Why Facebook is depending on India for growth as it turns 10


Facebook turns 10 tomorrow and it’s a pretty huge milestone considering the amount of naysayers the company has had to deal with over the years. The social network has grown bigger and bigger over the years, with expansions into the smartphone space as well as special interests in expanding to developing countries where Internet penetration is still low. So naturally, Facebook has big plans for India.

 

In an interview to The Times of India, Facebook’s India chief, Kirthiga Reddy, confirmed that India is top of mind at Facebook's HQ. Mark Zuckerberg – or Zuck, as she calls him – sees India as a key market for its monetisation drive and a lead market for Facebook’s emerging economy models. The numbers tell Facebook’s growth story in India. The social networking website sees 2 million new users in India each month and is currently home to 93 million users in the country. The numbers impress further when you realise that the Indian user base is second only to the US in the world right now.

 

For Reddy, the website’s India growth story will be supplemented by the growth of businesses on Facebook. "There are over a million advertisers on Facebook globally, a very significant milestone for us to reach. We don't share country-specific numbers. But I can see different genres of advertisers coming. Coca-Cola India did significant launches with us last year. Yepme, an online fashion retailer, used Facebook and got 4.5 times returns on ad-sales dollars. Small businesses such as Pigtales and Ponys - two college students in Bangalore started this hair accessories company - leveraged Facebook and it became a business on its own," she said.

 Why Facebook is depending on India for growth as it turns 10

Reddy believes in monetisation (Image credit: Business Today)

 

Facebook has long been used as a platform to engage fans and the website is keen on further appealing to businesses and brands to come over and adopt the platform. “I know 18 months from now it will be a different media landscape and Facebook is going to be a key part of fuelling that change,” said Reddy.

 

However, Facebook seems to be facing a niggling problem that is growing by the day. Numerous reports over the past few months have hinted at the younger crowd deserting Facebook for greener pastures. The reports got a leg to stand on when Facebook CFO, David Ebersman confirmed that the website was indeed seeing a lower active usage rate from teenagers, but this was specific only to the US.

 

Teens in the US have been moving on to more private modes of communications, some even risqué ones at that. Facebook’s stumble has put more attention on apps like WhatsApp, WeChat, and most importantly, Snapchat. The apps afford them the ability to talk to their friends one on one, eliminating any risks of their messages being intercepted by parents. Elders in the family being a part of the website has turned out to be another reason why teens are seemingly deserting Facebook.

 

In India, however, Facebook is still all the rage. The website is seeing 2 million sign ups a month and a fair share of them are teenagers and young adults. However, one cannot deny that apps like WhatsApp and WeChat have also had quite an impression on youngsters in India. According to Facebook, 75 million of its 93 million users in India are on mobile while accessing Facebook. Impressive as this may sound, one quick look at app stores on iOS and Android in the country will show you that cross platform messaging apps are sniffing closely on Facebook’s heels.

 

When Zuckerberg announced last year that Facebook was truly turning into a mobile company, he knew that he was stepping into dangerous territories. The social network was coming out of its website avatar and on to smartphone browsers and apps.  Smartphone app stores are already full of applications that help connect users to each other, allows them to group chat and still maintain connections. While Facebook has had a mobile presence as a social network for the longest time, it wanted to do more in the space of communication and features, and here is where it went into mobile almost blind.

 

For Facebook, the future is in smartphone apps and the company’s announcements during the Q4 results earnings call proved it. With Paper and updates to Facebook Home and Messenger, the company is stepping its app efforts up.

The future is apps

The future is in apps

 

However, competition with the likes of WhatsApp was inevitable. Even more so in India because messaging apps are not ways to take conversation a notch down from public platforms like Facebook, but in fact an upgrade from pocket-burning SMSes. While the likes of Snapchat may take a long while before it catches up with users in India – a small subset of users are already on Snapchat in the country – cross platform messengers can and will be a competition to Facebook. Here’s where the social network could manage to keep its user base – Messenger.

 

The recent update to Messenger of iOS and Android has seen the app gain quite a bit of fan following the world over. In fact, in India currently, Messenger ranks only second to WhatsApp on the Google Play Store. Interestingly, a new app called Telegram that looks like a WhatsApp clone but claims to be safer than any other messenger is beating Facebook for Android in the social category.

 

With Paper being limited to iOS and the US for now, and Home being restricted to only high-end Android phones, Facebook has limited options when it comes to keeping its Indian user-base engaged for the next few months, with the exception of Messenger. So the 18 month period that Reddy mentions when talking about Facebook changing the media landscape in India looks like a rather difficult one from the current viewpoint.

 

Have your say. Do you think Facebook can maintain its lead as the most-used social network in India, or do you think it will lose the race to cross-platform messengers?


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