Digital Economy 2019

DIGITAL ECONOMY COMPASS
2019
Digital technologies are disrupting the economy and our daily lives with Apart from external data, this year’s Digital Economy Compass includes
relentless stride. As much as the ever-increasing amount of data is more of Statista’s exclusive data than ever. Our own research and
helping us, it also leads to risks and challenges. One way to deal with the market analyses have increasingly become the founding stone of our
incredible amount of data is the use of Artificial Intelligence – a buzz analyses and insights. Our Global Consumer Survey is giving insights into
word that nobody can escape at the moment. But what is really the minds of more than 400,000 consumers in 46 countries. You can find
happening in this field and who is using this technology? Another topic and analyze more than 5,000 brands in the survey. Our Consumer and
that is gaining relevance is the next economic recession. Despite all the Digital Market Outlooks are available for 150 countries, covering all
talk about growth and innovations, there is the rising fear of an relevant markets worldwide. All this information and more can be found
overheating market and the emergence of another bubble that is about on statista.com. The ecommerceDB.com gives insights into more than
to burst. 10,000 online stores. You can find more information about our products
on pp. 225 – 228.
These are the topics that we are tackling in this third edition of the Digital
Economy Compass. We have compiled the most relevant and recent Our research has resulted in more than 200 slides on the global digital
data and found some answers and new questions along the way. economy. We are convinced that you will enjoy reading our new
Digital Economy Compass.
Similar to the prior editions, the Digital Economy Compass 2019 is
divided into two parts. The first one covers today’s most exciting and
important trends. It starts with the data explosion and how the growing
amount of data will change the world. In the chapter about Artificial
Intelligence, we analyze how smart machines influence our daily lives,
how they are used, and what they can do. The chapter about the current
funding and investment market looks at the big players, the newcomers,
and the unicorns in the tech market. Additionally, we have analyzed the
current economic situation, different developments, and the potential
impact on start-ups and the digital economy.
In the second part, we show all the relevant data and insights regarding
the biggest eight digital markets. This includes market sizing and
forecasts for future developments as well as an overview of current
Dr. Friedrich Schwandt (CEO)
trends that are relevant to the respective markets.
2
Table of contents
Global trends
▪ Data explosion: How the growing amount of data will change the world……….…………………………………………………………………………………….……………………….... 3
▪ Artificial Intelligence: How smart machines influence our daily lives……………………………..…………………………………………………………………….…………………………... 44
▪ Funding & investment: The big players, the newcomers, and the unicorns.…………..………………..……………………………………….……………………….......................... 84
Statista Digital Market Outlook
▪ Overview……………………………………………………………………………………………………………………………………………………………………………………………………………………………..... 122
▪ eCommerce ……………………………….………………………………………………….…………………………………………………………………………………………………………………….…………….... 129
▪ eServices …………………………………………………………………………………….……………………………………………………………………………………………….……………………….…………….... 143
▪ eTravel …………………………………………………………………………………….…………………………………………………………………………………………..……………………………….…………….... 158
▪ Digital Media …………………………………………………………………………………….………………………………………………………………………………………………………………….…………….... 170
▪ FinTech …………………………………………………………………………………….…………………………………………………………………………………………….…………………………….…………….... 182
▪ Digital Advertising …………………………………………………………………………………….………………………………………………………………………………………………………….…………….... 193
▪ Smart Home ………………………………………………………………….………………….………………………………………………………………………………………………………………….…………….... 204

▪ Connected Car.…………………………………………………………………………………….…………………………………………………………………………………………………………………….………… 215
3
Data explosion – data is everywhere
Today’s world and its future are built on data. Data storage
Users and companies are more and more interconnected. Additionally, One of the main challenges regarding the use of large data sets is finding
there is a shift from being offline to always online. Both developments ways to store and later analyze them. The total amount of data
have led to the creation of an incredible amount of data that is growing generated in 2018 was 33 zettabytes (330 million times the capacity of
exponentially. the currently largest hard drive) and it will grow exponentially to more
than 2,100 zettabytes in 2035.
While many companies already try to make use of their customers’ data
or data extracted from production processes, the implications of using Since traditional storage solutions are incapable of handling the
Big Data cannot yet be fully assessed. Companies that are able to put incoming stream of data, new solutions such as Cloud storage and
their data to use, will have more business opportunities and improve Blockchain technologies are gaining traction. Cloud storage will overtake
current production and distribution models. device storage in 2019. The shift towards Cloud solutions is especially
visible in the enterprise storage market and will become even more
A data-driven world is based on aggregating and working with all the apparent in the future. In this market, Cloud services will replace
collected input. Thus, it is all about tracking, monitoring, listening, traditional storage as the primary storage solution in 2020 and will make
watching, and observing. The more advanced the data-processing up 92% of revenues in 2026.
systems become, the better their output will be. When used properly,
large data sets can improve decision-making and business processes, The Cloud market is highly dominated by Amazon, which owns one third
help with innovations, and lead to personalization in sectors like of storage capacities. However, while Amazon’s share is stable, the rest of
entertainment, healthcare, or financial services. the market is slowly divided between Google, Microsoft, and IBM, which
all invest heavily in Cloud technologies.
4
Data security certain purchase intentions which companies can serve.
With the growing amount of data, the need for security measures and Data usage
safe data storage increases as well. Besides Cloud storage, Blockchain
establishes itself as a storage solution to safely handle large data sets. As In addition to the aforementioned threats, extensive data collection also
many investors started to realize its potential, the investment sum for has some pleasant consequences for consumers. These include
Blockchain start-ups increased by almost 300% from 2017 to 2018. personalized purchase recommendations or content that is created
especially for certain target groups. Both are highly valued by customers
Although Blockchain and Cloud storage are able to increase the safety of as they improve the shopping experience or the satisfaction with
data sets, there is still a large threat of data breaches and malicious entertainment services. Many consumers are actually willing to share
usage of data. Such data breaches are not uncommon and extremely their data if they receive better-fitting ads in return.
expensive for the companies affected. The more personal and sensitive
the data, the higher the costs for companies to retrieve the data and The overall trend towards personalized content and individualized
repair the damage to their public image. The growing importance of data consumption can also be seen when looking at programmatic advertising
and the public discussion about data security and fraud are making shares. They dominate the advertising landscape in many countries.
many internet users increasingly aware of how their data is collected, Data collection can also be brought to a new level: China’s social credit
stored, and used by companies. systems are an example of this. So far, these systems are only tested in
Value of data 70 pilot projects in different regions, but by 2020, the Chinese
government wants to extend them to cover the complete population.
Many private companies are collecting extensive amounts of data about
their customers. Facebook or Google are able to track and analyze most While economic credit systems are common for many countries, the
of their customers’ behavior. This gives them enormous power in the Chinese social credit systems go a step further. They evaluate not only a
advertising market as they can provide companies with the best-fitting citizen’s economic behavior but also their entire online and offline
target groups through their advertising and targeting services. behavior and aggregate it into a personal score. This score is publicly
available and updated on a regular basis. The individual’s score then
However, it remains unclear to consumers what the companies are using determines their ability to get a promotion, travel by plane, or send their
their data for and what the value of personal information is. It may come children to college.
as a surprise that information regarding demographics or occupation is
not nearly as valuable to companies as one might think. Instead, While this might sound restrictive and invasive to many Western
information on family planning, medical conditions, or the ownership of societies, these systems are very established and valued in China. 80% of
certain assets comes at a much higher price. This is due to the private the Chinese online population approve of social credit systems and only
and sensitive nature of these issues and because they might entail 16% state that they do not take part in social credit systems.
5
The amount of data created is growing exponentially
and calls for more and better data storage solutions
Worldwide amount of data created per year in zettabytes1
2,142
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
612
600
400
175
200 47
0 2 12 33
0
2005 2010 2015 2018 2020 2025 2030 2035
1: One zettabyte equals to 1 billion terabytes

6 Source: IDC, Kleiner Perkins, Statista Digital Market Outlook
To save all the data created in 2018, 660 billion Blu-
ray discs would be needed
The amount of data created in 2018 (33 zettabytes) equals to ...
660 bn x 330 m x 375 m x

the storage of a the capacity of the world‘s the internet‘s size in 1997
standard Blu-ray disc currently1 largest hard drive (88 terabytes)
(50 gigabytes) (100 terabytes)
33 m x 132,000 x 73 x
the storage of a human brain the currently3 fastest the capacity of one
(1 petabyte)2 supercomputer‘s storage gram of DNA
(250 petabytes) (455 exabytes)
x 1,000 x 1,000 x 1,000 x 1,000 x 1,000 x 1,000 x 1,000 x 1,000
Byte Kilobyte Megabyte Gigabyte Terabyte Petabyte Exabyte Zettabyte Yottabyte
1: as at March 2019 2: Varies depending on calculation method 3: as at June 2018

7 Source: ZDNet, Redcentric, Livescience, Oak Ridge National Laboratory, NewScientist, Statista Digital Market Outlook
Data storage
One of the main challenges regarding the use of
large data sets is finding ways to store and later
analyze them. Since traditional storage solutions are
incapable of handling the incoming stream of data,
new solutions such as Cloud storage and Blockchain
technologies are gaining traction.
Cloud storage will overtake device storage in 2019.
The shift towards Cloud solutions is especially visible
in the enterprise storage market and will become
even more apparent in the future. In this market,
Cloud services will replace traditional storage as the
primary storage solution in 2020 and will make up
92% of revenues in 2026.
The Cloud market is highly dominated by Amazon,

which owns one third of storage capacities. However,
while Amazon’s share is stable, the rest of the
market is slowly divided between Google, Microsoft,
and IBM, which all invest heavily in Cloud
technologies.
8
Cloud solutions are the answer to the data storage
problem
Share of data storage solutions

Device Cloud Other
80%
70%
60%
50%
40%
30%
20%
10%
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
9 Source: IDC’s Data Age 2025 study

Amazon dominates the Cloud market with a market
share of 33%
Worldwide market share of Cloud services1 in Q4 2015 and Q1 2018
by
33%
Other
40% 31%
49% Q4 2015 Q1 2018
9%
7%
4%
13%
6%
8% by
1: Includes Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Cloud Services for end-users
10 Source: Synergy Research Group
Microsoft and Google are threatening Amazon by
massively acquiring companies from the Cloud sector
Number of acquisitions of companies with a focus on Cloud technology

2013 2014 2015 2016 2017 2018
24 24
3
5
4
3
1
6
12
6 1
4 5
6
2
6
3
3
1 1
11 Source: CB Insights
Traditional enterprise storage will soon become
obsolete
Worldwide revenues from enterprise storage in billion US$

Traditional storage Cloud services
59
57
56
54
52
51
49
48
46
44 45
42
17% 24% 31% 39% 48% 57% 65% 73% 79% 84% 89% 92%
83% 76% 69%

61%
52%
43%
35%
27%
21%
16% 11% 8%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
12 Source: Wikibon
Cloud services offer a wide variety of benefits for
companies, from reducing costs to improving agility
Selected reasons for companies to use Cloud services
Reduced costs
Scalability
Scalability and flexibility
Speed and agility
No capital expenses
Self-service
Less tech skillsmodel
required
Stability and security
Collaboration
Self-service model
13 Source: Company information, Rick‘s Cloud, Upwork, Salesforce, Globussoft

Amazon also dominates the enterprise Cloud market,
but Microsoft is gaining ground
Adoption rates of Cloud services among enterprises

2018 2017
59%
68%
43%
58%
15%
19%
10%
15%
Not polled in 2017

12%
5%
10%
Not polled in 2017

2%
14 Source: RightScale
Apart from the big players, there are many smaller
companies in the Cloud ecosystem
Selected companies in the storage & analytics landscape in 2018
Infrastructure Cross infrastructure / Analytics

analytics
15 Source: FirstMark
Data security
With the growing amount of data, the need for
security measures and safe data storage increases
as well. Besides Cloud storage, Blockchain
establishes itself as a storage solution to safely
handle large data sets. As many investors started to
realize its potential, the investment sum for
Blockchain start-ups increased by almost 300% from
2017 to 2018. Although Blockchain and Cloud
storage are able to increase the safety of data sets,
there is still a large threat of data breaches and
malicious usage of data.
Such data breaches are not uncommon and
extremely expensive for the companies affected. The
more personal the data, the higher the costs for
companies to retrieve the data and repair the
damage to their public image.
The growing importance of data and the public

discussion about data security and fraud are making
many internet users increasingly aware of how their
data is collected, stored, and used by companies.
16
Storage is not everything – tech giants are also
investing heavily in data security
Selected companies’ patent applications for data security

Microsoft Google Amazon Facebook Apple
126
123 122
12%
18%
7% 25%
97
11% 13%
21%
13%
12%
17%
16% 13% 62
21%
19%
23% 18% 8%
26%
34%
39%
29% 30% 15%
34%
24%
2013 2014 2015 2016 2017
Blockchain technology allows the secure and
transparent allocation of data and property
The concept behind Blockchain
A digital value – in this case money – is The money transaction is represented as The block is shared with all nodes in the
sent from A to B. Information like origin, a single “block“. It contains all attached network. Its details are checked for
date, and recipient are attached. information and a unique hash code. validity. For approval, the block needs …
? ?
? ?
As the previous ownership by A has been Now, the Blockchain provides a ... the consensus of the majority of nodes.
validated, B is now authorized to become transparent history of all conducted If this is the case, the block‘s information
the new owner of the money sent. transactions related to the money sent. is considered valid and added to the
chain.
✔ ✔
✔ X
18 Source: Steemit, Reuters, Statista Digital Market Outlook

From 2017 to 2018, investments in Blockchain
companies grew by 290% to reach US$4bn
Total worldwide venture capital invested in Blockchain companies in billion US$
+290%
3.9
1.0
0.7
0.5 0.5
0.2
2013 2014 2015 2016 2017 2018
19 Source: Diar, Statista Digital Market Outlook

Data breaches are expensive: the more sensitive and
private the information, the higher the costs
Average cost per capita of a data breach in selected industries in US$
408
206
181 174 170 167 166
152 145 140
Health Financial Services Pharmaceuticals Technology Energy Education Industrial Entertainment Consumer
20 Source: IBM Security, Ponemon Institute

With US$8 million, the cost of lost data was highest in
the U.S.
Cost of data breach and average number of breached records in selected countries in 2018
United States US$7.9m 31.4m
Canada US$4.7m 22.3m
Germany US$4.7m 23.6m
France US$4.3m 25.3m
Global average US$3.9m 24.6m
United Kingdom US$3.7m 22.8m
Italy US$3.4m 22.6m
Japan US$3.4m 19.2m
South Africa US$2.9m 21.1m
India US$1.8m 34.1m
Brazil US$1.2m 25.0m
21 Source: IBM Security, Ponemon Institute

With 3 billion stolen data records, Yahoo has
experienced the largest data breach so far
Selected breaches by number of compromised data records in millions since 2013
3,000
1,370
500
427
412
198
150
145
123
117
92
87
80
70
69
65
57
32
22 Source: CB Insights, CSO, Informationisbeautiful.net, Company information

Data breaches are not the only threat: the Cambridge
Analytica scandal shows the problem of data misuse
Users whose data may have been shared with Cambridge Analytica1 in millions as at April 2018
United States 70.6
Phillippines 1.2
Indonesia 1.1
United Kingdom 1.1
Mexico 0.8
Canada 0.6
India 0.6
Brazil 0.4
Vietnam 0.4
Australia 0.3
Germany 0.3
1: Facebook doesn‘t know precisely what data was shared or how many people were impacted. The figures presented here are the social
network‘s best estimates
23 Source: Facebook
Fake profiles are another example of data misuse
Prices of purchasable single social network accounts
Basic Basic Basic
▪ Registered in 2019 ▪ Registered in 2019 ▪ Registered in 2019

▪ Location varies ▪ No followers ▪ No followers
Premium Premium Premium
▪ Registered in 2004 ▪ Registered in 2018 ▪ Registered in 2008

▪ Location: U.S. ▪ 13,000 followers ▪ 17,000 followers
24 Source: AccsMarket
Facebook has lost the public’s trust more than any
other company
Companies people trust least with their personal information as at December 2018
40%
8%
8%
7%
6%
6%
4%
4%
2%
1%
1%
Note: online survey; n=1,000; Dec 09th–15th, 2018

25 Source: Toluna via Recode
Loss of trust does not necessarily mean less usage
Usage behavior of U.S. Facebook users after the Cambridge Analytica scandal
49%
26%
18%
4%
1% 2%
Use it more Haven’t changed Use it less Stopped using it, Deleted my account Don’t have an account
how much I use it still have an account
Note: online survey; n=1,983 adult Facebook users in the U.S.; Apr 26th–30th, 2018
26 Source: Ipsos, Thomson Reuters
Many internet users are concerned about data
misusage, but not all of them take active measures
Share of respondents that are concerned about data Share of respondents that take active measures to
misuse on the internet protect their data
63% Spain 47%

59% Mexico 52%
55% Brazil 55%
48% South Korea 19%
44% Italy 30%
43% Russia 33%
40% Germany 48%
40% United States 44%
40% France 32%
39% China 45%
38% India 46%
38% Japan 11%
37% Canada 40%
36% United Kingdom 41%
33% Australia 33%
“I’m concerned that my data are being misused on the internet”; “I actively do something for the protection of my data”, Multi Pick; n=25,749
respondents
27 Source: Statista Global Consumer Survey, as at February 2019
Many safety measures to protect personal data are
well known but rarely used
Share of respondents who know and use security measures online

Known Used
86.9%
87.6% 89.6%
31.4%
22.6% 24.9%
Password manager Biometric identification E-mail encryption
n = 2,000; respondents in Germany; >16 years; 2018

