Wednesday, 9 May 2012

Why Facebook is doing poorly in the Japanese market?

According to Facebook's IPO Roadshow Presentation, Turkey and Chile are the top penetrated countries with more than 85% user penetration. Same presentation indicates that the user penetration is less than 20% in developed markets such as Japan and South Korea. What does this mean?


Turkey and Chile are both emerging markets with significant grow rates. Especially Turkey currently has a massive boom in its internet market. Tens of new e-businesses are being established every day and everybody is curious about internet. This makes a clear case for user penetration to be high in these markets.


But how about Japan and South Korea? These two countries are almost the most technologically developed countries in the world. However, Facebook is doing quite poorly in these markets. I am taking Japan as an example and I think there might be couple of factors for these numbers;


1) Lack of local knowledge and language capabilities might put Facebook behind the competition. Japanese market has Gree and Mixi which are labeled by some as "more comprehensive Facebook". Gree has reported 21M customer in July 2010.


2) The percentage of population above 65 is ~6% in Turkey while this is around 23% in Japan. Older people are not likely to use Facebook and new technologies.


3) Culturally, Japanese people are less open about themselves and more sensitive about distracting someone. Since Facebook is an open environment for "disturbing" each other and disclose private information easily, Japanese people might be reluctant to use it.

4) And hard working maybe?They work so hard that they don't have time for "Facebooking"? :) 


What else do you think can be the reason?

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