Facebook: India to overtake US as country with most users

Updated 11 March 2014
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Facebook: India to overtake US as country with most users

MUMBAI: As Facebook celebrates its 10th birthday, one of its biggest challenges is to tap the mobile market in emerging Asian economies, where it can drive expansion after growth in the West tapers off.
India is expected to overtake the US as the country with most Facebook users in 2014, with its total number forecast to surge beyond the 150 million mark from the current 93 million level.
But despite its rapid growth in parts of Asia, experts say Facebook cannot afford to be complacent and locally-tailored competitors are threatening to steal its thunder in countries such as Indonesia.
With Internet penetration still relatively low in Asia's emerging economies, many people's first online experience comes when they log on with a mobile phone.
Kevin D'Souza, Facebook India's head of growth and mobile partnerships, says the key to success in emerging markets therefore depends on encouraging access via basic mobiles known as "feature phones".
"We're already seeing the majority of users sign up to Facebook on mobile devices," D'Souza said.
"A large chunk of mobile phone users in India are feature phone users, and with low price points, these devices are becoming the first Internet connected device many people will own."
He said more than 100 million people globally are now using the "Facebook for Every Phone" app specifically for non-smartphones and many of the next billion users Facebook hopes to attract are expected to do the same.
The Nokia Asha 501 feature phone now comes preloaded with Facebook, while India's telecom giant Bharti Airtel announced last month that it would offer free Facebook access in nine local languages to prepaid customers.
In India, more than 40 percent of the 1.2 billion population have cell phones but barely five percent are smartphone users, according to estimates by consultancy Analysys Mason.
Nevertheless, researchers at eMarketer predict India will reach 152.4 million Facebook users this year, surpassing the 151.1 million forecast for the US.
The growing importance of mobile Internet access was demonstrated with Facebook's strong earnings released last week.
Advertising revenue surged to $2.34 billion in the quarter, up 76 percent over the past year, and more than 53 percent of that figure was mobile advertising revenue — up from 23 percent in the fourth quarter of 2012.
"2013 was the year we turned our business into a mobile business," said boss Mark Zuckerberg, who began the company as a student a decade ago, since when it has swelled to attract 1.23 billion active users worldwide.
Aakrit Vaish, a founder of mobile company Haptik, said it was not just the sheer population size that made India such a big Facebook player.
"Culturally in our country we have always been, for better or worse, very inquiring about other people's lives," he said.
He believes an additional benefit for Facebook in India has been the prominence of English speaking among the urban elite, who were the first to get access to the social network.
The same is true of the Philippines, where more than one in three people are on Facebook according to marketing agency We Are Social whose data shows the country spending more hours per day on social media than anywhere else in Asia.
Facebook has overtaken mobile text messaging as a key communication tool, also embraced by Philippine politicians and activists -- President Benigno Aquino's Facebook page has more than three million "likes".
Protesters last year used the network to vent anger over the misuse of state funds by lawmakers, snowballing into a mass rally in Manila in August.
But experts say that Facebook's dominance in some Asian markets faces a threat from competitors who are adapting to local tastes.
With Facebook banned from China since 2009, Indonesia has the second largest number of users in Asia, with around 65 million.
But youngsters are also active on Indonesian-made social media such as Kaskus, while US-based social network FourSquare and China's WeChat have launched popular Indonesian versions of their platforms.
"Nothing works better than making something local," market research firm Roy Morgan Asia director Debnath Guharoy said.
"It has the vernacular, the slang. Anyone who does that successfully will get a lot of traction."
MindTalk, a colourful Indonesian forum set up in 2012 which groups users by interests such as sport, celebrity and travel, has attracted around 500,000 users and is growing by about 10 percent each month.
"Facebook's Indonesian user base will keep growing as more people get online, but young people will probably spend less time on it because there are so many alternatives," said Rama Mamuaya, founder of the Indonesian tech blog DailySocial.
Indian student Dewika Bhagwat, 17, said she used to avidly post updates on the computers at school, but now she and her friends have smartphones, they prefer to keep in touch via the instant messaging service WhatsApp.
"Because all our parents have opened Facebook accounts, it's not that fun anymore," she said.


Foreign investors hope India dials back policy shocks after Modi win

Updated 24 May 2019
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Foreign investors hope India dials back policy shocks after Modi win

  • Modi’s pro-business image and India’s youthful population have lured foreign investors
  • After Modi’s win, about a dozen officials of foreign companies in India and their advisers said they hoped he would ease his stance and dilute some of the policies

NEW DELHI: Foreign companies in India have welcomed Prime Minister Narendra Modi’s election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year.
Modi’s pro-business image and India’s youthful population have lured foreign investors, with US firms such as Amazon.com , Walmart and Mastercard committing billions of dollars in investments and ramping up hiring.
India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp.
But from around 2017, critics say, the Hindu nationalist leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervor ahead of elections.

Opinion

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“I hope he’s now back to wooing businesses,” said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms.
“Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors.”
India stuck to its policies despite protests and aggressive lobbying by the United States government, US-India trade bodies and companies themselves.
Small hurdles
Modi was set to hold talks on Friday to form a new cabinet after election panel data showed his Bharatiya Janata Party had won 302 of the 542 seats at stake and was leading in one more, up from the 282 it won in 2014.
After Modi’s win, about a dozen officials of foreign companies in India and their advisers told Reuters they hoped he would ease his stance and dilute some of the policies.
Other investors hope the government will avoid sudden policy changes on investment and regulation that catch them off guard and prove very costly, urging instead industry-wide consultation that permits time to prepare.
Protectionism concerns “are small hurdles you have to go through,” however, said Prem Watsa, the chairman of Canadian diversified investment firm Fairfax Financial, which has investments of $5 billion in India.
“There will be more business-friendly policies and more private enterprise coming into India,” he told Reuters in an interview.
Tech, healthcare and beyond
Among the firms looking for more friendly steps are global payments companies that had benefited since 2016 from Modi’s push for electronic payments instead of cash.
Last year, however, firms such as Mastercard and Visa were asked to store more of their data in India, to allow “unfettered supervisory access,” a change that prompted WhatsApp to delay plans for a payments service.
Modi’s government has also drafted a law to clamp similar stringent data norms on the entire sector.
But abrupt changes to rules on foreign investment in e-commerce stoked alarm at firms such as Amazon, which saw India operations disrupted briefly in February, and Walmart, just months after it invested $16 billion in India’s Flipkart.
Policy changes also hurt foreign players in the $5-billion medical device industry, such as Abbott Laboratories, Boston Scientific and Johnson & Johnson, following 2017 price caps on products such as heart stents and knee implants.
Modi’s government said the move aimed to help poor patients and curb profiteering, but the US government and lobby groups said it harmed innovation, profits and investment plans.
“If foreign companies see their future in this country on a long-term basis...they will have to look at the interests of the people,” Ashwani MaHajjan, an official of a nationalist group that pushed for some of the measures, told Reuters.
That view was echoed this week by two policymakers who said government policies will focus on strengthening India’s own companies, while providing foreign players with adequate opportunities for growth.
Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one offical of a US tech firm saying, “I’d rather be more worried than be optimistic.”