Last week Facebook announced its end of year results for 2014 and these reinforced the need for the social giant to find new markets to expand into in order to continue its global growth.

For some time now, Facebook’s figures have shown that it’s reaching saturation point in the US and many other ‘Western’ markets, for example of the estimated 353 million people in North America there are already 208m monthly users on Facebook – with growth over the last 2 years stalling to less than 8%.

While there’s still clearly room for growth in markets like the US, it’s clearly nowhere near the exhilarating rate the company has enjoyed in its relatively short life to date. Therefore, it’s no surprise that Facebook is turning its attention to new markets to find its next billion users and these regions are already showing potential – with usage in Asia Pacific increasing by 43% over the last 2 years and ‘Rest of the World’ by 51%

However, with new markets come new challenges. Facebook is tackling the issues of device diversity and connection speeds with the recent launch of its ‘Lite’ app, but to become truly ubiquitous the business will also have to be careful not to alienate new users by failing to cater to local nuance. According to research commissioned from Ovum polling a representative sample of 4,504 consumers in Brazil, China, India, Nigeria and Vietnam – part of a report entitled The Next Mobile Frontier – the big risk for brands in these new territories is alienating new users by failing to cater to local nuance. Consumers from these markets praised local brands, for example 78% liked the fact these brands use local language or dialect and 76% because they use cultural references.

Over and above this, emerging market consumers also want a more representative payment facility for the content and services they buy on their mobile. The App Store model does not really work for a number of consumers in these markets who would need banking facilities to access the content. This is a big stumbling block given the low penetration of financial services (credit and debit cards) in regions such as sub-Saharan Africa. Data from the Worldbank shows that the US has a penetration of 72% whereas Nigeria has 19% and Ghana only 11%.

It makes perfect sense for Facebook to be looking at new markets to capitalise on growth opportunities and while Facebook is heading in the right direction in providing the right technology for emerging market consumers, it will have to be careful to provide the right content if it wants to become a truly global social network.

 

By Marco Veremis, founder & CEO at Upstream

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