28 Source: Kantar TNS
Value of data
Many private companies are collecting extensive
amounts of data about their customers. Facebook or
Google are able to track and analyze most of their
customers’ behavior. This gives them enormous
power in the advertising market as they can provide
companies with the best-fitting target groups
through their advertising and targeting services.
However, it remains unclear to customers what the
companies are using their data for and what the
value of personal information is. It may come as a
surprise that information regarding demographics or
occupation is not nearly as valuable to companies as
one might think. Instead, information on family
planning, medical conditions, or the ownership of
certain assets comes at a much higher price. This is
due to the private and sensitive nature of these
issues and because they might entail certain
purchase intentions which companies can serve.
29
Data on health conditions fetches the highest price
Average price per data point for consumers in US$ in 2017

Demographics Family Health Occupation and ownership Activities and consumer behavior
Online search history, purchase

intentions or loyalty cards: 0.02 Demographics: 0.01
Hobbies: 0.03
Engaged / to be married
Own a boat
0.08 0.12 Recently married/divorced or empty nester
Own an aircraft Having children: 0.01
0.03
0.09 Expecting a baby
$
0.12
Own a home 0.11
New parent
0.04
Exercise to lose weight

0.09 0.11
Recently moved or want to move
0.12
Net worth over 1m 0.01
0.26
Occupation Health conditions
Note: Demographics include age, gender, ZIP code, ethnicity, and education
30 Source: Financial Times
Major tech companies collect sensitive user data
Data that major tech companies officially admit to collecting

Company collects data Company does not collect data
Web activities Biometrics Attitudes

Search history and websites visited Facial recognition data (Dis)Likes on social media
Uploads and consumption Voice data Religious and political views
Living situation Health/fitness Financial situation

Education Sports activities incl. location Income level
Relationship status Health information Purchase history
31 Source: Visual Capitalist, Statista Digital Market Outlook

Google is in the best position to collect data
Share of tracked websites
64.4%
28.8%
12.2% 11.0% 10.5%

8.0%
6.5% 5.9%
Note: based on the analysis of 144 million websites loaded by 850,000 Ghostery users from more than 20 countries
32 Source: Ghostery, Cliqz
Google is able to track most of its users’ life and
activities via its many different platforms and services
Google services, apps or products used for data collection
YouTube Photos Search Maps Chrome

Videos watched, People and Queries searched Locations visited, Browser history,
uploaded places tagged places searched, websites visited,
regular travels bookmarks
Waze News Ads Shopping

Directions searched, News sites viewed, Ads clicked, topics Products searched,
places visited stories read interested in clicked on or bought
Books Fit Hangouts Calendar Gmail

Books read, Fitness level, Contacts, Upcoming plans, Contacts, e-mails
searched fitness goals conversations appointments, people met sent, e-mail content
33 Source: thebestvpn.com
Data usage
In addition to the aforementioned threats, extensive
data collection also has some pleasant
consequences for consumers. These include
personalized purchase recommendations or content
that is created especially for certain target groups.
Both are highly valued by customers as they improve
the shopping experience or the satisfaction with
entertainment services. Many consumers are
actually willing to share their data if they receive
better-fitting ads in return.
Data collection can also be brought to a new level:
China’s social credit systems are an example of this.
The Chinese social credit systems go a step further
than the usual economic credit systems. They
evaluate not only a citizen’s economic behavior but
also their entire online and offline behavior and
aggregate it into a personal score. While this might
sound restrictive and invasive to many Western
societies, these systems are very established and
valued in China.
34
Many customers are willing to share personal data in
order to receive better-fitting ads
Agreement to the use of personal data in order to get ads that relate better to the person’s interests
China 38%
India 37%
Mexico 35%
Italy 34%
United States 30%
Canada 24%
South Korea 24%
United Kingdom 23%
Russia 22%
Spain 21%
France 19%
Germany 19%
Australia 18%
Brazil 18%
Japan 9%
“The usage of my personal data is ok for me if the result is ads that relate better to my interests”; Multi Pick; n=25,667
Customers particularly value eCommerce purchase
recommendations
Approval of personalized offers and recommendations on selected platforms
Amazon 38%
Facebook 8%
Travel
5%
websites
Fashion
4%
shops
Instagram 1%
None of the
43%
above
Other 2%
n=1,009 respondents in Germany; >= 16 years

36 Source: Statista Survey Werbung und Datenschutz 2017
Personalized, algorithm-based advertisements can
produce a better fit to each customer’s preferences
Advertising’s programmatic way of working
Customer touch points Information Algorithm Modular creation of Display personalized

determines content and placement advertisement
best-fitting
advertisements
▪ Customer information
▪ Context information
▪ Location and situation
Setup
▪ Strategy of the company
▪ Creative ideas
▪ Goals and intentions of

advertisement
37 Source: t3n, Statista Digital Market Outlook

While programmatic advertising is especially popular
in the Netherlands and the UK, Germany is far behind
Ad spending shares in 2017

Programmatic Non-programmatic
15%
25%
38%
54%
62%
67% 69%
74%
85%
75%
62%
46%
38%
33% 31%
26%
Netherlands United Kingdom United States Japan Canada China France Germany
38 Source: OnAudience, Statista Digital Market Outlook

The global digital advertising market is heavily
dominated by Google
Digital advertising market shares in 2017
Other
31%
39%
1%
3%
3%
4%
5%
16%
39 Source: Company information, Statista Digital Market Outlook

Chinese consumers are particularly willing to share
their data in order to receive benefits or rewards
Willingness to share personal data in exchange for benefits or rewards
38%
30%
29%
28%
26%
25%
24%
20%
17%
16% 16%
15%
14%
12%
8%
United South United

China Mexico Russia Italy Brazil States Argentina Korea Australia Kingdom Spain France Canada Germany Japan
n=22,000 internet users; top 2 boxes (agreement) / bottom 2 boxes (disagreement) out of 7-point scale – rounded
40 Source: GfK survey
China’s social credit systems compile data from
different sources to create a score for every person
Input and consequences of the social score
Traditional input Benefits

Payment of
Income tax Loan Payment of ▪ Priority for school admissions and employment
court
payment repayment bills
judgements ▪ Easier access to loans and credits, as well as tax breaks
▪ Cheaper public transport
Social input ▪ Shorter waiting times in hospitals
Adherence to ▪ Fast-track promotion at work

Adherence to Volunteer
family-planning
traffic rules activity
limits
Payment for Punishments

Filial piety public Criminal record
transportation ▪ Denial of licenses, permits and access to social services
▪ Exclusion from booking flights and high speed train tickets
Online input ▪ Ineligibility for government jobs

▪ No access to private schools
“Reliability” of Interaction with
information other internet Shopping habits ▪ Public shaming online or on TV screens in public places
posted online users
41 Source: wccftech.com, Bertelsmann Stiftung

Social credit systems are highly popular in China
Participation in social credit systems in China
80%
58%
31%
16%
7% 8%
Commercial credit Sesame credit Tencent credit Government pilot I do not take part I don’t know
system
n=2,209 Chinese citizens with access to internet; Feb–Apr 2018

42 Source: Genia Kostka, Freie Universität Berlin
The majority of the Chinese population approves of
social credit systems
Approval of social credit systems in China

strongly approve somewhat approve neither nor somewhat disapprove strongly disapprove
Overall By income By confidence in government
1% 1% 1% 1% 1% 8% 1% 1%
12%
19% 17%
30% 30%
31%
33%
31% 31%
29%
33%
60%
55% 51%
49%
40%
35%
All low income medium income high income confidence in no confidence in

government government
n=2,209 Chinese citizens with access to internet; Feb–Apr 2018

43 Source: Genia Kostka, Freie Universität Berlin
The unprecedented amount of data can be used for
multiple purposes and most of them are AI
Possible applications for Big Data and AI
Data-driven
discovery
and innovation
Hyperscale
Radical
real-time
personalization
matching
Data
Enhanced Massive
decision making data integration
44 Source: McKinsey
Artificial Intelligence
One of the buzzwords that you cannot seem to get around lately is teach themselves without any prior information. But this step has not
“Artificial Intelligence”. It seems like every company and every influencer been reached yet. Scientists disagree about the potential implications of
in the tech sphere is talking about its potential and what it will do for us fully aware machines as it is impossible to predict what these machines
in the future. But what exactly is Artificial Intelligence? What is it used for? will be able to do and how this will affect humanity. Some consider them
Who invests in it? This chapter will answer these questions. a great threat because they will be considerably more intelligent than
humans and will be capable of teaching themselves.
The term “Artificial Intelligence” (AI) is not new. It was already established
in the 1950s and describes machine intelligence that is able to process, AI use cases
analyze, and react to input and changing situations by itself. While simple
robotic process automations only deliver a fixed set of actions, advanced Although the concept of AI sounds futuristic, it is already used by many
AI is able to learn from humans and past behavior and makes decisions companies. Examples are image recognition, language processing, data
on its own. All AI systems are composed of sensing and processing analysis, or the planning and optimization of processes. Many start-ups
components, while advanced AI also contains learning components. and established companies are working on bringing AI applications to
These components are running in a never-ending cycle, leading to better the market or use it for their own products and processes. Interestingly,
decisions for the next situation. the travel industry will most likely experience the highest impact of AI
applications: AI could increase the travel industry’s revenue by more than
Today, machines are already partially aware, which means they are able 11% by 2025. At the same time, it is the sector with the least adoption of
to improve learned actions by themselves, but they still need human AI technologies. In the technology sector, on the other hand, 32% of
interaction and teaching in order to learn something new. The next and companies were already using AI technologies in 2017.
final step of AI development will be fully aware machines, which can
45
Well-known examples of companies that are already using AI for their each. IBM and Microsoft are dominating the AI knowledge landscape
products are Amazon with Alexa’s language processing or Tesla with its regarding the number of patent applications.
autonomous driving features.
Investments in AI
An everyday object that can also be equipped with AI is the smartphone
keyboard. The company SwiftKey developed an AI technology that is able Investing in AI becomes increasingly relevant with global enterprise
to understand the context of a message and makes suggestions for the investments rising from US$12 billion in 2018 to US$232 billion in 2025.
next word based on this context. While the overall AI market is of great interest to companies and
investors, machine learning has been the most prominent application of
The Chinese news and information content platform Toutiao by AI so far. It attracted 62% of the overall AI investments in 2017, and the
Bytedance uses AI for their automated journalism concept. This company vast majority of AI start-ups are focusing on machine learning.
is still rather unknown in the United States and Europe. Toutiao creates
and fills users’ news timeline based on demographics and their previous Global funding for AI companies made a huge leap in 2017, reaching
and current usage behavior. The AI is managing 90% of the content on US$15 billion. While companies from the United States received most of
the newsfeed. Additionally, it creates and writes content all by itself. the deals in the past, their share is continuously decreasing and stood at
only 39% of all global deals in 2018. The top 3 highest-funded start-ups
Impact of AI are from China.
The increasing application of AI technologies will lead to a huge rise in But not only investors are betting on AI: Many large tech companies are
global revenues made with AI applications, from only US$7 billion in developing AI applications themselves or acquire start-ups active in the
2018 to US$90 billion in 2025. The majority (45%) will be made in North AI field. When comparing the acquisitions of Apple, Google, Facebook,
America, followed by Asia and Europe with almost one quarter each. Microsoft, and Amazon, it becomes clear that their hunger for AI start-
ups has grown immensely. While all five companies have bought start-
Asia in general and China in particular are already very established in the ups with a focus on AI in the past 18 years, Apple and Google have
AI market and will continue to grow in the future. The Chinese acquired by far the largest number of AI start-ups with 16 and 15 each.
government revealed its plans to become an AI-first economy and the
world leader concerning AI application and implementation by 2030. All this shows that large tech players and investors are considering AI to
With an additional US$7 trillion in GDP by 2030, China will most likely be an important technology for the future.
also be the biggest winner of AI implementation in terms of economic
gains, followed by North America with only US$3.7 trillion. Europe and
the rest of the world are lagging even further behind.
This is also evident in the share of AI patent applications, which are

highest in the United States and China with a share of more than 20%
46
Everyone is talking about AI – and here is why
Global AI impact and use
72% of US$15.7 2.3 million

business trillion jobs
leaders in value
say AI will bring about a business will be added to the economy by 2030 will be created in companies thanks to AI
advantage from AI productivity and personalization technologies by 2020
4 billion 1 billion 75% of

devices with video customer
voice skills cameras interactions
are currently in use will be connected to AI will be managed by AI by 2020
by 2020
47 Source: SAS Institute

Artificial Intelligence is not a new thing: It started in
the early 50s
The evolution of Artificial Intelligence
PHASE 1 PHASE 2 PHASE 3 PHASE 4

Reactive Memory-forming Partially aware Fully aware
machines machines machines machines
Cannot use past experiences Can form memories and draw AI system will be influenced Fully self-aware and conscious
to influence current decisions from past experiences by other entities and will learn
contextually Ability to learn from scratch
Behave exactly the same way Cannot make significant without instructions
each time improvisations based on
memories
Artificial Intelligence
Machine Learning
Deep Learning
1950 1960 1970 1980 1990 2000 2010 2019
48 Source: Statista, Nvidia

Artificial Intelligence is more than machine learning
Artificial Intelligence technology and its applications
(Advanced) Classification
Deep learning robotics
Translation
Predictive analytics
Data extraction
Machine learning Language processing
Speech to text
Vision
Text to speech
Image recognition AI
Speech recognition
Machine vision
Expert systems to help Planning and optimization of

with decision-making processes and products
49 Source: Thompson Reuters

Early AI agents combined with modern machine
learning lead to buzzwords everyone is talking about
Intelligent Automation is based on Robotic Process Automation and Machine Learning
Robotic Process Automation Intelligent Automation Machine Learning

▪ React on input data ▪ Autonomous vehicles ▪ Improve based on input
▪ Act in predefined ways ▪ Prescribing treatment plans ▪ Can react to unknown situations
▪ Usually only do simple tasks ▪ Smart security systems ▪ Can handle complex tasks
▪ Smart warehouse management
▪ Airborne drone technology
50 Source: IBM, DHL, tallyfy, Statista Digital Market Outlook

Machine learning consists of sensing, processing, and
learning components
The typical machine learning cycle

Sensing Processing Learning
2. Data is gathered continuously from the

environment, sensors, and online behavior
1. Training data
is entered into
system
3. Data is aggregated and

harmonized
6. System evaluates the results Machine

(possibly with human help) and
adapts action to improve self-
learning
learning algorithm cycle
4. Data is processed by machine
learning framework
5. Patterns and trends are revealed,

generating insights
51 Source: IBM, DHL

AI use cases
Although the concept of AI sounds futuristic, it is
actually used by many companies already. Many
start-ups and established companies are working on
bringing AI applications to the market or use it for
their own products and processes.
In the technology sector, 32% of companies were
already using AI technologies in 2017. While the use
of AI is already high in technology-dependent
sectors, it will most likely have the highest impact in
the travel industry, where AI could increase the
industry’s revenue by up to 11% by 2025.
Well-known examples of companies already using AI

for their products are Amazon with Alexa’s language
processing or Tesla with its autonomous driving
features. The Chinese news and information content
platform Toutiao by Bytedance uses AI to create and
determine users’ news timeline based on previous
and current usage behavior and is also providing
content created only by AI.
52
AI has applications in all industries
Examples of AI technology applications in different industries
Agriculture Smart sensors Mixed-reality applications Precision agriculture
Banking Virtual assistants Robo-advisors Fraud protection
Automobiles Navigation systems Lane detection systems Self-driving vehicles
Healthcare Health monitors Cancer diagnostics Custom treatment plans
Manufacturing Industrial robots Predictive maintenance Self-correcting systems
53 Source: PwC, Deloitte insights

Many AI start-ups are specializing in a particular
industry
Top 100 AI start-ups in 2019
Healthcare Automotive industry Agriculture Government
Finance & Insurance

Semiconductor Real Estate
Industrials Data management
Telekom Legal, Compliance & HR Retail
Media
Software Training Data Cybersecurity Ads, sales & marketing Other applications
Development
Farming and agriculture are good examples of
specialized AI applications
Use cases for AI and robotics in agriculture
In-field monitoring
Analyzing satellite images
Predictive analysis Agricultural robots Assessing crop and

soil health
The value of AI in agriculture will quadruple by 2025
Value of AI in agriculture in million US$
+407%
2,629
2,146
1,752
1,430
1,168
953
778
635
519
2017 2018 2019 2020 2021 2022 2023 2024 2025
56 Source: marketsandmarkets.com, alliedmarketresearch.com, Statista Digital Market Outlook

In medicine, the most promising applications of AI are
robot-assisted surgeries
Potential annual value1 of selected AI applications in billion US$ by 2026
Robot-assisted surgery 40
Virtual nursing assistants 20
Administrative workflow 18
Fraud detection 17
Dosage error reduction 16
Connected machines 14
Clinical trial participation 13
Preliminary diagnosis 5
Automated image diagnosis 3
Cybersecurity 2
1: “value” refers to the estimated potential benefit of each application

57 Source: Accenture, hbr.org
The value of AI in medicine will grow by 2400% by
2025
Value of AI in medicine in million US$
2,420%
18,119
15,944
13,769
11,594
9,419
7,244
5,069
2,894
719
2017 2018 2019 2020 2021 2022 2023 2024 2025
58 Source: marketsandmarkets.com, alliedmarketresearch.com, Statista Digital Market Outlook

Overall, the travel and high-tech industries will benefit
most from AI
Potential annual impact of AI technologies in global industries by 2025
700
600 Retail
500 Consumer packaged

AI impact in US$ billion
Healthcare systems
and services goods Travel
Public and Transport and
400 social sector logistics
Basic materials Banking

300 Insurance
Oil and gas Automotive and High tech
assembly
200
Advanced electronics/
Chemicals Media and
semiconductors
entertainment
100
Agriculture Telecommunications
Aerospace and Pharmeceuticals and
defense medical products
0
1 2 3 4 5 6 7 8 9 10 11 12
Maximum potential impact as % of industry revenue
59 Source: McKinsey Global Institute

