

RSS-style subscription content

mobile contact exchange

highly customizable API

payment platform

text chat

group text or video chat

photo blogging

mobile-only, and far more than just a messaging app

virtual wallet

WeChats API is extensive, enabling brands to create mini-sites containing news, IVR style support or full-blown transactions through with WeChats virtual wallet and payment platforms.

WeChat subscription channels API integration enables customizations such as sub-sections...

download our app

find nearby stores

...and product or service inquiries using an automated short messaging service

heres the stu you can ask regarding coee...

cappuccino

tell me about coee

(if youre looking for fragments of a one web philosophy, youre sadly not going to find it here)


5 millionthis Chinese New Year,

more than

people used WeChat to purchase 20 million virtual Hongbao (red envelopes

containing money)in one 24 hour period

Thanks to clever campaigns, WeChat wallet usage is rising fast!

Source: TechInAsia

http://www.flickr.com/photos/ducdigital/2892313560

virtual wallets, mobile payment and alternative finance models are quite popular in emerging economies, as they

help address a whole host of local challenges...

1/4 of adults

across sub-Saharan Africa as a whole only

have accounts at formal financial institutions

less than

of Indonesians have a credit card

15%

Source: Wall Street Journal

http://www.flickr.com/photos/kiwanja/3169409467/

In countries such as Kenya, India and the Philippines, entirely virtual banks such as MPESA enable customers to send and receive money, or pay for goods and services on or oine using even the most basic mobile phone.

Indonesia, consumers can also choose to pay for

https://www.flickr.com/photos/kamshots/468265643/

in countries such as China, Nigeria and

online purchases using cash on delivery

with so much commerce

taking place on giant marketplaces,

there is also a natural fear of counterfeits

https://www.flickr.com/photos/ornellas/3308925864/sizes/l

To increase trust, Alibaba created Alipay, an online payment platform (like PayPal) that also doubles as an escrow service and only releases payment once goods have been received and accepted by shoppers.

With more than 800 million registered users, Alipay is now so common that it can be used to pay for almost anythingincluding school fees and loans, utility and mobile phone bills and even hospital charges.

T-Money - Korealaunched in 2004

Octopus - Hong Konglaunched in 1997(!)

Some of these pay for everything platforms are now decades old... starting with one mobile technology, then migrating to progressively more modern (or relevant) ones as they come along.

contactless card

wristbands

keychains

NFC/QR enabled apps

(PC) dongles

SIM integration

contactless card

keychains

NFC/QR enabled apps

(PC) dongles

AliPay integration

SIM integration

20 million cards in circulation(for 7 million people)

71 million cards in circulation(for 50 million people)

...and when youve run out of real things to pay for virtually...why not invent a few virtual things to pay for...


Meet yy.coma giant Google Hangouts style platform with over 300 million users and 11 million channels, and programs ranging from karaoke, to talk radio and educational topics.

Unlike YouTube or SkypeYY has its own virtual currency.

Users purchase credits from the site and use these to show aection for their favourite stars by buying them virtual gifts such as roses and lollipops.

Gifts range in cost from mere pennies to as much as $50 (35).

top Karaoke singers regularly make $20K (15K) a montho of virtual gifts, with one college student reportedly

earning an astonishing $188K (150K) per month

using the site to give Photoshop lessons- The largest social network youve never heard of

...meanwhile in Korea, 1000s tune in to AfreecaTV,a similar service where Choi Ji-hwan earns

about 2 million S. Korean won ($1,880) each month

eating mountains of noodles and kimchi live each nightSource: Iamkorean

In most cases, mobile devices are the glue that tie these platforms, services and communities together...

WeChat has for example,built much of its functionality

around the QR code

WeChat automatically generates a QR code for each account.To follow a person or brand, simply scan the code (on a device, business card, poster, web site etc.)

(WeChat even provide templates enabling personalization of the code to suit your personality or your brand.)

This reliance on QR codes works, because in China (and many other parts of Asia) almost every app (including locally built web browsers!) has a built in QR code reader.

Qunar (travel brand) Baidu web browserTaobao

Some Chinese-made Android smartphones even have QR and WeChat recognition built right into into the camera.

(In Japan, where QR codes were invented, manufacturers added this capability close to 10 years ago.)

the Xiaomi Mi3 camera

using QR codes to interactand transact with brands has therefore

become common (...one might say mundane)

These college students sell fruit on campus...in person, but also through WeChat.

WeChat, AliBaba and other platforms are also working with department stores and other oine goods merchants to extend their reachenabling customers to purchase goods in store by scanning QR codes on products.

...kind of like this John Lewis and Barclay Card concept... except that 300 million people have a WeChat account, and 800 million have an Alipay account.

these brands and consumers arent merely leapfrogging desktop, or finance, or physical retail...

in mobile transactions in 2013

25 billionin mobile

transactions in 2013

150 billion

(Alipay)

they inhabit a giant rapid-prototype of our future...

Source: Business Insider

a future inhabited by people

https://www.flickr.com/photos/paulk/4693602730

for whom the words oine, online

and mobile have become irrelevant

with little baggage to weigh them down,

they can ignore whats normal and

turn constraints into opportunities

https://www.flickr.com/photos/yto/3640718959

...the cool thing about prototypes,is that theyre allowed to be a little crazy...

Russian e-commerce brand Lamoda has turned poor postal infrastructure into an excuse to try something that seems completely un-scaleable...

...Lamoda sends sales assistants directly to shoppers

homes...uniformed delivery men bring the clothes,

wait for [customers] to try them on, oers fashion advice,

take returns and process payments on the spot- Russia: Where the Deliveryman Gives Fashion Advice

https://www.flickr.com/photos/41738141@N06/6814977720/

https://www.flickr.com/photos/marketingfacts/6323249188/

...in Korea, grocery stores are embedded

on Subway platforms where users scan QR codes to

buy items that are delivered just-in-time for dinner

https://www.flickr.com/photos/ivanwalsh/4317318193/l

...in China, online grocery chain Yihaodian

cleverly positioning them in high trac locations such as the Forbidden City

launched 1000 virtual reality branches in one day,

- Watch the campaign video

Why build expensive roads to remote rural locations

when drones can do the job just as well?- Forget Amazon: Drone delivery will take o in Africa

https://www.flickr.com/photos/gabrielgm/9520473233

meanwhile in Africa...

(...combine drones with Lamodas up-selling at your doorstep and things could get interesting...)


and the internet have alreadythe rise of mobile

changed our world beyond recognition

no one can predict what will happen next...

https://www.flickr.com/photos/rapidtravelchai/8280368709

what we do know,

is that in the future the opportunities

will be more global than theyve *ever* been(even Oreos arent sacred)

to meet tomorrows challenges,

and compete in this giant marketplace...


http://www.flickr.com/photos/brownpau/4969358409

we should always remember

that what may seem futuristic to us...

https://www.flickr.com/photos/rodriguez5000/12149403593The Economist: The next frontier

To Westerners, mobile banking is a new way of doing something old. To many Africans, its theobvious way of doing something new

may merely feel newand practical to others...

http://www.flickr.com/photos/tinou/453593446

thank you

many thanks to the amazing photographers on

http://creativecommons.org/licenses/by/2.0

@yiibu

[email protected] usat

Presentation deck available @

http://www.slideshare.net/yiibu

Documents

The Astonishing (Emerging) Global Web (by Yiibu)