There’s been talk lately about Facebook’s growth potential among international markets. Much of this will depend on if and when the social network determines how to sell things on mobile, and if it can set up a seamless, user-friendly payment platform.
In the social network’s S-1 filing, it hinted at an intention to grow internationally:
In countries such as Japan, Russia, and South Korea, we estimate that we have penetration rates of less than 15 percent; and in China, where Facebook access is restricted, we have near 0 percent penetration.
But how realistic are these ambitions to grow, especially in Asian markets? Considering this question in depth, Benjamin Joffe, chief executive officer of Asia-based digital research and strategy firm +8* Plus Eight Star, took an insider’s look at the competitive landscape in Japan, South Korea, and China, and how realistic the prospect of a Facebook boom is for each, for TechCrunch.
Here is a quick-hit cheat sheet of the pros and cons Joffe highlighted within each market. In emerging markets especially, it’s not all about the number of registered Facebook users. For example, Indonesia, the fourth-largest Facebook country, has some 42 million users. The majority, however, are mobile users who don’t pay a dime. Mobile has potential in these markets if Facebook has something to sell, and ways for users to purchase it. Still, is it worth the effort for Facebook to develop new technologies?
- Fewer than 10 million Facebook users currently.
- Country has a high gross domestic product per capita.
- Strong IT infrastructure already established.
- Boasts second-largest online advertising market globally.
- Spends mega-cash on mobile social games.
- Already has two existing mobile gaming and social-networks: Gree and Mobage, each with 25 million registered users.
- Has Cyworld social network, which started in 1999.
- SK Communications bought Cyworld in 2003 for $7.14 million.
- In 2011, Facebook’s number of registered users topped Cyworld’s.
- Massive potential for Facebook to win out on social gaming since Cyworld has yet to effectively figure this out.
- Facebook has been blocked there for years and still is.
- Enforced self-censorship requirement could easily lead to blocking or shutdown even if Facebook is allowed to get up-and-running.
- Highly competitive market with two social networks already on stock exchange: Tencent (worth $53.4 billion) and Renren (worth $2.43 billion).
- Only 7 percent of Tencent’s revenue is from advertising — the rest is from games (online, Web, and social, as well as avatars), so Facebook model wouldn’t reap fast rewards.
Let’s keep it real: It is not going to be raining gold because of the hard barrier of GDP/capital.
Readers: Is it worth it for Facebook to spend the development dollars needed to make growth in these and other Asian countries worthwhile?
Image courtesy of Shutterstock.