Despite having the highest potential, travel and
tourism companies are slow in adopting AI
Share of companies that adopted AI technologies in 2017
Technology 32%
Automotive and assembly 29%
Financial services 28%
Energy and resources 27%
Media and entertainment 22%
Transportation and logistics 21%
Consumer packaged goods 20%
Retail 19%
Healthcare 17%
Education 17%
Construction 16%
Professional services 13%
Travel and tourism 11%
60 Source: McKinsey Global Institute

AI is not only about industrial usage, it is also a part of
our daily life
Examples of consumer-focused AI applications
Amazon’s Alexa For a seam- Like Amazon,

makes use of less integration Google‘s screen
natural language of virtual objects calling feature
processing (NLP) into reality, uses NLP to
technology to understand human speech and Microsoft HoloLens applies object transcribe incoming calls and automatically
give responses based on the conversation‘s recognition, vision processing, and deep identify unwanted calls based on the call‘s
context. neural networks technology. context.
Deep learning By using Tesla‘s Autopilot

technology is deep learning combines a
supposed to methods and wide set of AI
help Facebook vision proces- technologies
to automatically detect fake news in users‘ sing methods, Apple‘s Face ID feature is like deep learning, predictive analysis,
newsfeeds. In addition to texts, images and capable of distinguishing human faces at an object recognition, and machine vision to
videos are also analyzed. error rate of only 1:1,000,000. enable fully autonomous driving.
61 Source: Company information

Toutiao uses AI to generate and aggregate content
based on user behavior
Illustration of Toutiao’s automated journalism concept
Creates your personal newsfeed

Views/reads Exclusive content
Content written
Likes
by AI
Third-party
Shares
content
Your data Content chosen for you

User interests and behavior (90% moderated by AI) Media coverage
User location Events
62 Source: Statista Digital Market Outlook

In marketing, the personalization of content is the
most frequently used AI application
Worldwide adoption of AI in marketing personalization according to industry professionals in 2018

Use or plan to use No plans to use
Personalized content, offers, and customer expierences 80% 20%

Auto-generation of content for personalization 79% 21%
Product and content recommendations 78% 21%
Audience identification 76% 24%
Automation of cross-channel personalization 72% 29%
Delivery of customer activity insights 70% 30%
Provide predictive customer service 62% 38%
Customer churn/loss prevention 61% 39%
Automation of chatbot, virtual assistant, etc. 61% 39%
Delivery of sentiment analysis from social channels 59% 42%
Customer self-service 58% 42%
Social marketing automation 55% 45%
Auto-generation of customer/technical support scripts 54% 46%
For use in augmented or virtual reality applications 46% 54%
Automation of IoT personalization 46% 54%
Note: Due to rounding, the percentage sum of all respondents may be slightly lower or higher than 100%
63 Source: Adobe
NVIDIA’s AI software GauGAN is able to create
photorealistic pictures from rough drawings
How generative adversarial networks work NVIDIA‘s GauGAN

GANs1 are the product of two networks: a generator and a With this software, users can create simple pictures with the help of a
discriminator. The two go head-to-head on millions of images, with the paint bucket, pen, and pencil. A series of objects can also be put into the
generator presenting images to the discriminator, which is then trained frame. If a user selects the cloud button and draws a line, the software
to distinguish real from fake images using real samples to provide pixel- will produce a wisp of photorealistic clouds. The neural network has
by-pixel feedback, continuously improving on details. been trained to create realistic landscape images. If the user changes
the setting from cloud to snow, GauGAN1 will reconfigure the scene to
reflect a winter setting. The result is always a unique, synthesized image.
Training set with
Random input GauGAN is multimodal: If two users create the same sketch, the
real images1
software creates different results.
Simple input and photorealistic output:

AI1: Generator
creates a AI learns with

fake image real images
AI2: Discriminator
decides if image is
real or fake
Note: Gau = named after the postimpressionist painter Paul Gauguin; GAN = Generative adversarial networks; for GauGAN, NVIDIA turned to 1
million images on Flickr to train the neural network
64 Source: Company information, techcrunch, towardsdatascience.com
SwiftKey’s AI keyboard predicts what users will type
Before 2016: prediction model1 After 2016: neural network model
The last words in a The neural network

sentence constitute model uses all words
Meet you at the _________ the input for the Meet you at the of the sentence as
Input prediction model. Input input.
It is trained to
recognize statistical
top 5th hotel 2nd
1st at the moment The model ranks the regularities and
most common next patterns. It tries to
2nd at the end office 3rd
Analysis words and offers Analysis end 4th identify a cluster that
these as predictions. captures the
3rd at the same same 6th
airport 1st meaning of the
sentence.
These word It then offers the

combinations might most fitting word as
Output Meet you at the moment be the most Output Meet you at the airport a prediction and can
common ones but even predict phrases
are not necessarily it has not seen
relevant to the before.
context.
1: N-gram model
65 Source: Swiftkey
By 2025, almost every fifth dollar spent globally on AI
will be related to algorithmic financial trading
Estimated global shares of spending on AI applications in 2025
Predictive maintenance
Patient data processing
10% Content distribution on social media
15%
8%
Text query of images
8%
Image recognition and tagging Automated geographical
16% feature detection
7%
Object identification
and tracking
7%
Algorithmic Object detection/

financial
17% 6% classification
tracking
6% Contract analysis
66 Source: Tractica Research

Impact of AI
The increasing application of AI technologies will lead
to a huge rise in global revenues made with AI
applications from only US$7 billion in 2018 to US$90
billion in 2025. The majority (45%) will be made in
North America, followed by Asia and Europe with
almost one quarter each.
Asia in general and China in particular are already
very established in the AI market and will continue to
grow in the future. The Chinese government
revealed its plans to become an AI-first economy and
the world leader concerning AI application and
implementation by 2030.
With an additional US$7 trillion in GDP by 2030,

China will most likely also be the biggest winner of AI
implementation in terms of economic gains, followed
by North America with only US$3.7 trillion. Europe
and the rest of the world are lagging even further
behind.
67
AI will be a US$90 billion market by 2025
Estimated worldwide revenues1 from the AI market in billion US$
89.8
71.0
+45%2 53.2
38.0
26.0
17.3
11.3
7.3
3.2 4.8
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
1: Built upon a taxonomy of 294 real-world use cases 2: CAGR: Compound Annual Growth Rate / average growth rate per year
68 Source: Tractica Research
North America remains the biggest market for AI
Estimated regional share of AI applications

North America Europe Asia-Pacific Latin America Middle East & Africa
4% 4% 5% 4% 4% 4% 4% 3%
4% 4% 6% 5% 5% 4% 4%
6%
20% 23%
21% 25% 24%
25% 23% 23% 23% 26%
23%
38% 31% 23% 23% 23%
27% 26% 23% 24%
48% 44% 44% 45%

42% 40% 40% 42% 43%
38%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
69 Source: Tractica Research, Statista Digital Market Outlook

AI has the potential to increase labor productivity
Impact of AI on labor productivity in developed countries in 2035
Sweden 37%
Finland 36%
United States 35%
Japan 34%
Austria 30%
Germany 29%
Netherlands 27%
United Kingdom 25%
France 20%
Belgium 17%
Italy 12%
Spain 11%
70 Source: Accenture, Frontier Economics

China gains the most from implementing AI
Regional gains in GDP from implementing AI by 2030
Northern
Europe
US$1.8 trillion
North America China
US$3.7 trillion US$7.0 trillion
Southern
Europe
US$0.7 trillion
Developed
Asia
Rest
Latin
of world
America US$0.5 trillion
US$2.1 trillion
71 Source: PwC
The Chinese government wants to become the AI
leader and is currently focusing on computer vison
China’s AI plans Focus of AI companies in China in 2017

China’s State Council released a roadmap in 2017 to create a domestic
US$148 billion AI industry and become the global leader in AI by 2030:
Algorithms
▪ Keeping pace with leading AI technologies around the world by 2020 Computer vision
8%
▪ Major breakthroughs by 2025
Hardware
▪ World leader by 2030 11%
Planned and launched in 2018:
35%
▪ AI industrial park in Bejing
▪ 5-year AI talent training program (5,000 students, 500 teachers)
China’s tech giants and AI
21%
▪ Facial recognition ▪ 7 AI-related ▪ Slogan: “AI in all”

technology research labs ▪ AI lab in Shenzhen
▪ Voice assistants ▪ Voice assistant ▪ Developed an open
▪ Open mobile AI ▪ Industrial design AI platform
Natural
platform with ▪ Intelligent ▪ Leading techno-
language
Huawei manufacturing logies in image, face
processing 25% Voice recognition
▪ Autonomous driving ▪ Robotics and audio analysis
72 Source: abacus, SCMP, Forbes; Tsinghua University

AI-enhanced facial recognition is rolled out across
China
Deals for facial recognition technology in China Ways facial recognition AIs are used in China
Funding amount in US$bn Number of deals China plans to introduce a system that will identify any of its 1.3 billion
citizens in seconds with a centralized identity database. At the moment,
22 error rates of the technology can be as low as 0.8%.
1.6
▪ Intellifusion (AI unicorn) works with the local police in Shenzhen to
display the faces of jaywalkers on LED screens at intersections. They
also cooperate with local mobile phone carriers and WeChat so that
jaywalkers will receive a text message on their phone.
1.2 18
▪ The Beijing Subway plans to introduce “bio-identification” technology
that includes facial recognition and palm scanning systems to
increase efficiency by eliminating the need for tickets.
▪ The railway police in Zhengzhou became the first in China to use

facial recognition eyewear created by Xloong to screen passengers
(verifying identities, spotting impostors, and flagging suspected
criminals).
5 ▪ Alibaba partnered with an agricultural company to raise pigs using

AI, allowing farmers in Sichuan province to keep an eye on their hogs.
0.2 The facial recognition technology keeps tabs on each pig’s activities
and helps to record its vital signs and other statistics.
1
0.1
2015 2016 2017 2018
73 Source: CB Insights, Forbes, Abacus

In AI research, China focuses on agriculture, while
Europe and the U.S. are prioritizing humanities
Index of AI-related research publishing

China Europe United States
2000 2017
Natural Natural
sciences sciences
2 2
1.5 1.5
1 Engineering 1 Engineering
Humanities Humanities
and technology and technology
0.5 0.5
0 0
Medical and Medical and

Social sciences Social sciences
health sciences health sciences
Agricultural Agricultural
sciences sciences
Note: A value of 1.0 indicates that a country’s research activity in AI corresponds exactly with the global activity in AI
74 Source: AI Index 2018, Elsevier
Most AI patent filings are made in the U.S. and China
Share of worldwide AI patent applications in 2017
24%
22%
13%
11%
8%
6% 6%
4%
2% 2%
2%
United China Japan WIPO1 EPO2 Republic Germany Canada Australia India ROW3
States of Korea
1: World Intellectual Property Organization 2: European Patent Office 3: Rest of world

75 Source: WIPO 2018
IBM and Microsoft are dominating the AI knowledge
landscape
Technology leaders by number of AI patent applications

Most patents for this segment 2nd most patents for this segment
Total
IBM Microsoft Samsung Alphabet Siemens Hitachi Toyota Sony SGCC Panasonic
patents
Personal devices2 5,840 1,050 1,438 922 709 268 306 169 495 160 323
Transportation 5,590 424 278 538 333 415 735 1,987 209 184 487
Telecommunications 5,261 759 754 755 593 458 338 198 538 374 494
Life and medical sciences 4,200 553 319 595 119 1,127 447 188 372 158 322
Document management3 3,897 1,223 944 265 521 170 270 14 196 43 251
Business 3,118 935 780 183 463 60 168 26 194 194 115
Security 3,079 486 377 446 206 293 297 92 299 322 261
Industry and
2,091 546 192 131 61 266 199 36 46 518 96
manufacturing
Physical sciences and
1,553 112 155 165 53 323 256 267 85 36 101
engineering
Energy management 1,478 43 22 140 18 164 141 173 34 646 97
Other 6,091 1,020 1,242 532 925 248 322 215 874 338 375
Total patents 7,151 6,501 4,672 4,001 3,792 3,479 3,365 3,342 2,973 2,922
Note: as at 2016 (latest data available) 2: computing and human-computer interaction 3: and publishing
76 Source: WIPO 2018
Investments in AI
Investing in AI becomes increasingly relevant with
global enterprise investments rising from US$12
billion in 2018 to US$232 billion in 2025. While the
overall AI market is of great interest to companies
and investors, machine learning has been the most
prominent application of AI so far. It attracted 62% of
the overall AI investments in 2017, and the vast
majority of AI start-ups are focusing on it.
Global funding for AI companies made a huge leap in

2017, reaching US$15 billion. While companies from
the United States received most of the deals in the
past, their share is continuously decreasing. The top
3 highest-funded start-ups are from China.
But not only investors are betting on AI: Many large

tech companies are developing AI applications or
acquire start-ups active in the AI field. All this shows
that large tech players and investors are considering
AI to be an important technology for the future.
77
Investing in AI becomes increasingly relevant
Global enterprise investment in the AI market in billion US$
27.4
12.4
41.3 62.8 96.4 148.8 231.9
18.3
2018 2019 2020 2021 2022 2023 2024 2025
Note: The diameter refers to the market size; Artificial Intelligence (AI) includes Intelligent Automation (IA), Machine Learning (ML), and Robotic
Process Automation (RPA)
78 Source: KPMG
Machine learning attracts almost two thirds of all
investments in AI
Global breakdown of investments in AI applications in 2017
Smart robotics Virtual agents

Autonomous vehicles 2% 2%
4%
Computer vision 31%
62%
Machine learning
Note: Due to rounding errors, the percentage sum of all categories may be slightly higher than 100%
79 Source: McKinsey
The vast majority of AI start-ups are focusing on
machine learning
Number of AI start-ups in 20181
Machine learning applications 890
Natural language processing 355
Machine learning platforms 335
Computer vision applications 267
Virtual assistants 235
Computer vision platforms 227
Smart robots 195
Speech recognition 185
Recommendation engines 113
Gesture control 64
Context-aware computing 33
Video recognition 28
Speech-to-speech translation 21
1: as at December 2018
80 Source: Venture Scanner
With the emergence of more and more AI start-ups,
global AI-related funding is skyrocketing
Annual global AI-related funding in billion US$
15
+63%1
5
4
2014 2015 2016 2017
1: CAGR: Compound Annual Growth Rate / average growth rate per year
The U.S. is losing the AI funding battle
Global AI-related equity deals

U.S. deal share Other countries’ deal share China’s deal share
3% 4% 6%
11%
16%
24%
33%
37%
42%
46%
74%
63%
58%
48%
39%
2014 2015 2016 2017 2018
The top 3 highest-funded AI start-ups are from China
AI start-ups ranked by funding in million US$1
AI-powered content
3,105
platforms
Security (facial 2,600
recognition)
Robotics 940
AI analytics news 907

platform
Autonomous mobility
790
as-a-service
Financial technology 720
Security (facial 607

recognition)
Material discovery 574
Security (network and

cloud security) 481
Healthcare (genomic
455
information
1: as at March 2019
83 Source: Crunchbase
Apple and Google are on a major shopping spree for
AI start-ups
Number of AI start-up acquisitions by major U.S. tech companies

Speech Machine learning Vision Language processing Total:
Evi Technologies Harvest.ai Sqrrl

4
Orbeus
Genee XOXCO
Netbreeze Equivio Maluuba 8
SwiftKey Semantic Machines Lobe
Face.com Wit.ai Zurich Eye

Ozlo 6
Mobile Technologies Masquerade Technologies
Dark Blue Labs Banter HalliLabs

Vision Factory Api.ai
DNNresearch Jetpac AIMatter
15
Clever Sense DeepMind Emu Granata Timeful Moodstocks Onward
Vocal IQ tuplejump Pop Up Archive

