Does Taiwan’s Explosive Facebook Growth Mean More To Come In East Asia?

[Editor’s Note: The following article, and the Global Monitor Report data it cites, are from Inside Facebook Gold, our new data and analysis membership service tracking Facebook’s business and growth. In addition to monthly Global Monitor data updates, Inside Facebook Gold presents weekly in-depth analysis articles exploring the most critical developments impacting the future of the Facebook ecosystem. Click here to learn more.]

Facebook has seen tremendous growth in Southeast Asia over the past several quarters, at the expense of formerly dominant competitors like Silicon Valley companies Friendster and hi5, and locally-based networks.

The leading countries in terms of overall growth in traffic have been Malaysia, the Philippines, Thailand, and Indonesia, based on the data we track in our monthly Global Monitor Report. Notably, Indonesia is now Facebook’s number three country in the world in total audience size, trailing only the United States and the United Kingdom. And yet, Facebook has seen little growth in Japan and South Korea — two of the most lucrative markets in the region — and it is blocked in mainland China, East Asia’s largest and fastest-growing market.

One country in which Facebook has enjoyed an exceptionally meteoric rise is geographically near to these Southeast Asian growth zones but offers us a unique view on growth throughout Asia. Taiwan’s Facebook traffic and engagement are growing as fast as the most standout Southeast Asian success stories, and yet it is different from these markets in one key way. Like the island metropolises of Hong Kong and Singapore, Taiwan has adopted Facebook the way the Southeast Asian markets have. But, culturally and linguistically, Taiwan, also like Hong Kong and Singapore, remains deeply connected to East Asia.

What can Taiwan’s growth trajectory tell us about Facebook’s chances throughout both Southeast Asia and the more competitive East Asia? What opportunities does a strong Facebook-in-Taiwan presence offer for developers all over the world?

Today’s analysis draws from the most recent data available in our Global Monitor Report in order to examine what Taiwanese Facebook growth could mean for competitors, developers, and advertisers operating in that region.

Why we have chosen to highlight Taiwan

Facebook’s growth in Taiwan has actually slowed since January of this year. Why, then, is it an interesting case to study? Taiwan’s growth slowed because it grew so fast in the second two quarters of 2009 that Facebook was actually moving toward market saturation by the end of that year. There are 6.2 million Facebook users in Taiwan, out of approximately 15.4 million internet users in that country.

For a country with current total internet penetration rates hovering around 67% (similar to many other developed economies), this means that just over 40% of all internet users in Taiwan are also on Facebook. What’s more astonishing is that over 93% of them, or 5.8 million, joined the network in the last three quarters.

In short, Taiwan has become a Facebook country.

It’s not just the fact that the site has reached market saturation, however, but the rapidity with which it did so. It took a whirlwind three quarters for Facebook to jump from fewer than 400,000 total Taiwanese users in June of 2009 to its current 6.2 million. What were the factors that account for this rapid rise, and could they be replicated in Japan, Korea or mainland China (assuming Facebook were to become unblocked in that country)?

We’ve written in the past about China’s dispersed social networking landscape, and the unrealized opportunities for application developers on Chinese platforms, but less has been said about Taiwan. While linguistically and culturally closer to China than any other country, Taiwan presents a very different set of opportunities. The two cannot be confused, and yet, Taiwan does present some key insights for growth in the China market.

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