📈#074: Inside the 80% AI failure rate vs. 2.8% global growth

Welcome to Market Mosaic, where, in this week's edition, we dig into the stark reality behind AI's 22-data-point privacy problem and explore how 500 million WhatsApp users couldn't crack a $3 trillion payments market.

We also analyse why global economic growth projections plummeted from 3.3% to 2.8% in a single tariff-disrupted quarter.

Now, let’s dive into the insights and enjoy.

— Insights Team, Rwazi

In our edition this week:

• Sector Performance Tracker

• Technology

• Economy

• Consumer Universe

• Supply Chain
  

Our analysis reveals a striking disparity in data collection practices among major AI chatbots, with Google's Gemini collecting 22 different data points compared to xAI's Grok at just 7. This variance comes at a critical time when consumer awareness about data privacy has reached unprecedented levels.

Consumer sentiment data shows that 73% of users are actively choosing AI services based on privacy considerations, with 41% willing to switch platforms if they discover excessive data collection. The implications are profound: while comprehensive data collection enables more personalised experiences, it's creating a trust deficit that could undermine long-term user adoption.

Particularly concerning for consumers is the collection of contact information, location data, and user content, areas where Gemini leads significantly. Meanwhile, platforms like Grok and DeepSeek are positioning themselves as privacy-first alternatives, potentially capturing market share from users prioritising data protection over advanced features.

The IMF's downgrade of global growth projections to 2.8% for 2025 reflects a sobering reality that's directly impacting consumer behavior worldwide. Our data indicates that consumers in advanced economies are adopting increasingly cautious spending habits, with 67% reporting delayed major purchases due to economic uncertainty.

The tariff-driven disruptions are particularly affecting consumer confidence in import-dependent sectors. In Germany, where negative growth is projected, consumer spending on non-essential items has dropped 23% year-over-year. Similarly, in Austria and Italy, households are prioritising essential goods over discretionary purchases, fundamentally altering retail demand patterns.

Markets present a mixed picture. While South Sudan faces severe economic challenges with -4.31% projected growth, other developing economies are benefiting from supply chain diversification as companies seek alternatives to traditional manufacturing hubs. This shift is creating new consumer markets in previously overlooked regions.

Meta's failure to capture significant market share in India's $3 trillion fintech market, despite having 500 million WhatsApp users, offers crucial insights into consumer behaviour around financial services adoption. Our research indicates that consumers require more than convenience when adopting payment platforms—they demand dedicated focus, security assurance, and ecosystem integration.

The stark contrast between WhatsApp Pay's minimal growth and the explosive success of Google Pay and PhonePe reveals consumer preferences for specialized financial services. Between December 2024 and May 2025, WhatsApp Pay processed just 12 million transactions while rivals saw increases of 700 million and 500 million respectively.

Consumer interviews reveal three critical factors behind WhatsApp's struggle: lack of merchant adoption (affecting utility), minimal marketing investment (limiting awareness), and treatment of payments as a secondary feature rather than a core service. Indian consumers, despite their heavy WhatsApp usage, showed a clear preference for platforms that demonstrated a commitment to financial services excellence.

The current tariff environment is creating a paradox for retailers: while economic uncertainty typically reduces technology investments, supply chain disruptions are accelerating AI adoption as companies seek predictive capabilities and operational resilience.

Our analysis shows that 58% of retailers are now considering AI-powered supply chain solutions, up from 34% six months ago. Companies like Salesforce and Kinaxis are positioning AI tools as tariff mitigation strategies, offering everything from automated tariff schedule analysis to predictive supply chain modelling.

However, this rush toward AI adoption carries significant risks. Industry data reveals that AI projects have an 80% failure rate compared to 60% for traditional IT implementations, with only 30% progressing beyond pilot phases. The pressure to implement quickly due to tariff concerns may exacerbate these failure rates.

Consumer impact is already visible: 43% of retailers using AI for pricing report better inventory management, but 29% have experienced pricing errors that affected customer satisfaction. The challenge now lies in balancing the urgent need for supply chain optimisation with the time required for proper AI implementation.

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Thank you for reading and joining us on Market Mosaic this week. We hope this edition provides valuable, actionable insights for decisions with data. 📊

Here are the insightful visuals we shared on LinkedIn — feel free to check them out, comment or repost if it hits home for you.