Lattice Regaind Shazam
Siri Novauris Technologies Perceptio Turi Init.ai 16
Emotient Angel.ai RealFace SensoMotoric Silk Labs
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
84 Source: Visual Capitalist, CB Insights, Statista Digital Market Outlook as at February 2019
Funding & investment
Digital products and services have been driving the economy forward for However, in terms of capital invested the Japanese SoftBank Vision Fund
the last two decades, and investors are still optimistic about the remains untouched. It is by far the largest pool of private capital ever
industry‘s future. raised and invests heavily into tech start-ups.
The Americas captured most of VC funding, but Asia is close. At the same Softbank – the unicorn hunter
time, supergiant VC rounds of US$100 million and more in funding are
becoming more common and are changing the investment landscape. The Japanese Softbank Group co-financed many of the largest global VC
Software companies are getting almost 40% of venture capital deals last year, focusing on Asian and U.S. tech companies. It is involved
investments, making Software the industry which attracts by far the most in start-ups spread all over the globe, ranging from the United States to
investments. China, Europe and Southeast Asia.
The Americas have historically captured most volume of the global VC The five largest unicorn investments made by Softbank are AI company
funding and remained #1 in 2018, but Asian start-ups have been ByteDance, ride-hailing providers Uber and Didi Chuxing, office provider
catching up for the past 5 years. Europe, however, is lagging behind – WeWork and ride-hailing and delivery company Grab. Its biggest unicorn
and the gap is growing: Only 10% of global VC investment still finds its investment is ByteDance, which is valued at US$75 billion, closely
way into Europe, and UK companies get the lion’s share. followed by Uber with US$72 billion.
The American seed accelerator Y Combinator was the most active

investor in 2018 with 141 funding rounds in total, followed by Sequioa
Capital China with only 69 funding rounds.
85
The global unicorn club Is the market overvalued?
What do Uber, SpaceX and Airbnb have in common? They all are so- The high valuation of companies on the stock market leads to the
called unicorns, i.e. private companies with a valuation of over one billion question whether we are moving towards the next bubble and the next
US$. Theoretically, any company can reach the unicorn club, but most of recession. The U.S. stock market reached a record-high level of over 1.5
the unicorns actually share some common traits: Many develop internet times the country’s GDP in 2018. At the same time, market valuations
software services and were founded – and funded – in the U.S. and and the average investment sum per deal were higher than during the
China. Out of the top 15 unicorns, three are from China, one each from dot-com bubble. When looking at unicorns or newly-traded companies
the UK and Indonesia, and the remaining 10 are from the U.S. Currently, and their valuations, it becomes clear the latter are hard to justify with
there are 334 unicorns worldwide and the most valuable unicorn is the the companies’ revenues, especially if you compare them to those of
Chinese AI company ByteDance. traditional players. Netflix’s market valuation is almost as high as
Comcast’s, but it only generates a fraction of the latter’s revenue. The
Becoming a unicorn is not easy as it requires a killer business model and craziest valuation, however, has WeWork, with 18.8 times its revenue as a
multiple successful funding rounds. In the end, only about 1% of the market cap.
companies that acquire seed funding are able to reach that status.
Nevertheless, the U.S. still saw a record number of newly-born unicorns The high stock market values and the high unicorn valuations are fueling
at the end of 2018. the rumors that the market is overheating. Looking at tech giants‘
balance sheets, you can see that they massively increased their
Market valuations are on the rise investments in 2018. They built networks and data centers, getting ready
It looks as if there is only one way for tech stocks: up. Market valuations for further growth. But the investments in hard assets might also be a
of internet and tech companies wiped banks and oil companies off the way to prepare for rough times on the market.
list of the world’s most valuable companies in 2017 and continued their Recession in tech
growth in 2018. The race between the highest valued companies is also a
race between two countries: The U.S. have six out of the world’s 10 The economy runs in cycles, and after ten years of steady growth, many
biggest tech companies, while China has the remaining four. market players expect it to slow down in 2019, possibly even going into
decline. So when the day comes and the broad economy plunges, what
As tech giants grow and actively reshape the world we live in, no investor will it be like for the digital economy? Recessions heavily influence
wants to be late for the party this time. Everyone knows that investing in funding, cutting down the market valuations of publicly traded
some Apple stock 15 years ago would have made you rich by now. So companies and making it much harder for start-ups to attract
hopes for the future of Amazon and Netflix are high – and their market investment. But we are not there yet. The so-called “Fall of the FAANG1”
caps have grown fivefold in less than five years. at the end of 2018 was interpreted as a possible start of a recession, but
stock prices bounced back in 2019.
86 1: Facebook, Amazon, Apple, Netflix, Google

The Americas capture most of VC funding, but Asia is
close
Regional comparison of the number of financing deals and total investments in 2018
Europe
2,745 Asia
Americas US$21bn
5,066
5,936 US$81bn
US$102bn
Rest of world
500
US$3bn
87 Source: PwC, CB Insights

Huge VC funding rounds are becoming more common
Number of VC rounds totaling more than US$100 million
65
60
55
50
45
40
35
30
25
20
15
10
5
0
January July January July January July December
2016 2016 2017 2017 2018 2018 2018
Note: excludes private equity, corporate rounds, and non-venture financing activity
88 Source: Crunchbase, Statista Digital Market Outlook
Software dominates VC funding deals worldwide
VC investments in 2018
Software Pharma & Biotech Commercial Other

Services
10% 6%
Consumer Healthcare Media
Goods & Services &
Recreation Systems
2%
IT Hardware
4%
Healthcare
Devices & 2%
Supplies
Energy
Energy
39% 5% 3% 1% 30%
89 Source: KPMG, Pitchbook

Asia-Pacific is now a major recipient of VC funding
VC investments
Americas Europe Asia-Pacific
14%
20%
29%
37% 37% 37%
17%
14%
13%
12% 13% 10%
69% 66%
58%
51% 50% 53%
2013 2014 2015 2016 2017 2018
90 Source: KPMG, PitchBook

Most VC investments in Europe go to the UK
VC investments in Europe in billion US$1

8.7
5.0
4.2
3.7
1.6 1.4 1.4

0.7 0.7 0.6 0.6 0.6 0.6 0.5 0.3 0.2 0.2 0.1 0.1
Netherlands
Switzerland
Denmark
Germany
Kingdom
Portugal
Belgium
Sweden
Norway
Estonia
Finland
Austria
Ireland
Cyprus
France
United
Russia
Spain
Israel
Italy
1: converted EUR/USD = 0.88562

91 Source: dealroom.co
Y Combinator was the most active investor in 2018
Most active lead investors by number of rounds in 2018
Y Combinator 141
Sequioa Capital China 69
SOSV 63
Tencent Holdings 61
Start-Up Chile 54
New Enterprise Associates 50
Insight Venture Partners 44
IDG Capital 43
Accel 43
Quake Capital Partners 37
Business Growth Fund 36
Sequioa Capital 36
Goldman Sachs 35
Alibaba Group 35
Venture Kick 34
Tiger Global Management 33
Entrepreneur First 33
92 Source. Crunchbase
Although not the most active one, SoftBank’s Vision
Fund is the largest pool of private capital ever raised
Approximate size of top VC funds in 2018
Softbanks’ Vision fund 100
Apollo Fund IX 25
Blackstone V Fund 22
Goldman Sachs VI Fund 20

Apollo
Fund IX
TPG VI Fund 20
TPG VI Fund
KKR 2006
Softbank FundFund US$100bn
Vision 18
Sequoia Global Growth Blackstone

8
Fund III V Fund
Andreessen Horowitz
6
I-V Goldman Sachs
VI Fund
Greylock Fund XV 1
KPCB Digital Growth

1
Fund III
93 Source: FT research, recode, techcrunch, Pitchbook, Forbes

Softbank – the
unicorn hunter
The Japanese Softbank Group co-financed many of
the largest global VC deals last year, focusing on
Asian and U.S. tech companies. It is involved in start-
ups spread all over the globe, ranging from the
United States to China, Europe and Southeast Asia.
The five largest unicorn investments made by
Softbank are AI company ByteDance, ride-hailing
providers Uber and Didi Chuxing, office provider
WeWork and ride-hailing and delivery company
Grab. Its biggest unicorn investment, which is also
the highest valued unicorn so far, is ByteDance,
which is valued at US$75 billion, closely followed by
Uber with US$72 billion.
94
SoftBank’s Vision Fund invests more per quarter than
the size of some of the biggest funds
SoftBank’s Vision Fund’s investments in billion US$ and number of deals

Investment sum Deals
12.3
11
10.0
9.1
8
7
5.7
5 5
4
4.1
3.4
3.0
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Note: includes deals from Softbank alone and with partners

95 Source: crunchbase
The Softbank Group was part of many of the largest
global VC deals in 2018
Largest global VC deals in 2018
Company Location Sector Industry Deal value Investors

Mobile &
South Korea Mobile Commerce US$2.0bn SoftBank Group
Telecommunications
SoftBank Group, Sequoia
Manbang
China Internet Internet Software & Services US$1.9bn Capital China, Lightspeed China
Group
Partners
All-Stars Investment, Goldman
China Internet Accounting & Finance US$1.33bn
Sachs, LionRock Capital
United States Software Gaming US$1.25bn ICONIQ Capital KPCB, KKR & Co.
United States Industrial General Building Materials US$1.1bn SoftBank Group
SoftBank Group, Alibaba

Indonesia Internet eCommerce US$1.1bn
Group, Sequoia Capital India
Business Products &
United States Facilities US$1.0bn SoftBank Group
Services
SoftBank Group, Greenoaks
India Internet eCommerce US$1.0bn Capital, Lightspeed India,
Sequoia Capital India
Mobile & Coatue Management, Tencent
India Food & Grocery US$1.0bn
Telecommunications Holdings, Naspers

SoftBank has a diversified portfolio of investments all
over the world
Selected investments of the SoftBank Group
Europe
South Korea
Japan
United States
China
India
Singapore
Indonesia
97 Source: FT research, PitchBook, crunchbase

Softbank’s five biggest unicorn investments exceed
US$260 billion in total valuation
Company valuations of Softbank’s five biggest unicorn investments in billion US$ in 2018
75 72 56 47 11
98 Source: Fortune, CB Insights

The global unicorn
club
What do Uber, SpaceX and Airbnb have in common?
They all are so-called unicorns, i.e. private companies
with a valuation of over one billion US$.
Theoretically, any company can reach the unicorn
club, but most of the unicorns actually share some
common traits: Many develop internet software
services and were founded – and funded – in the
U.S. and China.
Becoming a unicorn is not easy as it requires a killer

business model and multiple successful funding
rounds. In the end, only about 1% of the companies
that acquire seed funding are able to reach that
status. Nevertheless, the U.S. still saw a record
number of newly-born unicorns at the end of 2018.
Out of the top 15 unicorns, three are from China,

one each from the UK and Indonesia, and the
remaining 10 are from the U.S. Currently, the most
valuable unicorn is the Chinese company ByteDance.
99
Only 1% of seed-funded companies become unicorns
Venture capital funnel for a group of tech companies headquartered in the U.S. from 2008 to 2017
Fail to Buyout/
raise funding IPO/Exit
Seed 1,119 tech companies 427 158

(38%) (14%)
Round 2 534 118 81

(11%) (7%)
Round 3 335 98 65
(9%) (6%)
Round 4 172 54 22
(5%) (2%)
Round 5 96 51 15
(5%) (1%)
30 18 companies received funding

Round X
but are below US$1bn
12 unicorns (1%)
Note: Percentages do not add to 100% due to rounding

The largest share of unicorns are developing internet
software services
Number of unicorns in 2019
74
49
45
37
33
24
15
13 12
10
8 7 7
Internet Other eCommerce FinTech Healthcare On Hardware Data Social Auto tech Cyber Travel tech Media
software demand analytics security
services
Note: as at March 2019

101 Source: Howmuch.net, CB Insights, Statista Digital Market Outlook
Uber, SpaceX and Airbnb are all members of the
global unicorn club
Selected companies belonging to the global unicorn club
Internet software services eCommerce FinTech Healthcare Services Hardware
Social Data analytics Auto tech Travel tech Media Cyber security Other

102 Source: Howmuch.net, CB Insights
The majority of unicorns are based in the U.S.
Number of unicorns in 2019
United States 162

China 91
United Kingdom 16
India 14
Germany 9
South Korea 6
Indonesia 4
Israel 4
France 4
Switzerland 3
Brazil 2
South Africa 2
Colombia 2
ROW 15

The U.S. saw a record number of newly-born unicorns
in late 2018
Number of new unicorns

United States Asia Europe
21
17
15
11
10
8 8 8
7 7 7
6 6 6
5 5 5
3 3
2 2
1
0 0
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

Southeast Asian tech-start-ups are getting ready for
the global unicorn race
Total founding amount per country/territory and highest funded VC backed tech companies
US$1m >US$10,000m <US$1m
China Japan
Pakistan
South Korea
Nepal
India
Bangladesh
Vietnam
Top 5 valuations
1. Ant Financial US$150bn Sri Lanka
Philippines
2. Grab US$11bn Thailand
Indonesia
3. GO-JEK US$10bn
4. Coupang US$9bn Malaysia
5. Olacabs US$6bn Singapore
Note: only tech companies with new funding since 2014; excludes countries whose highest funded start-ups have not raised more than
US$200,000; data as at March 2019
Chinese AI company ByteDance is the top unicorn
Unicorn valuation in billion US$
75
72
56
47
29
22
20
15
15
12
12
12
12
11
11

Uber is expected to become the second largest tech
IPO
Comparison of (potential) IPOs in billion US$

Potential tech IPOs in 2019 Selected tech IPOs since 2012
104.2
100.0
41.0
31.0
24.8 26.6 26.6
14.2 15.0
12.6
10.0
4.5 5.4
(2018) (2013) (2017) (2019) (2018) (2012)
107 Source: Bloomberg, Fortune, CB Insights, Renaissance Capital

Market valuations
are on the rise
It looks as if there is only one way for tech stocks: up.
Market valuations of internet and tech companies
wiped banks and oil companies off the list of the
world’s most valuable companies in 2017 and
continued their growth in 2018.
The race between the highest valued companies is
also a race between two countries: The U.S. have six
out of the world’s 10 biggest tech companies, while
China has the remaining four.
As tech giants grow and actively reshape the world

we live in, no investor wants to be late for the party
this time. Everyone knows that investing in some
Apple stock 15 years ago would have made you rich
by now. So hopes for the future of Amazon and
Netflix are high – and their market caps have grown
fivefold in less than five years.
108
Top unicorn Bytedance is not even worth one tenth of
Microsoft
Internet companies ranked by valuation in billion US$ in 2019
861
833 829
797
485 477
416
287
153 150
75

109 Source: makrotrends, Yahoo Finance, Kleiner Perkins
Facebook lost the race for the top 5 companies
Most valuable companies by market cap in billion US$

Tech company Traditional company
Top 2006 2011 2016 2017 2019
US$1,670bn US$1,519bn US$2,407bn US$2,407bn US$3,815 bn
1
US$447bn US$406bn US$609bn US$861bn US$861bn
2
3
4
5
Note: Valuation based on data from December 31st of the respective year; valuation for 2019 as at March 4th, 2019
110 Source: morningstar.com, Financial Times, Bloomberg, Statista Digital Market Outlook
While traditional companies are stagnating, the
valuation of tech companies is rising
Closing stock prices of selected companies in US$

Tech company Non-tech company
450
400
350
300
250
200
150
100
50
2014 2015 2016 2017 2018 2019
Note: Values for the years shown are always the first dates of the respective year; the last value shows March 4 th, 2019
111 Source: makrotrends, Yahoo Finance
In the past five years, most top tech players have at
least doubled their valuation
Market cap of top tech companies in billion US$

Septemeber 2014 April 2019
+52% 135%
484%
105%
921 921
894
842
148%
605
99%
503
461
410 392
488%
231
203
153 162
27
112 Source: Ycharts

Is the market
overvalued?
The high valuation of companies on the stock market
leads to the question whether we are moving
towards the next bubble and the next recession. The
U.S. stock market reached a record-high level of over
1.5 times the country’s GDP in 2018. At the same
time, market valuations and the average investment
sum per deal were higher than during the dot-com
bubble.
When looking at unicorns or newly-traded

companies and their valuations, it becomes clear the
latter are hard to justify with the companies’
revenues, especially if you compare them to those of
traditional players. Netflix’s market valuation is
almost as high as Comcast’s, but it only generates a
fraction of the latter’s revenue. The craziest
valuation, however, has WeWork, with 18.8 times its
revenue as a market cap.
The high stock market values and the high unicorn

valuations are fueling the rumors that the market is
overheating.
113
Is the next bubble about to burst?
Total value of all listed shares in the U.S. stock market as % of GDP
Dot-com Financial
bubble crisis
154
146 146
137
110
100
93 >100 =
overvaluation
71
53
45
50
<50 =
undervaluation
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
114 Source: World Bank, Investopedia

The average investment sum per deal is already
higher than during the dot-com bubble
Average VC investment sum per deal in the United States in million US$
18.0
14.4
13.1
11.2
2000 2016 2017 2018

(Dot-com bubble)
115 Source: Forbes, PwC

Comparing market valuation and revenue reveals the
high overvaluation of Tesla, Netflix, and WeWork
Market cap, company revenue, and their ratio in billion US$ in 2018
Revenue Market cap
Broadcasting Workspace Automobiles
x2.0 x0.4
185.9 x10.1 147.1
158.9
94.5
x18.8 x2.2
55.3
46.3
47.0
x1.1 21.5
15.8
3.3 3.7 2.5
Note: WeWork’s annualized revenue in 2018; market caps as at April 11th, 2019
116 Source: yCharts, Yahoo Finance, Morningstar, company information, Statista Digital Market Outlook
But U.S. tech giants are increasing their investments
into hard assets
Development of property, plant, and equipment value vs. goodwill and intangibles in billion US$
Gross property, plant, and equipment Goodwill and Intangibles
2018 95.8 18.7
2017 72.7 16.7
2018 82.5 20.1
2017 59.7 19.4
2018 58.7 43.7
2017 47.9 45.2
2018 91.5 n.a.
2017 77.1 8.0 YOY)

(+59%
2018 31.6 19.6
2017 18.3 20.1
1: Data for 12 months ending December 31st of respective year

117 Source: csimarket.com
Recession in tech
The economy runs in cycles, and after ten years of
steady growth, many market players expect it to slow
down in 2019, possibly even going into decline.
The current trend towards very high valuations and
the possible overvaluation of the market can be
interpreted as a sign of the next economic bubble
that is about to burst. Recessions heavily influence
funding, cutting down the market valuations of
publicly traded companies and making it much
harder for start-ups to attract investment.
But we are not there yet. The so-called “Fall of the

FAANG1” at the end of 2018 was interpreted as a
possible start of a recession, but stock prices
bounced back in 2019.
118 1: Facebook, Amazon, Apple, Netflix, Google

Global growth is expected to slow in 2019 – is the next
recession around the corner?
Real GDP growth in annual percent change

China United States World Global recession
16
Global economy
14 growth forecast
12
10
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
-2
-4
119 Source: IMF World Economic Outlook October 2018

Economy dips lead to funding gaps in VC financing
Value of venture capital investment and real GDP growth in the U.S.
VC investment value in billion US$ Real GDP growth rate in %
120.26
4.8% 99.5
4.4% 4.5%
4.1%
3.8% 3.8% 78.1 76.4
3.5%
61.5 2.9% 2.9% 60.5 2.9% 63.8 2.9%
2.7% 2.6%
31.0 2.5%
46.0 36.4
1.9% 36.3 2.2% 2.2%
1.7% 1.8%
1.6% 32.6 1.6%
29.3
23.7 1.0% 23.1 20.2 26.5 21.6
25.9
15.6 16.9
8.1 11.3 14.9
-0.1%
-2.5%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
120 Source: BEA, U.S. Department of Commerce, PwC, Thomson Reuters, NVCA
Recessions make it harder and more expensive for
start-ups to raise venture capital
What happens to venture capital start-up funding in the next recession?
Stock markets fall Cost of capital rises

