Emerging Markets the Key for Facebook Growth

As Facebook user growth continues to slow in North America and western Europe, the social networking site will find its next billion users from emerging markets, particularly those in Asia and Latin America. According to a recent report from eMarketer, Facebook is poised to gain nearly 200 million new monthly users per year from 2012 to 2017. Much of this growth will come from Brazil, India, Indonesia, and other emerging Asian nations. Growth rates in the U.S. have already fallen below 10%, and will likely drop even lower in the coming years. In emerging Asia however, double digit growth rates should be the norm for at least the next five years.

Facebook Mobile Expands Zero-Rated Service

Facebook announced today that it has reached a deal to bring free or discounted use of its Messenger app to smartphone and feature phone users in 14 countries worldwide. The announcement mirrors similar moves by Facebook to zero-rate its service in emerging markets to attract mobile web users. While the majority of Facebook users in developed countries access the site from their computers, emerging market users are far more likely to access the site and its services on their mobile phones. In India for example, where over 50% of the country’s web traffic is from mobile phones, near 61.5 million people use Facebook, many of them via mobile web.

The following operators were part of the recent deal:

India Mobile Users Experience

In 2009, the number of mobile users in India was 429.73 million. Latest estimates from the Telecom Regulatory Authority of India (TRAI) put this number at 906.62 million. In a little over three years, the number of mobile phone users in India has doubled to reach a figure that is greater than the entire population of the European Union and the United States combined. This mobile subscriber base is not only numerous, it is also highly connected. A steady increase in purchasing-power of the Indian middle class, combined with a decrease in the price of mobile handsets and data rates, has created a perfect storm of sorts for the digital Indian consumer.

Brand Engagement on Facebook

Facebook announced yesterday that advertising revenue for the social network increased by 41% in the fourth quarter to $1.33 billion. This sizeable growth in revenue highlights a commitment by brands across the globe to reach consumers through Facebook. Another interesting piece of the trend worth noting is the increase in mobile advertising revenue as a share of total advertising revenue. The total amount of mobile ad revenue nearly doubled in Q4, increasing its share of total ad revenue from 14% to 23%. Facebook, on both mobile and desktop platforms, is fast becoming a popular medium for brands to engage with their consumers.

Twitter for Feature Phones

In a move that follows similar steps taken by Facebook and Google+ to attract new users in emerging markets, Twitter has partnered with Turkish mobile operator Turkcell to allow subscribers to send tweets from their mobile phones at no charge. Twitter has made similar partnerships with about 250 operators in over 100 countries, allowing mobile phone users in India, Brazil, the Philippines, and beyond to post and/or read tweets for free.

twitter for feature phones

Facebook launched a comparable initiative in May 2010 which they dubbed ‘Facebook Zero’. The move allowed users with participating operators access to a zero-rated (i.e. free to browse) basic version of the social network’s website. For emerging market consumers, many of whom access the web via mobile phones, the ability to use the service at no cost was a major pull. Facebook now finds the vast majority of its user growth from developing nations such as Brazil, India, and Vietnam.

Facebook Messenger

Last week, Facebook pushed out a major update to its mobile Messenger app. Alongside the ability to send text and photo messages, users will now have the ability to send voice messages via a WiFi or cellular data connection. What’s more, the company is beginning testing of a new VoIP feature that will allow users to make phone calls over mobile web. The move by Facebook is another play to popularize the social network amongst mobile users. There are already over 600 million monthly active Facebook mobile users, and around 126 million of these are mobile only. As CEO Mark Zuckerberg himself admits, it is from mobile users that Facebook will get its next billion users.

Facebook Messenger

All of the Lights: Diwali and Social Media in India

When you get a chance, take a look at the special event page set up by twitter for this year’s Diwali festivities. The feed is covered with photos of candles, fireworks, holiday lights, and bollywood celebrities, all in celebration of the “festival of lights”. Besides an amazing display of festive spirit, the celebratory tweets help depict the growing phenomenon of social media amongst Indian consumers.

Google Free Zone: Google’s Challenge to Facebook Zero

Back in May of 2010, Facebook unveiled Facebook Zero, a text-only version of Facebook offered for free to subscribers of participating mobile network operators. The goal for Facebook was to make using the social media site synonymous with using the internet for mobile web users in emerging markets. Thanks to this initiative (among other factors) Facebook use exploded in Africa, rising 114% in 18 months after the launch of Facebook Zero. In Asian countries as well, the vast majority of internet users are also members of Facebook. In the Philippines, almost 30 million of the country’s 33.6 million internet users are on the social network. That’s a penetration rate of over 90%!

Social Media Stats

Given the news about Facebook hitting the 1-billion member mark, we decided to survey our research panels about social media usage.

Below, please find data gathered from our representative panel of consumers who are mobile and/or web users. As the data shows, an astounding number of these panel members are registered on Facebook:

 

Country Use Facebook Use Facebook Daily Update Social Media (Facebook, Twitter, etc.) Status Weekly Watch video online monthly
Philippines

98%

67%

95%

66%

Brazil

97%

58%

89%

71%

Nigeria

97%

39%

85%

27%

Kenya

96%

37%

86%

44%

Indonesia

93%

56%

89%

35%

India

91%

45%

85%

46%

Vietnam

87%

61%

91%

49%

 
 

What’s especially interesting to note is the frequency of engagement in social media: In Vietnam, 61% of respondents use Facebook daily… even though the service is banned by the government!

Furthermore, across all of the countries, the prevalence of weekly status update changes were above 85% .

In contrast, online video usage is still relatively nascent, which we attribute to relatively slower or more expensive broadband speeds.

What would you like to ask our members about social media usage? Let us know on twitter: @Jana

Social Media and Mobile Web in the Developing World

For Facebook, the countdown to one billion users has already begun, as the social network moves closer each day to the landmark figure. Current estimates put Facebook at approximately  950 million users, meaning that with quarterly growth of only 6% or more, the site will reach the one billion mark by the end of the year.

What much of the buzz around the site seems to neglect is that the driving force behind Facebook’s quest for a billion users is its rapid growth in the developing world. While the United States is Facebook’s largest market with over 160 million users, the next three largest markets are Brazil, India, Indonesia, and Mexico with over 58 million, 56 million, 43 million and 38 million users respectively. In addition, the annual growth rates in Brazil (at 99.6%) and India (51.6%) dwarf the 9.6% growth in the US. It is clear, that as Facebook reaches one billion members, that the majority of these users, (and its NEXT billion users!), will come from the developing world.

While certainly an exciting development, the growth of Facebook is indicative of larger, even more noteworthy global trends. The social network’s push towards one billion users is, itself, a microcosm of global consumer development. Developed western nations represent the bulk of Facebook’s members, yet growth in these markets is quickly approaching zero. Developing markets, on the other hand, while already representing a significant portion of users, are still growing, and are growing faster and faster every day. This is an exciting moment for Facebook, but even more importantly, this is an exciting moment for the world. The push for a billion users is really just a mirror of two captivating international developments:

  • The growth of the emerging middle class
  • The rise of the mobile web in the developing world