Facebook’s growth explosion in developing countries

January 28th, 2010 | Leave a comment

Picture 1

Facebook has clearly tapped the Internet Café culture in developing countries and has created a global and socially flattened marketplace. Quite an accomplishment.

And app developers, brands and marketers should take notice of the game changing growth of Facebook’s penetration of the developing world. There is an intersection of global and social on this platform that creates an easily accessible global market for ideas and brands. Maybe for the first time.

Back in December, just after Facebook’s announcement of the 250M user number, I blogged on the top 10 Facebook countries by user numbers and the part that having the app in the browser made to a global user base. The discrepancy between users and computer penetration per capita led me to conclude that the cloud based app allowed the Internet Café culture of developing countries to explosively adopt the platform.

I reran these numbers some 90 days later to see if this was a blip or a real trend. Thanks to Gary Klein, product maven and product lead at Vpype, a social video company I work with, for collaborating on this.

The results are astounding.

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Let’s look at the facts over this very short period of time.

-Turkey, #3, is growing at 128% annually and will overtake the UK at #2 within 6 months.

-Indonesia, formerly #7 is now in the #4 spot and growing at a rate of 187%. It is larger than France, Canada and Italy.

-The Philippines, formerly at the bottom in 10th place is now #8, passing Spain and Australia, growing at an annual rate of 152%.

Growth of Facebook is occurring in spite of the lack of computer penetration. It’s happening at Internet Cafés and on phones and spurred by the need for social networking and the efficiency of the Facebook cloud-based app.

You can look at these numbers as the democratization of global markets. Or as the flattening of the world culturally where time and space get pushed aside to empower ‘friendship’ across geographies and languages.

From my perspective, two items jump out.

First that Facebook just gets and maybe defined the online social framework. Free storage and sharing of photos and videos and friend’s list is as pertinent to a family in NY with kids in Wisconsin as it is to a young entrepreneur in Istanbul with family in Ankara. Social frameworks work and if there is any doubt that Facebook will become the major advertising channel for both global and local brands, it is now gone. It is more targeted and more efficient than networks or cable. If you were Nike or Armani Exchange, where would you advertise?

And second, for app developers and marketers, this makes global markets an essential part of product and market discovery strategy. The cost of global marketing and customer discovery is for the most part, gone. Facebook has both proven that the social fabric is global and provided marketing and distribution access to it as well. The barriers to these markets are really ameliorated.

My sense is that Facebook and this easy access to global markets will spread as computer hardware becomes cheaper and more available. But numbers don’t lie. Whether you are Zynga with Farmville, or Pepsi, or an herbal supplement company in Colorado or a video blogger…the world is now accessible. To anyone. And in real time.

And we have Facebook to thank for this.

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  • I'm curious to see how FB Credits will either smooth out international buying or not if one is marketing a product. Will facebook take the initiative and allow people to sell their own physical items through facebook? There is huge leverage positions in doing so (recommendation to purchase funnel) And if so, will FB currency replace dollar denominated currency as a way of dealing with international trade issues.
  • Hi Shana

    Facebook is certainly an advertising and banking model. They sell advertising based on remarkably deep demographic data and yes, moving towards owning the transactional layer between user, brands and products.

    Brands are presenting their catalogs on their Facebook pages today (although primitively) and conducting commerce, connected to their own back end ticketing and systems or to Amazon's. I see Facebook sticking with the transactional piece and eschewing touching hard goods.

    How this globally in a flattened one-currency social economy...who knows. Should be fun as this materializes.
  • Aviah Laor
    This is a very insightful post Arnold. I wonder if they are building an in-house Paypal killer to handle Intl. currencies/transactions, though monetarization in these "emerging Facebook markets" will probably take a few years.
    There is definitely a huge flatten world potential: question is how much Facebook is going to unlock and share it with the rest of us.
  • Hi Aviah

    I don't know FB's plan for owning the transactional infrastructure but I wouldn't count this out. Owning that and the actual ad serving layer around the community could hold significant economics.

    I plan on attending and speaking at the Social Media Conference in London in Mid March and will be posting alot on what I learn about the platform in Europe.

    The Facebook founders are really smart. We shall see what level of foresight they have in the balance of mining this money bin and letting it grow in the face of a demand for an open web world.
  • Facebook have been playing around with Credits for a while now and are currently "suggesting" Games Developers use it for their in-game virtual purchases.

    I don't see it being too long until Credits goes beyond games, probably in tandem with a greater increase in FB Commerce.

    I have read that former FB President believes Credits to be approx 1/3 of 2010 revenue - so depending on who's numbers you go for - this could be a $350M-$700M line item this year
  • Hi Simon

    They made some announcement on this at F8 but I haven't heard much in the face of all the other initiative and controversy.

    But yes...for them to be the 'bank' or payment system makes good sense and could be huge for them on a global basis.

    If you have any links or info on this that you can share, I'm be appreciative.

    Thanks
  • Great insights regarding the global expansion of Facebook and the reasons behind it. It continues to be a challenge for many U.S.-based companies to overcome the cost of expanding into global markets, but social media sites seem to have leveled to marketing playing field a bit. Still, having the channels in place doesn’t solve the issues of localization and cultural nuances. I wonder if Facebook and other platforms will help create a universal social media language that overcomes existing cultural differences, at least online.
  • Clint

    The distribution channel is getting leveled but the subtleties of language and culture will always be there.

    The good news is that people are becoming more global and connected on these platforms so that at least people are more open to connect. And I think more tolerant as well.


  • Ahmet
    Turkey is not a developing country, it is a developed country.
  • Ahmet

    I rechecked the definition of the word @ http://bit.ly/3Xqn50 after receiving your comment. You are correct and I will search for a better way to describe this.

    I was trying to find a term that spoke to the low computers-per-capita numbers against the increased usage of Facebook.

    Thanks for the clarification.
  • I agree with your original hypothesis concerning stronger Facebook growth in countries with less expensive access portals, but with a twist. Maybe the growth is really centered on societies that emphasis the group over the individual. In these societies everybody is already connected and WANTS to be connected. All Facebook does is ease the friction that exist in getting information out. I think Facebook would see stronger increase in users in the Middle East if they could work through the concerns that goverments have concerning Facebook's network in that region.
  • Bill

    Thanks for your insights.

    I agree that there is a cultural part of socialization but as I look at the countries in the top 10, I don't see see the 'group centric' mentality, at least from my point of view. It spurred some thought though.

    Re: Facebook and governments. You are probably right but I'm not in the know on it and can't comment.

    I am, seeing that you are in Afghanistan, very interested in uses of social media around the world so do please continue to share your ideas on this blog.

    Thnx for stopping by.
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