Recession Investors drop volatile
starts tech stocks
Consumer activity slows
Cash flows decline
down
Expected exit values

Company valuations fall
decrease
VC funds lose appeal for

investors
Cost of fundraising for
start-ups rises
VC funding becomes Stalled growth / high
more conservative bankruptcy rates
Start-up valuations fall

The so-called “Fall of the FAANG” was interpreted as a
possible start of a recession, but they all recovered
Change in closing stock prices for FAANG1 in % from September 2018 to March 2019
Sep. – Dec. 2018 Jan. – Mar. 2019
34%
20%
11%
9%
4%
-14%
-23%
-26% -26%
-31%
1: Facebook, Amazon, Apple, Netflix, Google

122 Source: Yahoo Finance, macrotrends
www.statista.com/outlook/digital-markets
Statista Digital Market Outlook

Digital markets play a crucial role in the world economy but there are digitalization is the availability and price of internet. While the
vast differences in the maturity and extent of digital services available in broadband subscriptions per capita and the average connection speed
each region and even more each country. are rising constantly, a lot of people still lack access to internet or web-
enabled devices.
The European and North American countries are often highly digitalized,
but many of the Asian countries are currently catching up with The next chapter contains an overview over Statista’s eight digital
impressive speed. The fast adoption of digital media and digital markets, including market revenue sizes, user developments and current
payments in these countries leads to a different usage behavior, as trends. The information provided is part of the exclusive research of the
interacting online and being online gains an unprecedented “normality”. Digital Market Outlook, backed up with data from Statista’s Global
This in turn leads to different market structures, which have large Consumer Survey, Statista’s eCommerce Database and third party
impacts on the size and development of the digital markets. sources. Combined they provide an insight into the complex market
structures and deliver nuanced information on specific segments and
But the preconditions available for successful digitalization of markets
current changes in each market.
are differing heavily between countries. While European and North
American countries have internet penetration rates of up to 94%, Asia
and Africa lag far behind. Another aspect that influences the degree of
123
The availability of internet access differs massively
across the world
Internet penetration in 2018

6% 98% out of scope

Broadband subscriptions and connection speed are
continuously rising
Global fixed broadband subscriptions and average connection speed

Fixed broadband subscription per 100 capita Average connection speed in kbits/s
17,444
16,909
16,350
15,732
15,019
14,161
14.8 15.0 15.1
14.4 14.6
14.1
2018 2019 2020 2021 2022 2023

A quarter of the internet‘s 1.6bn websites is in English
Number of websites in millions Share of languages on the internet
1,767
1,630
English
25%
Other
34%
1,046
969
863
697 673
346 19%
4% Chinese
238 207 Indonesian/
172 4%
122 Malaysian
86
Portuguese 5%
8%
Arabic Spanish
2006 2008 2010 2012 2014 2016 2018
126 Source: Internet Live Stats, Internet World Stats, Nielsen, ITU, GfK
With rapidly rising number of websites, the number of
users per website is decreasing heavily
Number of internet users per website
140
78
63 61
21
18 18 16 16
15 13 11 9 10
8 7
4 4 3 4 4 2 3 2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
127 Source: Internet Live Stats, Internet World Stats, We Are Social, Statista Digital Market Outlook
Asian consumers spent far more time online than
European consumers
Time spent on the internet per day in hours in selected countries in 2017
9.6 9.5 9.2

8.9
8.5 8.5 8.3
7.4 7.2
6.5 6.5 6.5
5.9 5.9 5.9
5.6
5.1 4.9
4.2 4.1
2.9
United States
South Korea
South Africa
Philippines
Indonesia
Germany
Kingdom
Morocco
Australia
Malaysia
Thailand
Sweden
Canada
Mexico
Nigeria
United
Turkey
Russia
China
Japan
Brazil
India
128 Source: Globalwebindex

Chinese customers are most confident that
technologies can tackle the world’s problems
Share of respondents from selected countries who think that digital technology will improve the world
China 73%
Russia 50%
Italy 44%
France 43%
Average 42%
Spain 41%
Australia 40%
United States 38%
Germany 38%
United Kingdom 37%
Japan 22%
“Will digitization help solve the world's most critical challenges?" n=20,000
129 Source: Dengtsu Aegis Network 2018
www.statista.io/ecommerce
eCommerce
In the last decade, the eCommerce market has evolved from a simple is fueled by both the increasing purchasing power of the local population
counterpart of brick and mortar retail to a shopping ecosystem that and cross-border eCommerce. With revenues of US$501 billion in 2018,
involves multiple devices and store concepts. Many players from both the U.S. constitutes the second biggest eCommerce market, followed by
online and offline retail are moving to multi-channel strategies and are the UK with US$86 billion. Amazon, Walmart and Apple are the three
continuously reinventing the way we shop online. Expectations are biggest players in the United States. Amazon also dominates the most
growing rapidly as customers discover more convenience on all levels – relevant European eCommerce markets.
be it product customization, mobile-optimized search, quick checkout
Chinese key market players like Alibaba Group, JD and Tencent together
processes, or hassle-free delivery.
add to a comprehensive eCommerce ecosystem in China – and
The Statista Digital Market Outlook divides the eCommerce market into increasingly penetrate other promising Asian markets like Indonesia and
five product segments: Fashion, Electronics & Media, Toys, Hobby & DIY, India. The Chinese population is tech savvy and mobile-first, and Chinese
Food & Personal Care, and Furniture & Appliances. eCommerce giants are therefore constantly pushing technology forward.
They have diversified into literally every sphere that comes in touch with
In 2018, the global eCommerce market was worth US$1.8 trillion. China
online retail, from payments to logistics. Current developments in China
was the biggest eCommerce market worldwide, generating revenues of
will – to a large extent – define the next decade’s global eCommerce.
US$630 billion. China‘s eCommerce market has a high growth rate, which
130
The growth of cross-border eCommerce is a hot topic in the Western creating mobile-friendly shop interfaces or separate shopping apps. Its
markets, especially within the EU free trade zone. Geographic proximity major potential lies in AI applications, augmented reality, voice
and logistics make it possible for sellers to offer attractive shipping times eCommerce, and customer profiling.
and convenient returns to not only local buyers but to the whole EU
Both online-only players and traditional retailers are developing various
population. Cross-border eCommerce is also an opportunity for players
multi-/cross-channel strategies to reduce inconvenience and increase
from the mature UK, French or German markets to expand their
customer satisfaction throughout the customer journey. Parcel delivery
businesses to all corners of Europe.
boxes and exact delivery times for working people, drone deliveries of
We are witnessing two more major trends: mobile commerce and the time-sensitive products like medicines as well as same-day-delivery
almighty marketplaces. Marketplaces like eBay or Amazon have a firm services are only a few of many ambitious innovations and optimizations
grip on the market as they have long become primary product search in the area of product or service delivery.
engines. They enjoy a significant amount of recurring customers, who
come back for best prices, transparent quality, and easy returns.
We expect marketplaces to become the primary shopping destination

for almost all product categories. The exception will be context-rich
categories like luxury goods, interior design, and fashion, where stand-
alone shops will always have their share of the market.
Mobile eCommerce is now the fastest-growing segment as customers

enjoy shopping on-the-go and increasingly browse the shops and place
orders on their smartphones or tablets. Its scope is not limited to
k.striapunina@statista.com
131
The global eCommerce market is expected to reach
US$2.7 trillion in revenues by 2023
Global eCommerce revenue forecast in billion US$

Fashion Electronics & Media Toys, Hobby & DIY Furniture & Appliances Food & Personal Care
2,854.2
2,713.0
340.7
2,513.6 323.8
2,271.9 299.6
458.6
2,027.9 269.9 433.5
398.4
1,822.5 239.6
355.9
213.5 618.8
313.3 587.8
543.8
278.3
490.3
436.3
391.0 542.3 563.5
512.1
475.2
437.7
405.6
759.7 825.6 872.6

601.0 680.6
534.1
2018 2019 2020 2021 2022 2023

Clothing and Consumer Electronics are the biggest
categories within eCommerce
Global eCommerce revenue in billion US$ in 2018
534.1 405.6 391.0 278.3 213.5

Bags & Books, Movies, Music & Games DIY, Pets & Garden Home Appliances Food &
Accessories 79.7 Beverages
75.8
98.3 78.3
Shoes
Hobby & Stationary 95.3
108.1
Consumer Electronics
90.4 Furniture &
Clothing Homeware
Sports & Outdoor

Personal Care
91.3
307.3 199.9
346.3 Toys & Baby
118.3
133.6
Fashion Electronics & Media Toys, Hobby & DIY Furniture & Appliances Food &
Personal Care

China remains #1 in eCommerce and grew over 10%
in 2018
Top 5 eCommerce countries by market revenue in billion US$

2017 2018
568.0
China 11%
629.5
United 468.1
7%
States 501.0
United 82.2
5%
Kingdom 86.2
78.4
Japan 4%
81.6
66.7
Germany 5%
70.3

The U.S. eCommerce market is highly concentrated –
3 largest stores account for 20% of net sales
U.S. eCommerce net sales and market shares in 2018
Rank 21-30, Rank 31-40,

US$15.0bn, 3.3% US$11.0bn, 2.4%
Rank 71-
Rank 61-70, 80,
Rank 41-50, US$5.5bn, US$4.9bn,
US$8.3bn, 1.8% 1.2% 1.1%
Rank 91-
Rank 81-90, 100,
Rank 11-20, Rank 51-60, US$4.4bn, US$4.2bn,
US$26.2bn, 5.8% US$6.5bn, 1.4% 1% 0.9%
Long tail (Rank 101+), US$ 240.8bn, 53%
More information on
135 Source: Statista ecommerceDB
The payment methods offered by European online
stores mostly meet customer needs
Payment methods offered by online stores and preferred payment methods of online shoppers 1
Offerd by stores Preferred payment method
100% 88% 99% 95% 99%

Debit / credit card
48% 18% 54% 34% 41%
82% 93% 79% 92% 87%

Paypal or similar
42% 34% 36% 48% 42%
12% 65% 36% 66% 57%

Direct payment
4% 27% 4% 8% 3%
4% 89% 1% 4% 9%
Invoice
2% 16% 3% 1% 1%
1% 46% 5% 63% 42%

Cash on delivery
3% 2% 2% 10% 11%
1: Consumers aged 15 to 79 who have shopped online in last 12 months More information on
136 Source: postnord, Statista ecommerceDB
Amazon is the #1 online shop in the most relevant
European eCommerce markets
Top 5 online shops by revenue in million US$ in 2018
6,555.0 11,077.8 2,455.8
4,001.9 3,555.4 2,331.9
3,005.3 1,646.0 2,188.7
2,632.3 mediamarkt.de 959.6 1,481.8
2,010.4 881.2 921.7
Note: eCommerce net sales generated via the respective country domain only More information on
137 Source: Statista ecommerceDB
Next to large all-encompassing platforms, there are
many product-specific eCommerce players
Selected key players in the eCommerce market
Marketplaces Online retailers Direct sellers
United States
China
Europe

Consumer Electronics, clothing, shoes and media
products are mainly searched for and bought online
Share of U.S. consumers who primarily search for / purchase a product online in %
Share of U.S. consumers who ordered these items online in the past 12 months
70
65
60
55
Books, Movies,
Purchased primarily online
50
Music & Games
45 Clothing
40
35 Sports & Shoes Consumer
30 Bags & Outdoor
Cosmetics & Electronics
25 Accessories
Body Care
20 Toys & Household
Baby Products Furniture & Appliances
15 DIY, Garden Household Goods
10 Stationery & & Pets
Hobby Supplies Food & Drinks
5
0
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70
Searched for primarily online
“For which of these products do you mostly look for information online?”; "Which of these products do you mostly buy / order online?“; "Which of
these items have you bought online in the past 12 months?“; Multi pick; n=4,044
Alibaba’s sales on Singles’ Day easily beat Thanksgiving
weekend record sales
U.S. online retail sales on Thanksgiving weekend and Alibaba‘s GMV1 on Singles‘ Day in billion US$
27%
30.8
14%
24.2 24.3
21.2
2017 2018 2017 2018
Thanksgiving weekend Singles’ Day (Alibaba)
1: GMV = Gross merchandise value

140 Source: Alibaba, Adobe Digital Insights 2019
The U.S. has the highest mobile and voice shopping
rates
Devices used for online shopping in 2018

Smartphone Desktop PC Tablet Smart speakers (e.g. Amazon Echo)
60%
48%
44% 45%
40%
39% 38%
37%
27%
10%
5%
2%
United States United Kingdom Germany
“Which of the following devices have you used for online shopping in the past 12 months?”; Multi pick; U.S.: n=,4,044, UK: n= 2,011,
DE: n=2,062
To U.S. consumers, brands matter most when it
comes to smartphones
Brand awareness in the U.S.
Smartphone 63%
Clothing & shoes 53%
TV & HiFi 48%
Cars, motorcycles, bicycles 47%
Household appliances 44%
Food & non-alcoholic drinks 42%
Detergents & cleaning products 42%
Cosmetics & body care 39%
Alcoholic drinks 36%
Bags & accessories 31%
Furniture & household goods 25%
Toys & baby products 18%
"In which of these categories do you pay particular attention to brands?”; Multi pick; n=10,150
Over one third of Chinese online shoppers buying
consumer electronics are aged between 25 and 34
Demographics of users buying consumer electronics Income

online in China
Medium income
31%
High income
45%
Low income
25%
Female
39%
Male Age
39%
61%
28%
15% 15%
4%
18–24 years 25–34 years 35–44 years 45–54 years 55–64 years
"Which of these items have you bought online in the past 12 months?"; Multi pick; n=2,081
www.statista.io/eservices
eServices
The ubiquitous use of the internet and mobile phones has triggered a taken place to bundle strength. Even established players have to face
flourishing eServices business, which is still on the rise. this: German Delivery Hero, for example, was recently bought by Dutch
Takeaway.com.
Since Pizza Hut launched the first-ever pizza online ordering service back
in 1994, online food delivery has become a billion-dollar business. Food The eServices market is divided into four segments: Online Food
delivery platforms have aggregated menus of hundreds of thousands of Delivery, Event Tickets, Fitness, and Dating Services. The eServices
restaurants in easy-to-access apps in nearly every city across the world. market reached a revenue of US$168 billion in 2018, with Online Food
Delivery being the biggest segment. Even though the U.S. was still the
Recently, the incorporation of ride-sharing companies has pushed the
biggest market in 2018 with US$51 billion, China will take the lead in
market to even bigger growth. In the U.S., UberEATS is the fastest-
revenue by 2023 with US$77 billion. With a revenue of US$34 billion in
growing meal delivery service, catching up with industry leader GrubHub.
2018, the eServices market in Europe was smaller compared to China
New concepts are emerging everywhere, like Deliveroo’s container
and the U.S. The leading country in Europe with respect to revenue is the
kitchens or UberEATS virtual restaurants. Those concepts are combined
United Kingdom.
with new delivery methods like self-driving cars, drones, and robots.
Nevertheless, the market is witnessing fierce competition. A large

number of start-ups have already gone bankrupt. Many acquisitions have
144
Event Tickets are the second largest eServices segment. Owing to issues implementation will enable more interactions between wearables and
with widespread fake and duplicate tickets, high prices and fees, the other smart devices.
industry has fallen into disrepute. But driven by rapid advancements in
Dating Service will see a more widespread application of Artificial
technology, the industry is undergoing a fast transformation that is
Intelligence. Whilst the majority of current AI technology focuses on the
benefitting customers.
initial matching stage, AI could in the future help to support relationships
Start-ups like GUTS or Aventus, for example, have been involved in a in a far more therapeutic context. Amazon’s Alexa and Google Home
number of new solutions connected to Blockchain technology, which will could be able to diagnose relationships by taking into account vocal
lead the way with new protocols for smart ticketing. The UEFA has patterns. AI coaching could extend from profile recommendations to
already used a new ticketing system based on Blockchain technology for relationship and life coaching. Moreover, home devices could build
UEFA Super Cup matches. The use of smart algorithms such as machine- perfect dating profiles, e.g. by scanning and adding fitness tracking data,
learning tools can help these services to become more individualized. knowing that users who work out regularly tend to receive more
One main trend are wearables with smart assistants, which offer a high messages.
level of AI and are able to learn certain patterns and preferences of their
users.
As for the Fitness segment, in the future apps and trackers will be able to
make recommendations regarding the user’s health and predict health
conditions. This might open up possibilities for new business models in
several areas, such as the insurance sector. The future of wearable
devices will see many connections between apparel and technology,
resulting in more sophisticated gadgets. Solid data networks and 5G c.blumtritt@statista.com
145
Online Food Delivery is the most important segment
in eServices
Global eServices revenue forecast in billion US$

Online Food Delivery Event Tickets Fitness Dating Services
134.5
126.6
117.1
106.2 105.4
99.2
94.4
91.5
82.2 82.6
73.4
65.2
18.0 19.0 19.8 20.5

15.7 16.9
5.0 5.3 5.7 5.9 6.1 6.3
2018 2019 2020 2021 2022 2023
Note: Revenue figures refer to Gross Transactional/Merchandise Value (GTV/GTM)

The Restaurant-to-Consumer segment dominates the
global eServices market in terms of revenue
Global eServices revenue in billion US$ in 2018
Casual
Platform-to-Consumer Delivery Cinema Tickets Apps Dating
2.0
11.8 0.9
31.0
Sport Events
Online Dating
23.0 1.6
Restaurant-to-Consumer Delivery
Wearables
Music Events 13.7
51.2 Matchmaking
30.4 2.5
Online Food Delivery Event Tickets Fitness Dating

Services

The eServices market grew in all top 5 countries by
more than 8%
Top 5 eServices countries by market revenue in billion US$

