At Ten, Facebook Seems Bullish On Indian Market

by Sohini Bagchi    Feb 04, 2014

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With over 1.2 billion users worldwide, social networking major Facebook is celebrating its 10th birthday today. With the passage of time, as the company expands into the mobility space and looks to expand to emerging geographies where Internet penetration is still low, it considers India to be one of its most important markets.

The India growth

While Facebook had seen a 23% rise in its user base globally over last year, in India, the social networking company saw a 50% increase in user base during the same one-year period.

“India is at the top of mind for Facebook,” confirmed Facebook’s India chief, Kirthiga Reddy in a recent interview to TOI. Reddy said the company’s founder-CEO Mark Zuckerberg too sees India as a key market for our monetization drive, a lead market for emerging economy models.

The social networking website sees 2 million new users in India added every month and is currently home to 93 million users in the country. According to media reports, by 2015, India will have more Facebook users than any other country on Earth—tilting the social networking action away from the West and toward one of the fastest-growing emerging markets on the planet.

Social networking analyst Prasant Naidu, attributes Facebook’s explosive growth in the subcontinent to its huge, mostly untapped market. He writes on his blog: “Facebook has also aggressively targeted younger people. “In India, nearly 76% of all Facebook users are of younger age groups (18 to 34) and it’s clear that this age group is driving the social media revolution within the country.”

Last month, the company garnered 53% of its total advertising revenue from mobile - and many of those ads are highly targeted by gender, age and other demographics. At the heart of the India gameplan is the ‘mobile first’ strategy which it had announced globally a year ago. Facebook is also aggressively looking at operator partnerships to increase usage and has made deals with Airtel, Reliance, Aircel and Idea for allowing their subscribers to access Facebook for free.

The company has realized that localization is the way to go in India and is offering services in regional languages. For instance, it has launched a program called “Facebook for Every Phone” app, which delivers smartphone-like Facebook experience on feature phones in Hindi and other Indian languages including Gujarati, Tamil, Malayalam, Kannada, Punjabi, Bengali and Marathi.

Thousands of small businesses in India have used Facebook as a platform to engage fans and promote their brands. For example, Hari Nair, CEO and Founder, HolidayIQ.com, a travel information portal says that the company is using Facebook analytics to distinctively position itself in the online travel information space and cater to its customers’ even better. Facebook CFO, David Ebersman believes many more businesses in the country will join the fray in the next 12-18 months.

Read: How Marketers Can Gain From Facebook Ads

Overcoming challenges

However, Facebook seems to be facing a awkward problem.Between January 2011 and January 2014, for example, Facebook lost more than 3 million users between the ages of 13-24 especially in the US, iStrategyLabs said in a recent report. Ebersman too confirmed that the website was indeed seeing a lower active usage rate from teenagers US.Teens in the US have been moving on to more private modes of communications, such as WhatsApp, WeChat, and Snapchat.

This is another reason for Facebook to turn to emerging nations such as in India, where Facebook continues to be the rage. Facebook sees the growing importance of Messenger to keep its customer base going in India, a mobile-dominated country where SMS’ ironically comes at a high price. Experts however believe unless Facebook constantly reinvents itself in the next one year, it will be difficult to make a stronger dent in the Indian market too which is also seeing a shift to WhatsApp and others messenger that may beat Facebook in the social category.

In India too, the biggest challenge for Facebook would be to grow its revenues in line with the user growth. However Reddy seems to be determined. She notes in her interview that “the challenge is to make Indian firms see Facebook as a mass media, not social media.”  That’s where its success will lie too, believe experts.