A lot of 3 year olds do know the alphabet fully and can read pretty good.
My 3 year old son could recite the alphabet fully without any mistakes by age 3 and could read somewhat on his own.
I taught him the alphabet by singing the alphabet song with him and he started singing the alphabet song on his own and about 3 years and 4 months he was easily reciting the alphabet without any mistakes in it.
However it's normal for some 3 year olds to not know the alphabet fully or at all because all kids learn at different ages and paces.
Some kids are more smart than others and that is okay.
Some 3 year olds can read some but not very good.
If you read to the child by the time they reach 2 years old and then when they reach 3 years old they may be able to read some simple words in some books.
My 3 year old son could read small books with large words in them and could read some words on the TV and know what they were saying.
By the time my 3 year old went to Kindergarten when he was 5 years and 6 months old he was reading pretty good.
I made sure to read to him and teach him to read before he turned 2 years old and he loved reading a book and having me help him pronounce the words.
All kids will learn to read at different paces and ages but some kids are able to read some words at age 3 and sometimes younger.