2017 2018
47.8
United States 8%
51.4
29.0
China 18%
34.2
7.4
India 20%
8.9
7.1
United Kingdom 11%
7.9
5.0
Germany 11%
5.6

In all eServices segments, the variety of different
service and business models is high and changing fast
Selected key players in the eServices market
Event Tickets Fitness Dating Services Food Delivery
Start-ups1
Established
players
1: Founded in or after 2008

Most Online Food Delivery players had more than 5
funding rounds
Overview of selected online food delivery players
Funding in Funding Revenue in

Company Segment Headquarter Mainly covered regions
billion US$ rounds billion US$ 2017
Deliveroo Platform-to-Consumer United Kingdom Europe 0.86 9 0.36
Delivery Hero1 Restaurant-to-Consumer Germany Europe 2.58 15 0.602
Domino’s Pizza Restaurant-to-Consumer United States United States, Europe, China - - 2.79
Ele.me3 Platform-to-Consumer China China 3.34 8 -
Postmates Platform-to-Consumer United States United States 0.68 11 0.254
Zume Pizza Restaurant-to-Consumer United States United States 0.42 7 -
GrubHub Restaurant-to-Consumer United States United States, Europe 0.28 7 0.68
Just Eat Restaurant-to-Consumer United Kingdom Europe 0.07 4 0.735
Takeaway.com Restaurant-to-Consumer Netherlands Europe 0.77 3 0.16
UberEats Platform-to-Consumer United States United States, Europe 24.206 22 -
Glovo Platform-to-Consumer Spain Europe 0.17 6 -
1: German operations bought by Takeaway.com in 2018 2: EUR/USD (2017) = 0.90554 3: Ele.me was bought by Alibaba in 2018 4: Estimated
5: GBP/USD (2017) = 0.75014 6: Total funding amount of Uber
150 Source: Company information, Crunchbase
The Fitness market is shaped by start-ups as well as
multinational apparel and tech companies
Revenue of selected key players in fitness apps and wearables
Revenue 2016 Revenue 2017

Company Products Headquarter
in billion US$ in billion US$
Adidas miCoach FIT SMART, Heart Rate Monitor, Runtastic Europe 23.1 23.41
Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit Alta,
Fitbit United States 2.2 1.6
Fitbit Charge HR
Garmin Vivofit 3, Garmin Vivoactive, Garmin Vivosmart,
Garmin Europe 3.0 3.1
Garmin Forerunner
TalkBand B3, TalkBand B3 Lite, Band 2, Color Band A2, Fit,
Huawai China 75.1 92.5
Watch 2
Misfit Wearables2 Misfit Ray, Misfit Shine 2, Misfit Flash, Misfit Speedo Shine United States 3.02 2.83
Moov Moov, Moov Now United States - -
Nike Nike+ FuelBand, Nike+ FuelBand SE, Nike+ Running App United States 32.4 34.4
Under Armour Band, MapMyFitness, MyFitnessPal,

Under Armour United States 4.8 5.0
Endomondo
Xiaomi Mi Band, Mi Band Pulse, Mi Fit China - 18.0
1: USD/EUR (2017) = 0.90554 2: Acquired by Fossil Group 3: Revenue of Fossil Group

151 Source: Company information
While the UK has a clear market leader with JUST EAT,
competition in other countries is more diverse
Online purchase of food delivery products by provider in the past 12 months
34% 68% 65%

78%
34% 44% 29%

68%
1 2
31% 44% 31% 29%
25% 33% 8% 16%
22% 20% 5% 9%
1: Baidu delivery is now a subbrand of Ele.me 2: In February 2018, hungryhouse became part of Just Eat
“Which of these online providers of food delivery have you used in the past 12 months?” Multi Pick; U.S.: n=1,461; China: n=1,458; UK: n=766;
Germany: n=750 respondents who used meal orders online in the past 12 months
Ticketmaster is the market leader in online ticketing in
the U.S.
Websites and apps used to purchase event tickets in the U.S.
61%
36%
20%
17%
16%
15%
12%
10%
10%
8%
Other 14%
“Which of these online providers have you bought event tickets from (website or app) in the past 12 months?”; Multi pick; n=871 respondents
who bought event tickets online
Finnish consumers have the widest adoption of online
event ticket purchasing with 37% penetration rate
Innovation diffusion curve for online event ticket services in 2018

37% Diffusion
34%
(accumulated users)
30%
28%
24%
21%
19%
18%
Innovators 2.5% Early adopters 16.0% Early majority 50.0% Late majority 84.0% Laggards 100.0%
The diffusion of innovations graph shows successive groups of consumers adopting Event Tickets (for this the graph above shows the penetration rate
of selected countries). Innovations in general are not adopted by all individuals at the same time. Instead, they tend to adopt in a time sequence, and
can be classified into adopter categories based on how long it takes until they begin using the service. Diffusion is considered to be the rate and volume
at which innovations spread among their users (an adoption rate of 100% is theoretically possible but not realistic). Considering the high adoption rates,
the Event Tickets segment is likely to grow slower in the next years, especially in the UK and the U.S. China’s big market still holds great potential.

Nearly 50% of paying Online Dating users in the U.S.
use Badoo
Usage of Online Dating by provider (paying customer) in the past 12 months
49% 43% 34% 36%
34% 34% 24% 35%
31% 32% 23% 34%
30% 25% 23% 33%
28% Qingchifan 24% 18% 25%
“Which of these online dating providers (website or app) have you used as a paying customer in the past 12 months?” Multi Pick; U.S.: n=580;
China: n=350; UK: n=127; Germany: n=79 respondents who used and spend money on online dating in the past 12 months
AshleyMadison, C-Date and Firstaffair are typical
Casual Dating portals for a broader audience
Dating Portals and Apps segmentation

Headquarter: Europe U.S. China Out of scope
Niche/casual Niche/serious
BDSMSingles
WooPlus ChristianMingle
Whiplr
Grindr
Audience / coverage
Jdate
Blued
OurTime
VictoriaMilan Elite Partner
Coffee Meets Bagel Chemistry Baihe

Elite Singles
Ashley Madison Meetic eDarling
AdultFriendFinder Jiayuan
Lovoo Neu LoveScout24
eHarmony
OkCupid
Firstaffair Bumble
Parship
C-date
Match Plenty of Fish
TanTan
Mass/casual Tinder Badoo Zoosk Mass/serious
Type of intended relationship

Online food delivery users in India are mostly young
males
Demographics of people using online food delivery in Income

India
Medium income
35%
High income
Low income 39%
26%
Male
Age
48%
52%
45%
Female 33%
21%
1% 0%
"Which of these online services (website or app) have you used in the past 12 months?"; Multi pick; n=1,047
Event ticket users in Finland are predominantly
females aged between 25 and 44 with high income
Demographics of people booking event tickets online in Income

Finland
Medium income
29%
High income
45%
Low income
26%
Male
47%
Age
53%
25% 24%
20%
Female
16% 16%
"Which of these online services (website or app) have you used in the past 12 months?"; Multi pick; n=1,044
www.statista.io/etravel
eTravel
The mobility and travel markets have been heavily disrupted by digital field of application for self-driving cars, which are a highly promising
business models. And this trend is far from over: Changed travel means of transportation themselves. In the future, the cost of travel per
behavior, autonomous cars and similar developments interfere with mile will probably be lower in a driverless car than in a private car, even
processes both in commercial and personal transportation. for long trips in rural areas. We also expect self-driving cars to increase
road safety, reduce traffic accidents, free up space in cities and reduce
In the Statista Digital Market Outlook, the eTravel market consists of two
traffic congestion.
segments: Online Mobility Services and Online Travel Booking. With
revenues of US$217 billion in 2018, the United States took the leading Many large automakers are investing in a vast number of mobility start-
role within the eTravel market. Although the Chinese market is smaller, ups in different fields. Mercedes-Benz, for example, has invested in car
with revenues of US$157 billion, it is the fastest-growing region and we sharing (Car2go), ride hailing (myTaxi), and multi-modal platforms
expect it to overtake Europe in some segments by 2023. (moovel). Not surprisingly, many automakers like General Motors, Ford,
Volvo, Mercedes-Benz and Tesla are also developing driverless cars and
The shared mobility concept of ride hailing is a much-discussed topic at
cooperate with ride-hailing companies to test them.
the moment because of its possible implications for the traditional taxi
business and because of past security scandals. This type of mobility Another hot trend is the growth of the travel market in developing
service is growing significantly. It probably constitutes the most lucrative countries such as India and China. With more people becoming affluent
159
enough to travel, a new generation of local start-ups are entering the personalization is the next step to stay close to customers and motivate
market, threatening established players. Examples are mobility service them to stay with the company.
provider Grab in South East Asia or MakeMyTrip in India.
We expect eTravel booking websites and apps to implement AI in order
One major trend within online travel bookings is the shift towards mobile to aid customers before, during, and after the booking process, for
booking and mobile devices: The overall amount of mobile searches and example via chatbots and virtual assistants. Chatbots can provide
bookings is increasing at a fast pace. In particular, last-minute and same- automated customer service on a travel website or operate through a
day bookings are often made on mobile devices. Hence, hotels and messaging platform to converse with travelers and assist with the
online travel agencies are investing heavily in mobile technologies to booking. Users tell the bot about their travel plans, the bot asks
expand their services and products within this area. While Europe is questions and eventually presents five suitable hotel options. At the
lagging behind in mobile bookings, American and especially Asian same time, AI can present travel suggestions based on previous travel
customers are booking via mobile devices much more frequently. The decisions, thus making it easier for customers to find a fitting travel
showpiece of this trend is Hotel Tonight, a smartphone-only same-day package.
hotel booking app.
Another major development in travel bookings is the growing influence

of personalization. Many customers feel overwhelmed by the sheer
amount of travel destinations and packages to choose from. Travel
companies are able to counteract this situation by analyzing the
customers’ previous journeys and overall travel behavior and presenting
personalized travel recommendations that meet the customers’ needs.
While segmentation is already existent in the travel industry, g.noeldeke@statista.com
160
The global eTravel revenue is expected to grow to over
US$1.23 trillion by 2023
Global eTravel revenue forecast in billion US$

Online Mobility Services Online Travel Booking
1,228.4
1,171.4
1,104.8
1,028.7
944.9
539.3
857.0 516.3
489.3
458.5
424.7
389.4
655.1 689.1
570.2 615.5
467.6 520.2
2018 2019 2020 2021 2022 2023

Online flight bookings is by far the largest segment in
the global eTravel market
Global eTravel revenue in billion US$ in 2018
467.6 389.4
Car Rentals 25.7 Vacation Rentals
Trains & Buses 53.0
44.0
Ride Hailing Hotels

66.4
Flights 157.7
Package Holiday
331.5
178.7
Online Mobility Services Online Travel Booking

The Chinese eTravel market grew by 17%
Top 5 eTravel countries by market revenue in billion US$

2017 2018
203.5
United States 7%
217.1
134.2
China 17%
156.6
39.3
United Kingdom 8%
42.3
33.6
Japan 6%
35.7
30.6
Germany 6%
32.4

The eTravel market experienced major shifts because
of start-ups such as Airbnb or Uber
Selected key players in the eTravel market
Online Travel Booking Online Mobility Services
Start-ups1
Established players
1: Founded in or after 2008

Airbnb is the only top western eTravel player in China
Top 6 online providers to book accommodations with in 2018
40% 67% 56% 55%
36% 41% 21% 30%
29% 39% 19% 25%
28% 22% 18% 24%
22% 13% 16% 23%
22% 13% 8% 15%
"From which of these online providers have you booked an accommodation - hotel or private accommodation - in the past 12 months (website
or app)?“; Multi Pick; n=10,000 respondents who booked hotels, vacation apartments or houses online in the past 12 months
Shared mobility options range from rentals to shared
ride hailing
Distribution of mobility services by shared usage and flexibility
Shared / less flexible Shared / highly flexible

Shared ride hailing Ride hailing
Matching of ride hailers Professional drivers offer shared rides
▪ Individuals are matched in real time to ▪ Individuals or predefined groups travel
Degree of shared usage
share rides with others on a similar route together

▪ Professional and part-time drivers ▪ Professional and part-time drivers
▪ Access via smartphone ▪ Access via smartphone
Car rentals Car sharing

Station-based car rentals One-to-many sharing
▪ Pickup and return to the same station ▪ Free-floating car sharing – car pickup and
return anywhere in a predefined area
▪ Charged by day / hour
▪ Charged by minute
▪ Access via smartphone
Individual / less flexible Individual / highly flexible
Flexibility of usage
Note: Companies are not exhaustive and serve only as examples

Social media channels are used in many instances
throughout the trip, both for research and sharing
Usage of social media throughout a holiday
Research and Booking tours Posting Review the

inspiration Find the best pictures of holiday online
Find inspiration tours and activities Writing of
on social media activity Sharing of reviews on web
e.g. through providers via pictures, videos portals, OTA
your peers’ rating and or stories on websites, review
holiday pictures review apps social media websites, or
blogs
At home On holiday Back home
Writing
reviews for Posting throw-
restaurants back pictures
Booking rooms and bars Months after
and transport Eating out Creating new the trip:
Based on online Find restaurants peer-to-peer posting
reviews, the and bars based content by pictures on
recommendation on a friend’s recommending social media to
of peers, and recommendation and rating remember the
blog posts or review apps localities experience

Asian consumers are mobile-first, while many
European consumers still use their desktops
Device usage to access travel sites in selected countries

Mobile-only Multi-platform Desktop-only
Indonesia 81% 6% 13%
India 76% 10% 14%
China 61% 26% 14%
Brazil 57% 18% 26%
United States 52% 36% 12%
Malaysia 49% 26% 25%
United Kingdom 48% 37% 16%
Germany 35% 33% 31%
France 34% 37% 30%
Note: Segments may not add to 100% due to rounding

168 Source: comScore
Expedia Group and Booking Holdings dominate the
global Online Travel Booking market
Revenue and EBITDA for selected regional players in billion US$ in 2018
14.5
11.2
5.7
2.0 4.5
Revenue EBITDA
Revenue EBITDA 0.5
Revenue EBITDA
0.7
-0.2
Revenue EBITDA
0.5 0.1
Revenue EBITDA
Note: Companies are not exhaustive and serve only as examples

169 Sources: medium.com, company information
Ride-sharing users in India are very young but still
have a medium to high income
Demographics of people using ride-hailing services in Income

India
Medium income
33%
High income
Low income 40%
27%
Male
Age
48%
52%
48%
Female 35%
15%
2% 0%
"Which of these services have you booked online (website or app) in the past 12 months?“; Multi pick; n=1,047
www.statista.io/digitalmedia
Digital Media
The emergence of MP3 players and online file-sharing services like billion in 2018. The continuing popularity of subscription-based services
Napster has not only caused a big disruption of the music industry’s will lead to a steady growth up to 2023, whereas the growth of Pay-per-
whole business concept. It has also fundamentally changed the way in View and Video Download services will decrease massively in the next
which music is sold, distributed, and consumed nowadays. While Napster couple of years.
is just an exemplary starting point for the music industry’s transition,
The next smaller segment is ePublishing, which is expected to grow to
developments like eReaders, smartphones, and tablets are further
US$28 billion by 2023. This growth is mainly driven by emerging markets
symbols of the digital revolution of traditional media.
like China, where eBook prices are substantially lower.
The Digital Media market in the Statista Digital Market Outlook is
Digital Music was the smallest segment in 2018 with a revenue of US$13
segmented into Video Games, Video-on-Demand, ePublishing, and
billion. The market is utterly dependent on Music Streaming. This is due
Digital Music. Video Games were by far the biggest market in 2018 with a
to the fact that Music Downloads are one of the very few shrinking
global revenue of US$77 billion, which represents a share of 55% of the
markets in the digital economy, which underlines how mature the entire
whole Digital Media market. The Video Games market benefits highly
Digital Media market has become.
from a shift from desktop computers to mobile devices: Every third US
dollar in Digital Media is generated by Mobile Games. Video-on-Demand
is the second biggest digital market with a global revenue of US$31
171
The media business had to endure difficult times when illegal distribution increased prices again, it announced another big boost in streaming
and downloads of digital content became common among users. This subscribers at the beginning of 2019. In the gaming business, big
development particularly threatened the music and video business and companies such as Nintendo participate in the huge and fast-growing
caused sales to decline. Faced with changing customer behavior and field of Mobile Games by releasing their own games on third-party
their evolving demands, companies thus had to find new ways of platforms or by cooperating with franchise partners.
monetizing their content.
Another trend is live content. Periscope, Facebook Live, Instagram Live,
Customer requirements have become clear over time: easy access to a live.ly, Snapchat Live Stories, YouTube Live, Alibaba Tmall, Sina Weibo
wide range of media content at any time, in any place, and at a good Miaopai, Yizhibo – nearly every social media network offers the possibility
price. This need triggered the birth of online streaming and lending, a to stream live videos in real time. Besides the benefit for consumers to
trend which can especially be observed in the rising popularity of music share moments in life with friends and family, live streaming also opens
and video streaming as well as mobile gaming. Companies such as up new commercial scenarios for manufacturers to advertise their
Amazon, Apple, Netflix or Spotify have successfully responded to these products.
needs and provide huge content libraries and convenient purchasing
models for their customers.
Competition remains fierce in the Digital Media market and companies

have to constantly reassess their business strategy to be ahead of their
competitors. Netflix and Amazon, for example, are increasingly investing
in the production of their own exclusive content to decrease their
dependency on production companies and to increase their competitive
advantage. This strategy seems to pay off: Although Netflix has recently m.daniels@statista.com
172
The global Digital Media market is expected to reach a
value of US$157 billion by 2023
Global Digital Media revenue forecast in billion US$

Video Games Video-on-Demand ePublishing Digital Music
173.0
168.9
164.0
157.8 14.5
14.2
150.0 13.9
141.7 13.5
13.2 27.8 29.1
12.7 26.3
24.6
22.8
21.1
37.1 37.4
35.2 36.5
32.9
30.5
87.3 89.9 92.1

