Facebook Turns To India For Growth

Posted: Jun 4 2014, 2:06am CDT | by , Updated: Jun 4 2014, 2:11am CDT, in News


Facebook Turns To India For Growth

Facebook loves India, and for good reason. The country trails only the United States in active users, with around 114 million. The country is young, tech savvy, and slowly becoming upwardly mobile.

Everyone has read the report about the Princeton University students who forecast that Facebook in the U.S. will have shed as much as 80% of its user base by 2017. That would be a near death experience if that came true. But in India, Facebook remains the social media of choice.

Facebook has grown at light speed in India. In 2010, there were only 8 million active users in India.

Dan Neary, vice president for Facebook in Asia Pacific told the Economic Times on Wednesday that, “Everyone gets that offline is moving to digital and within that mobile is the biggest component.” In the U.S., mobile consumption of data is estimated to beat TV viewership over the next 12 to 18 months.  Advertising has already moved in that direction.  And Facebook is planning on focusing more on mobile in India, something it did a little late in the U.S., making room for upstart social media sharing platforms like Instagram, which Facebook bought for a $1 billion in 2012.

According to the ET, 84% of India’s Facebook users are accessing the site from their smart phones.

Facebook is customizing apps specifically for the Indian market. It recently rolled out a missed call capability, something that does not exist in the U.S.  Facebook is also working with marketers in India to help businesses understand the word-of-mouth, advertising power of social media.

Facebook’s growth in India is reminiscent of Google’s first social network, Orkut, which expanded quickly beyond the States and exploded in Brazil so loudly that it became Brazil’s premier social media platform. In fact, Orkut was so overrun by Brazilians that many Americans began to leave. At this point, challengers like My Space and Facebook were already coming on the scene.  Orkut was never a core business to Google, but investors will pay close attention to Facebook’s fanbase in its core market, the U.S. The company’s billion dollar acquisitions, first of Instagram and most recently of free-text app WhatsApp, keep the company relevant even if its original business is starting to contract.

The U.S. decline of Facebook has been an ongoing story since its initial public offering in 2012.

Facebook now adds only 1 million people per quarter in the U.S., and that number has been in decline since the first quarter of 2012. Growth does not appear to be accelerating in any Facebook nation. Asia is the healthiest. India is the best, until a domestic social media disruptor comes to town.  For now, there are now major native social media competitors that offer the same service. Twitter is No. 2 in India, followed by LinkedIn.

Digital statistics also bode well for Facebook, or companies like it. The compound annual growth rate of digital ad spending is 29.9%, more than TV (14.7%) and print (11.5%), according to KMPG International.

The Evolution Of Facebook

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