77.3 81.1 84.4
2018 2019 2020 2021 2022 2023

The Mobile Games segment leads Digital Media sales
Global Digital Media revenue in billion US$ in 2018
77.3 30.5 21.1 12.7

Mobile Games Streaming eBooks Streaming
51.1 13.2
23.0
10.5
ePapers
Download Games
13.9 5.0
Downloads
3.7
Online Games Downloads
Pay-per-View eMagazines 2.3
12.3 3.9 2.9

China and Germany show the highest growth in Digital
Media revenues
Top 5 Digital Media countries by market revenue in billion US$

2017 2018
41.5
United States 7%
44.3
24.3
China 9%
26.5
14.9
Japan 5%
15.7
6.0
United Kingdom 6%
6.4
3.8
Germany 8%
4.2

The Digital Media landscape is split into content
specialists and those with a diversified portfolio
Selected key players in the Digital Media market
Pure
Players
Diversified
Players

Amazon is the preferred online video games provider
Share of respondents who purchased online video games of selected providers
55% 44% 44%
40% 35% 28%
39% 28% 11%
"Where have you spent money on online video games in the past 12 months (downloads, in-app purchases, subscriptions)?“; Multi Pick; U.S.:
n=1,814; Germany: n=453; UK: n=600 respondents who play video games regularly and spent money on downloads, in-app purchases and
subscriptions in the past 12 months
All Video-on-Demand services still lack customers over
49, while they are popular among young people
Share of respondents who purchased video-on-demand services of selected providers by age

18-29 years 30-49 years 50-64 years All
United States Germany
75%
66%
60% 61% 60%
56%
54%
48% 47% 47%
43%
35% 34%
29%
27% 26% 27%
18% 18%
13% 13% 15%
11% 10%
"Which of these video on demand providers have you used in the past 12 months as a paying customer?“; Multi Pick; U.S.: n=2,222; Germany:
n=708 respondents who spent money on digital video content in the past 12 months
The willingness to pay for content is highest in China,
Brazil, and India, with Germany and UK lagging behind
Share of respondents who purchase video-on-demand products
60%
54%
52%
50% 49%
35% 34%
China United States India South Africa Brazil United Kingdom Germany
Note: contains downloads and subscriptions; "Have you spent money on digital video content in the past 12 months?“; Multi pick; n=13,406
respondents
Streaming services beat (paid) TV in customer
satisfaction
Share of viewers who rate the service as excellent/good in terms of …

Ad-free streaming subscription services Network TV Cable / Satellite / Telco TV
91%
89% 88%
87% 87%
79%
76% 76% 77%
73% 72%
71%
68%
64%
59%
Quality of content Variety of content Availability of unique content User experience Value
n=1,200 respondents in the U.S.; >= 18 years

180 Source: Interactive Advertising Bureau
Amazon tops the list of digital music services
Share of U.S. respondents who use digital music services of selected providers
49%
43%
41%
36%
29%
24%
12%
12%
7%
4%
"Which of these providers have you bought music downloads or streaming services from in the past 12 months?“; Multi Pick; U.S.: n=2,328
respondents who spent money on digital music content in the past 12 months
In Spotify‘s home country, Sweden, women are more
likely to spend money on digital music
Demographics of people paying for digital music in Income

Sweden
Medium income
31%
High income
Low income 39%
30%
Male
46% Age
54%
32%
Female 22%
19% 18%
8%
"Purchase of digital music (past 12 months)“; n=1,039

www.statista.io/fintech
FinTech
FinTech, a combination of financial services and technology, has been (Alternative Financing), as well as Alternative Lending for private business
rapidly evolving in the last decade and has already to some extent purposes. Digital Payments are by far the largest segment in the
reinvented the financial services landscape and the way people spend, consumer-oriented FinTech space. The global Digital Payments
invest, and lend money. With more than 50% of the global adult transaction value was US$3.6 trillion in 2018 and is expected to reach
population using the internet to pay bills or shop online, FinTech is not US$6.7 trillion by 2023, following a projected annual growth rate of 13%.
an emerging market anymore but an established industry with huge While China and the U.S. clearly lead the market with transaction values
potential yet to be unlocked. The most important driving forces for the of US$1.3 trillion and US$878 billion in 2018 respectively, Europe is
adoption of any FinTech innovation are minimal entrance barriers for struggling to catch up.
both consumers and providers, comprehensive information, and intuitive
There is an evolving payments landscape in Europe, but market
handling. Intuitive handling is especially important for people who are
dynamics and the penetration of digital payments are not comparable to
not tech savvy. Last but not least, favorable regulation and legislation are
China or the U.S. Different cultural mindsets and the overall state of an
also important drivers.
economy also play a significant role in the speed of innovation: While
The FinTech market in the Statista Digital Market Outlook includes Digital cash is still king in Germany, mobile payments in China (e.g. Alipay and
Payments, Personal Finance services, such as Robo-Advisors and cross- WeChatPay) have already practically replaced cash as the most
border P2P money transfer, financing platforms for small businesses frequently used way of payment in everyday life.
183
Personal Finance, is currently the second biggest FinTech segment and business owners are starting to recognize its benefits.
accounted for US$632 billion in transactions in 2018. Traditional banks’
The most frequently used buzzword within FinTech is probably
wealth management services often fail to keep up with middle-class
Blockchain. Blockchain is a distributed ledger technology that
consumers’ expectations in terms of both performance and
autonomously records peer-to-peer transactions across decentralized
technological fanciness. This has led to the emergence of a broad
computers without a central authority. Information is written in blocks
spectrum of digital investment services in North America and Europe.
that are visible to everyone. The Blockchain grows with the number of
The current value of assets under management of those services is
transactions and information stored in it. Blockchain participants, also
estimated at US$543 billion in 2018.
called “miners”, provide computing power to append new blocks and get
Alternative Lending has not lived up to the industry’s expectations and an incentive for their work referring to a public Blockchain. This makes
has suffered some reputational damage. Nevertheless, this segment still fraudulent activities almost impossible, because of the immense number
accounted for US$198 billion in global transaction value in 2018. of equivalent replications.
Borrowing money from an online community instead of turning to family
or friends is an attractive option in growing economies, where traditional
bank loans are less accessible. The alternative lending sector in China
has grown exponentially in the past several years, but has later received
some scrutiny from Chinese authorities because of several major fraud
incidents.
Last but not the least, Alternative Financing is currently the smallest
segment with a global transaction value of US$9 billion in 2018, but it
shows a promising growth up to 2023 as many entrepreneurs and small k.striapunina@statista.com
184
The global Digital Payments market volume will grow
to over US$6.7 trillion by 2023
Forecast of global FinTech transaction value in billion US$

Digital Payments Personal Finance Alternative Lending Alternative Financing
6,686.7
6,072.0
5,429.0
4,772.3
4,145.0
3,598.2
2,752.2
2,412.3
2,022.7
1,578.1
1,092.5
631.5
243.1 287.9 324.2 349.4 365.2
197.6
9.1 11.7 14.3 16.7 18.6 20.0
2018 2019 2020 2021 2022 2023

Digital Commerce dominates the FinTech market
Global FinTech transaction value in billion US$ in 2018
3,598.2 631.5 197.6

Digital Commerce Robo- C2B/
Advisors B2B
142.0
3,068.5 543.2
C2C
55.6
Mobile POS Payments P2P Money Transfers
529.7 88.3
Digital Payments Personal Finance Alternative

Lending

Digital Payments in China grew by 22% in one year
from 2017 to 2018
Top 5 FinTech countries by Digital Payments transaction value in billion US$

2017 2018
1,033.5
China 22%
1,264.4
United 810.7
8%
States 878.2
148.1
Japan 5%
155.3
United 139.4
7%
Kingdom 149.7
104.1
Germany 6%
110.5

The FinTech landscape is highly competitive with a lot
of different players
Selected key players in the FinTech market
Digital Payment Personal Finance Alternative Lending Alternative Financing
Digital Commerce Robo-Advisors CrowdLending CrowdFunding
Mobile POS Payments P2P Moneytransfers P2P Marketplace Lending CrowdInvesting

28% of U.S. consumers would like to pay via mobile at
all times
Relevance of mobile payment methods in the U.S.
All the time 28%
Food and drinks in restaurants 17%
Everyday purchases (e.g. food) 16%
Food and drinks in bars and cafés 16%
Minor purchases (e.g. decoration items) 14%
Admission tickets 13%
Public transportation tickets 12%
Travel booking 11%
Major purchases (e.g. washing machine) 8%
Don’t know 8%
Other 2%
Don’t want to pay with my smartphone at all 30%
"In what situations would you like to be able to pay with your smartphone (without debit / credit card or cash)?“; Multi pick; n=4,099
Apple Pay is the most popular mobile payment
method in the U.S., followed by Android Pay
Share of respondents who use selected mobile payment methods in the U.S.
51%
44%
39%
29%
24%
22%
15%
11%
"Which of these services have you used in the past 12 months to pay in stores, restaurants or other points of sale with your smartphone?”; Multi
pick; Base: respondents who used mobile payment in restaurants, stores and other points of sale in the past 12 months, n=818 respondents
Interest in Robo-Advisors is highest in Colombia, Brazil
and China
Respondents who could imagine consulting a digital program (RoboAdvisor) for personal finance advice
Colombia 23%
Brazil 21%
China 20%
India 19%
Mexico 18%
South Africa 18%
Spain 17%
United States 17%
Turkey 15%
Argentina 15%
Indonesia 13%
Germany 12%
Canada 12%
United Kingdom 11%
Australia 11%
South Korea 11%
Poland 10%
Russian Federation 10%
Nigeria 10%
Sweden 9%
Morocco 9%
Austria 7%
France 7%
Finland 6%
Netherlands 6%
Italy 5%
Japan 2%
“Which of these statements apply to you? / I could imagine consulting a digital program (RoboAdvisor) for advice on finance issues”; Multi pick;
n=40,600
InsurTech: Motor insurance is the main driver for
growth in the online insurance sector in the U.S.
Number of policies sold online in the U.S. in millions per year

Motor Life Property Health Liability
214
4
191 28
4
168 24 21
3
146 20 19
3 24
126 16 17 23
2
108 13 16 21
2 14
10 20
12 19
17
137
121
106
91
78
67
2018 2019 2020 2021 2022 2023

In the UK, a higher share of people with high income
use mobile POS payments
Demographics of people using mobile POS in the UK Income
Medium income High income

23% 57%
Low income
20%
Female
42%
Male
Age
34%
58%
24%
22%
14%
6%
"How have you paid in stores, restaurants and other points of sale in the past 12 months?“; Multi pick; n=2,031
www.statista.io/digitaladvertising
Digital Advertising
Worldwide spending on digital advertising outreached TV ad spending location-based factors, website and audience types, or remarketing
for the first time in 2017. Considering how great a role television used to based on user behavior.
play for generations of media consumers, this is quite a revolutionary
Social networks usually work with newsfeeds, where user-specific
development. This shows how important digital advertising has become.
content and shared information are shown. This presents an ideal
The Statista Digital Market Outlook segments the Digital Advertising advertising environment that offers numerous opportunities for
market according to the environment where the ads are played. In-page personalized user targeting. But it also makes advertisers vulnerable to
ads are categorized as Banner Ads, while in-stream ads – be it videos or changes in algorithms, as can now be seen in Facebook’s shrinking traffic
text overlays – are considered Video Advertising. Together with Social after its recent update. The global Social Media Advertising market size
Media Advertising, Search Advertising, and Online Classifieds, they was about US$75 billion in 2018.
constitute the five segments of the Digital Advertising market.
Although we can observe an advancement in the field of targeting
The dominating segment is Search Advertising with a global market solutions, Banner and Video Advertising still face the challenge of
volume of US$105 billion in 2018, making up a market share of reaching the right audiences. They have a much more random
37%. Having keywords as its underlying basis, Search Advertising enables advertising environment than social networks or search engines.
marketers to reach a relevant target group in a very simple and precise
way. These keywords can be complemented with a range of options, like
194
This difficulty is reflected in the market size of both Banner and Video Online Classifieds make the smallest contribution to overall market
Advertising: With a volume of US$58 billion, Banner Advertising has a revenues. In 2018, the segment generated a global revenue of US$23
share of only 20% of the total Digital Advertising market. As video players billion, with revenues being more or less equally distributed across
have much more limited advertising space than banners, Video categories like motor, jobs, or real estate.
Advertising has an even smaller share of 12%, corresponding to a market
One major trend that has been discussed lately is programmatic
volume of US$35 billion.
advertising including (re-)targeting and real-time bidding. Nevertheless,
Nevertheless, we believe that the development of targeting solutions is we believe that this development is still at its beginning and will have
still at an early stage. Once it is in full swing, it will have noticeable effects noticeable effects on the advertising market in general and the Digital
on the advertising market in general and the Digital Advertising market in Advertising market in particular. Programmatic advertising describes the
particular. software-based buying of advertising space based on audience data to
target certain potential customers. The recipient of the ad is known
Furthermore, in the field of Banner Advertising, we are observing the
before the ad is sold. Therefore, the ad can be even more personalized.
positive impact of native ads, which match the environment in which they
This process takes place within a split second. We expect this targeting to
appear in terms of form and function. In other words, these native ads
become increasingly precise and the average revenue per user will
appear as paragraphs within articles in a form and style which is similar
increase accordingly.
to the content provided by the actual platform's editorial staff. This
format works very well on smaller displays and is ideal for
advertisements on mobile devices. The proximity to editorial
contributions increases consumer engagement and the acceptance of
the ads.
m.daniels@statista.com
195
The global Digital Advertising market is expected to
grow to more than US$490 billion by 2023
Global Digital Advertising revenue forecast in billion US$

Search Advertising Social Media Advertising Banner Advertising Video Advertising Classifieds
489.7
453.1 30.1
414.0 28.9 52.0
373.1 27.4 48.2

25.6 43.9 76.5
331.5 74.0
24.2 39.2
290.8 70.7
22.7 34.8
66.3
30.3
62.5 189.7
58.1 168.7
147.2
125.8
99.2
74.6
124.9 133.4 141.3

105.2 110.7 116.2
2018 2019 2020 2021 2022 2023

Chinese Digital Advertising revenues increased by
almost 20% from 2017 to 2018
Top 5 Digital Advertising countries by market revenue in billion US$

2017 2018
87
United States 16%
101
42
China 20%
50
17
United Kingdom 11%
19
11
Japan 11%
12
7
Germany 10%
8

Digital Advertising is still a complex business with
many players
Selected key players in the Digital Advertising market
Agencies and Trading Demand Side Platforms Ad Networks / Supply Side Platforms
Publishers
Desks (DSPs) Ad Exchanges (SSPs)

Except in China, Google ranks among the most used
search engines
Usage of search engines in 2018
92% 88% 93% 94%
39% 32% 14% 20%
31% 21% 11% 19%
14% 13% 5% 5%
13% 11% 3% 4%
"“Which search engines have you used in the past 4 weeks?”; Multi Pick; U.S.: n=4,091; China: n=2,063; Germany: n=2,068; UK: n=2,020
In 2017, spending on digital advertising has already
outpaced TV-ad spending
Ad spending in billion US$

TV Digital
350
300
250
200
150
100
50
0
2000 2005 2010 2015 2020
200 Source: Magna Global

Facebook’s advertisement business relies heavily on
the advertising revenue from its North American users
Facebook‘s average advertising revenue per user in US$

U.S. & Canada Europe Asia-Pacific Rest of world
110
82
60
39
36
26 27
19
16
14
11 11 9 10
7 5 7 6 7
5 3 4 3 4 5
2 2 3
2012 2013 2014 2015 2016 2017 2018
201 Source: Facebook, Statista Digital Market Outlook

Almost 60% of respondents would disable an ad
blocker if it is the only way to see a website correctly
Reasons for users to temporarily turn off their ad blockers
Only way to view website/

58%
content
Website did not display

43%
correctly with blocker
Wanted to see particular

43%
news site
Told that website needs

26%
money from ads
Wanted to see ads 12%
n=11,513 respondents in 34 markets worldwide, 2017

202 Source: RISJ
Germans disable their ad blocker for online shops
and news – but only 41% use an ad blocker at all
Share of respondents who would disable their ad Share of respondents who use an ad blocker in
blocker for the following content Germany
I don’t know / Use Adblock or

Don’t want to answer anti-tracking software
Online shops 22%
19%
News and
22%
journalistic contents
Videos 15% 41%
Online games 13%
Blogs 10%
None of those 35%

40%
I don’t know /
20% Don’t use Adblock or
Don’t want to answer
anti-tracking software
n=1,036 respondents in Germany; >= 18; April 2017

203 Source: YouGov
www.statista.io/smarthome
Smart Home
Smart homes and the Internet of Things (IoT) are irrevocably entwined, into the segments Control and Connectivity, Comfort and Lighting,
and the IoT is one of the most disruptive trends at the moment, affecting Security, Home Entertainment, Energy Management, and Smart
a large number of traditional industries. IoT initiatives by Google, Apple, Appliances. With revenues of US$24 billion, the U.S. was the biggest
Amazon, or Alibaba have already noticeably changed the smart home Smart Home market in 2018. Although the prospects are positive, the
landscape. They provide opportunities for all kinds of companies, but U.S. grew at an annual rate of 33% from 2017 to 2018, which is
they have also forced market consolidation. The big tech players are significantly lower than the Chinese CAGR1 of 69%. However, the
rapidly expanding their product portfolios in the smart home field with Chinese market is still comparatively small with revenues of US$7 billion
huge investments. One example is Amazon, which acquired Ring in 2018 in 2018.
for US$1 billion.
The market got a tremendous boost from smart speakers in 2018. The
Nevertheless, several market segments still have no clear market leader. adoption rate for smart speakers in the U.S. nearly doubled, which can
Manufacturers, telcos, energy suppliers, medium-sized companies or be attributed to growth in both Alexa and Google Home devices. Apple’s
start-ups still have chances in the future, when practically every product HomePod, on the other hand, only played a minor role. Moreover, there
in the average home will be connected to the internet. was an influx of smart displays, such as Echo Show, the Lenovo Smart
Display, or Facebook Portal. These devices have laid the groundwork for
In the Statista Digital Market Outlook, we divide the Smart Home market
more advanced human interface capabilities.
204 1: CAGR: Compound Annual Growth Rate / average growth rate per year
No matter how many sensors or connected appliances consumers services in the market. Data that is shared with smart devices will
install, they often still have to manually control things, whether through therefore be of great interest to companies.
an app or a voice assistant. Voice assistants can set up routines, i.e.
Considering the handling of all this data, security concerns will become
multiple smart devices can be controlled at a specific time or with one
even more relevant. Due to the fact that there are currently no minimum
command, but it is still rare for a smart home to automatically react to
requirements, there is no standard for implementing cybersecurity into
situations.
smart devices. Consumers are already worried about data security
Many competing smart home standards like Bluetooth, Zigbee, Z-Wave breaches in the context of smart homes, and providers have to respond
or Wi-Fi even make interoperability between devices complicated by to these concerns.
having separate apps and logins. However, devices in a smart home are
seldom used separately. Customers don’t want to switch devices and
technologies when controlling their home entertainment or security
systems, for example. The future of the smart home will be an integrated
platform solution with a universal communication standard interlinking
all smart devices. It will gather data with the help of AI-based solutions to
automate routines and individualize the device functions at home.
The connection of every device, more sophisticated AI-driven services

and the gathering of a gigantic amount of data will present a big
challenge for data transfer solutions. In this respect, the implementation
of 5G is vital. Sharing the data of homeowners with businesses will
probably foster the growth of new individualized technologies and c.blumtritt@statista.com
205
The market for Smart Home products is expected to
grow by 22% annually between 2018 and 2023
Estimated revenue for Smart Home products worldwide in billion US$
2023
152
2018
54.5
CAGR1:
+22%
1: CAGR: Compound annual growth rate / average growth rate per year
The global Smart Home market is worth US$55 billion
in 2018 and is expected to grow even bigger
Global Smart Home revenue forecast in billion US$

Smart Appliances Security Control and Connectivity Home Entertainment Energy Management Comfort and Lighting
152.0
15.1
132.1
11.5
12.6
111.8 9.9 17.8
10.1
15.9
91.2 8.4
30.8
7.9 14.1
7.0 26.7
71.6
5.9 12.4 22.4
54.5 5.6 28.2
4.2 10.8 18.0 24.4
4.3 20.6
9.4 13.9
17.1
10.3 13.8
10.8 42.6 48.6
36.0
28.8
15.7 21.7
2018 2019 2020 2021 2022 2023

The Smart Home market is surging in all top 5
countries, with China showing the highest rate of 69%
Top 5 Smart Home countries by market revenue in billion US$

2017 2018
17.7
United States 33%
23.6
4.3
China 69%
7.2
2.3
Germany 39%
3.1
2.2
Japan 43%
3.1
2.2
United Kingdom 40%
3.0

More and more players with different backgrounds
are entering the Smart Home market
Selected key players in the Smart Home market
Control and Comfort and Home Energy

Security Smart Appliances
Connectivity Lighting Entertainment Management
Dedicated
Smart
Home
companies
Players
entering
the market
from other
industries

The Smart Home market is starting to move past the
early-adopter stage
Innovation diffusion curve for Smart Home adoption in 2018
Diffusion
28% (accumulated users)
20%
16%
10%
7%
5% 6%
Innovators 2.5% Early adopters 16.0% Early majority 50.0% Late majority 84.0% Laggards 100.0%
The diffusion of innovations graph shows successive groups of consumers adopting devices from the Smart Home market (the graph above shows the
household penetration rate of selected countries). Innovations in general are not adopted by all individuals at the same time. Instead, they tend to
adopt in a time sequence, and can be classified into adopter categories based on how long it takes until they begin using the service. Diffusion is
considered to be the rate at which innovations spread among users (an adoption rate of 100% is theoretically possible but not realistic). Considering the
moderate penetration, replacement cycles and that more and more devices will be connected, adoption will steadily grow in the next years.

Competition is eating away at Amazon’s smart speaker
market share
Estimated share of global smart speakers sales

Amazon Google Alibaba Apple Other
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
211 Source: Strategy Analytics 2018

U.S. smart speaker households are 6.6 times more
likely to also own a smart lighting system
Likelihood of U.S. smart speaker households using other connected devices vs. non-smart speaker households
Smart lighting system 6.6x
Smart hub 3.3x
Smart thermostat 2.2x
Streaming device 1.5x
212 Source: comScore Connected Home 2018

The top smart home product brand is AT&T in the
U.S., Samsung in UK and Philips in Germany
Ownership of smart home automation devices
27% 30%
48%
29% 25% 25%
17 21% 19%
15% 19% 14%
14% 14% 12%
"Which of these providers do you own Smart Home devices from?" Multi Pick; U.S.: n=1,211; UK: n=355; Germany: n=270 respondents who own
Smart Home devices for Comfort and lighting, building safety/security or energy management
South Korean smart home device users are mostly
male and between 45–54 years old
Demographics of people using smart home devices in Income

South Korea
Medium income
30% High income
46%
Low income
24%
Female
41%
Male Age
30%
59% 26%
23%
12%
9%
"Do you own smart Home devices – i.e. devices that you can control via a smartphone / an internet connection?"; Multi pick; n=1,046
www.statista.io/connectedcar
Connected Car
Connectivity is a major trend changing our everyday lives – the way we The individual services are divided into vehicle-related services such as
work, communicate, and spend our free time. Naturally, this trend is also maintenance and diagnostics as well as infotainment services such as
dominating when it comes to mobility and, more precisely, to the navigation services. In 2018, more than 31 million connected cars were
automotive market. Original Equipment Manufacturers (OEMs) newly registered, which added to a total of 119 million vehicles on the
increasingly connect their vehicles to the internet and offer a wide range roads worldwide. Together they generated an overall revenue of over
of digital services. Examples are navigation relying on real-time traffic US$19 billion.
information (RTTI), automated emergency calls, or services that let you
These services are meaningful for costumer experience and therefore
locate and access your car remotely.
meaningful for brand value and costumer bonding. However, the direct
From our point of view, a car is considered connected as soon as it is monetary benefit from these services is only one of the goals pursued by
equipped with hardware which enables internet connection. This creates OEMs. Increasing connectivity opens up a broad set of possibilities which
the basis for the communication of the vehicle with other connected are likely to affect the way we drive as well as many different parts of our
cars, smartphones, and the environment. The hardware ranges from daily routines. Connectivity has the high potential to disrupt the
simple telematics for gathering, sending, and receiving limited amounts traditional automotive market by enabling new business models and
of data to products that enable the extended use of internet connectivity therefore offering chances for many other market participants.
and infotainment offers.
215
For example, as virtual assistants like Amazon’s Alexa enter the car, Since drivers will no longer need to pay attention to traffic, the car will
online shopping and the integration of the smart home create new turn into a third space that allows for various other activities like leisure,
possibilities for tech companies and eCommerce retailers alike. work, or shopping.
Car-related data has different sources. The car itself and its sensors In the future, technologically advanced cars are expected to be equipped
generate the so-called “operating data”. These are distinguished from with nearly 200 connected sensors. Combined with the inevitably
information brought into the car by drivers or passengers. Owing to the growing number of connected cars on the roads, the inter-connection of
trend towards vehicle connectivity, the number of connected working components will not only take place inside cars but also between cars
parts and, consequently, the amount of data are continuously increasing. and their environment. This is the so-called Vehicle-to-everything
communication (V2X-communication). Connected cars will share data
Large-scale car data are valuable to their owners. Once privacy concerns
with each other and with the traffic infrastructure. Hence, urban traffic
and third-party utilization have been sorted out, OEMs’ revenue sources
management will be optimized, and driving a car will be much safer.
are almost infinite. Many players are able to generate revenues from
Automotive connectivity is thus paving the way for the future of mobility.
vehicle data. Insurance companies can offer customized policies, repair
shops can get early information on customers requiring their services,
gas stations that know a car nearby needs fuel can offer promotions, just
to name a few of them. OEMs can generally make a profit from the data
in two ways, either by selling data packages or by getting a share of data-
driven turnover.
Another promising use for vehicle connectivity is autonomous driving,

which is already being tested by various OEMs and tech companies.
d.becker@statista.com
216
The global Connected Car market is expected to grow
to around US$30 bn by 2023
Estimated global Connected Car revenue in billion US$

Connected Hardware Vehicle Services Infotainment Services
31.5
29.7 1.3
1.1 2.3
27.3
2.1
0.9
24.7 1.8
0.7
21.9 1.5
0.5
18.7 1.2
0.9 0.3
26.6 27.9
24.6
22.5
20.2
17.5
2018 2019 2020 2021 2022 2023

Infotainment and Communication Systems build the
biggest segment in the global Connected Car market
Global Connected Car revenue in billion US$ in 2018

17.5 0.9 0.3
0.1
Basic Telematics Maintenance & Diagnostics
5.4
Comfort Services
0.0 0.3
Infotainment and Communication Systems

Safety & Security
12.1 Advanced Navigation

0.3
0.5
Remote Services
Connected Hardware Infotainment Services

Vehicle Services

EU Countries show substantial growth due to recent
legislation making eCall a mandatory feature
Top 5 Connected Car countries by market revenue in billion US$

2017 2018
5.5
United States 16%
6.4
2.4
China 34%
3.3
1.1
Germany 30%
1.4
0.9
United Kingdom 32%
1.2
0.5
France 35%
0.7

OEMs can collect vehicle-related data from various
potential sources
Potential sources of vehicle-related data

Lidar
Odometer Gear position Camera
Ignition Coolant temp
Engine status GPS Seat belt
Engine temp Speed
Wiper
RPM Oil level Horn status
Blinker status
Airbag
Door
Fuel/battery
Break pedal Wheel position

Tire pressure
220 Source: Otonomo; wsj.com, Statista Digital Market Outlook

GM’s subsidy Cruise has over 100 autonomous cars
registered for test driving in tech hot spot, California
Number of autonomous vehicles registered to be tested on public roads in California in 2018
Cruise 104
Apple 55
Waymo 51
Tesla 39
drive.ai 14
BMW 12
NIO 11
Toyota 11
NVIDIA 8
Continental 6
Daimler 5
Nissan 5
Note: as at May 2018

221 Source: California DMV, Business Insider
Concerns about the security of personal data have
risen in Germany and the U.S., but fallen in China
Concerns about the security of personal and private data with regard to autonomous driving
It’s a showstopper No issue at all
China Germany United States
6% 10% 7% 7%
15% 15%
13% 9% 7%
17% 9% 10%
27%
35% 38%
34%
38% 44%
29%
21% 28%
35%
28% 19%
30%
21% 18%
12% 13%
7%
2015 2018 2015 2018 2015 2018
“How concerned are you about the security of your personal and private data with regard to autonomous driving?"; n= 2,960 driver’s license
holders
222 Source: adlittle.com 2018
40% of American drivers already connect their
smartphone to their car
Usage of connected services by American drivers
Wireless smartphone connection 40%
Adaptive cruise control system 29%
Wired smartphone connection 22%
Parking assistant 19%
Automatic emergency call 16%
Lane departure warning system 15%
Permanently installed internet connection 14%
None of the above 34%
Don’t know 3%
"Which of these features does your primarily used car provide?"; Multi pick; n= 3,806 respondents who have a car available in their household
Almost 40% of Chinese connected car users are
between 25 and 35 years old
Demographics of people using connected cars in China Income
Medium income
27% High income
49%
Low income
24%
Male
46%
Age
54% 38%
23%
21%
Female 15%
4%
"Which of these features does your primarily used car provide?“; Multi pick; n=1,602
Our products
225
About the Statista Global Consumer Survey
50+ 46 5,000+ 400,000+

topics & industries countries int. brands consumers
Marketing & Finance & insurance
The Statista Global Consumer Survey offers a global perspective
on consumption and media usage, covering the offline and online social media
world of the consumer. It is designed to help marketers, planners
and product managers understand consumer behavior and
consumer interactions with brands. eCommerce & Health
▪ Cross-tabulation retail
▪ Customized target groups

Food & nutrition Housing & household
▪ Trend and regional comparisons equipment
▪ Export in Excel (CSV) or PowerPoint format
Internet & devices Travel
Media & digital media Services & eServices
Mobility Characteristics &

demographics
Find out more on www.statista.com/customercloud/global-consumer-survey

226
About the Statista Digital Market Outlook
90+ 150+ 7 30,000+

markets regions years (2017-2023) interactive statistics
The Digital Market Outlook presents up-to-date figures on markets of the

digital economy. The comparable key figures are based on extensive analyses
of relevant indicators from the areas of society, economy, and technology.
What is the size of the eCommerce fashion market in Spain?
How many connected cars are already on the road in China?
The answers to these and many more questions can be found in Statista's
Digital Market Outlook. It provides forecasts, detailed market insights, and key
indicators for the digital economy.
Nine digital verticals: eCommerce, Smart Home, eTravel, Digital

Media, eServices, FinTech, Digital Advertising, Connected Car, eHealth
Direct access & downloads, fully integrated into the Statista database
Market insights, forecasts and key performance indicators
Outlook reports with segment-specific topics (top companies,

trends, deep dives)
Find out more on www.statista.com/outlook/digital-markets

About the ecommerceDB.com
The toolbox for all eCommerce relevant questions
ecommerceDB.com offers direct access to URL related revenue

information together with forecasts, customizable top, country and
category rankings, KPI analysis and extensive eCommerce relevant
contact information to over 10,000 online stores.
In depth analysis for over 10,000 online store URLs
Adjustable top, category & country rankings
Download shop profiles for seamless processing
Direct contact to our eCommerce analysts TEL +49 40 28 48 41 409

E-MAIL sukhdip.mann@statista.com
Find out more on ecommercedb.com

228
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Authors and contacts
Authors Contacts
UNITED STATES +1 212 419 5770

Sebastian Buss Geeske Nöldeke Esther Shaulova support@statista.com
LATAM +1 212 419 5773
Andrea Romero andrea.romero@statista.com

Dennis Becker Christoph Blumtritt
EUROPE +44 203 709 9960
Lodovica Biagi eu.support@statista.com

Marcos Daniels Ksenia Striapunina
GERMANY +49 40 28 48 41 0
Jens Weitemeyer kundenservice@statista.com
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www.statista.com/outlook/digital-markets
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DIGITAL ECONOMY COMPASS

▪ Artificial Intelligence: How smart machines influence our daily lives……………………………..…………………………………………………………………….…………………………... 44

Statista Digital Market Outlook

▪ eCommerce ……………………………….………………………………………………….…………………………………………………………………………………………………………………….…………….... 129

▪ eServices …………………………………………………………………………………….……………………………………………………………………………………………….……………………….…………….... 143

▪ eTravel …………………………………………………………………………………….…………………………………………………………………………………………..……………………………….…………….... 158

▪ Digital Media …………………………………………………………………………………….………………………………………………………………………………………………………………….…………….... 170

▪ FinTech …………………………………………………………………………………….…………………………………………………………………………………………….…………………………….…………….... 182

▪ Digital Advertising …………………………………………………………………………………….………………………………………………………………………………………………………….…………….... 193

▪ Smart Home ………………………………………………………………….………………….………………………………………………………………………………………………………………….…………….... 204

Worldwide amount of data created per year in zettabytes1

1: One zettabyte equals to 1 billion terabytes

The amount of data created in 2018 (33 zettabytes) equals to ...

660 bn x 330 m x 375 m x

x 1,000 x 1,000 x 1,000 x 1,000 x 1,000 x 1,000 x 1,000 x 1,000

Byte Kilobyte Megabyte Gigabyte Terabyte Petabyte Exabyte Zettabyte Yottabyte

1: as at March 2019 2: Varies depending on calculation method 3: as at June 2018

The Cloud market is highly dominated by Amazon,

Share of data storage solutions

9 Source: IDC’s Data Age 2025 study

Worldwide market share of Cloud services1 in Q4 2015 and Q1 2018

49% Q4 2015 Q1 2018

Number of acquisitions of companies with a focus on Cloud technology

Worldwide revenues from enterprise storage in billion US$

83% 76% 69%

Selected reasons for companies to use Cloud services

Speed and agility

Stability and security

13 Source: Company information, Rick‘s Cloud, Upwork, Salesforce, Globussoft

Adoption rates of Cloud services among enterprises

Not polled in 2017

Not polled in 2017

Selected companies in the storage & analytics landscape in 2018

Infrastructure Cross infrastructure / Analytics

The growing importance of data and the public

Selected companies’ patent applications for data security

2013 2014 2015 2016 2017

The concept behind Blockchain

18 Source: Steemit, Reuters, Statista Digital Market Outlook

Total worldwide venture capital invested in Blockchain companies in billion US$

2013 2014 2015 2016 2017 2018

19 Source: Diar, Statista Digital Market Outlook

Average cost per capita of a data breach in selected industries in US$

20 Source: IBM Security, Ponemon Institute

United States US$7.9m 31.4m

Canada US$4.7m 22.3m

Germany US$4.7m 23.6m

France US$4.3m 25.3m

Global average US$3.9m 24.6m

United Kingdom US$3.7m 22.8m

Italy US$3.4m 22.6m

Japan US$3.4m 19.2m

South Africa US$2.9m 21.1m

India US$1.8m 34.1m

Brazil US$1.2m 25.0m

21 Source: IBM Security, Ponemon Institute

Selected breaches by number of compromised data records in millions since 2013

22 Source: CB Insights, CSO, Informationisbeautiful.net, Company information

United States 70.6