How India became Facebook’s biggest market

Facebook now has more active users in India than in the US, more than sixty per cent of them young males. But the numbers are yet to translate into revenue.
JEFF JOSEPH PAUL KADACHEENI reports

Facebook users by country

 

Last month, Facebook reported a total “potential audience” of 241 million active users from India, compared to 240 million in the US. With this, India now has the highest number of active Facebook users. So what is it about Facebook that Indians took to it with such ease? It wasn’t the first social networking site to storm India, nor the last. But it has managed to endure the competition, survive and thrive even. And do  the numbers say more?

 

What existed before Facebook?

The first to arrive on the social networking scene on a popular scale in India was the now extinct Orkut. With people moving away from Yahoo!, Gmail and Hotmail chat rooms, Orkut became one of the most visited websites in India. Launched on January 22, 2004 by Google, two weeks ahead of Facebook, it was developed as an independent project wherein Google employees used one fifth of their work hours on their pet ideas. Orkut Buyukkokten- the Turkish engineer at Google, worked on his idea which grew into Orkut.com.Inspite of its success, Orkut was just one of the many different services that Google had among bigger things.

Orkut existed in India in a period when internet access was mostly confined to internet cafes. Relatively few had access at home. The country’s middle class was still emerging. Computer and Internet were yet to become affordable. This was an India on the rise but accessibility was still distant. That was to come with the affordable mobile phones.

Facebook’s rise from obscurity in India, as also worldwide, happened during the transition period from internet cafes to broadband connections and not much later, to today’s mobile era. Facebook on its part had sorted out its priorities in time.

For one, it was focussed not just on users but also corporations and brands. Marketing was built into its core. The dull graphics of Orkut, a remnant from the previous messenger and chat room eras, also made Facebook seem a more fun looking proposition as a networking platform.

By 2009, migration to Facebook had become more than a trickle. It’s gain was soon becoming Orkut’s irreversible loss. Multiple accounts on numerous platforms were coming to an end. Privacy changes which Orkut introduced made messages become invisible which further reduced activity.

"Facebook’s rise from obscurity in India, as also worldwide, happened during the transition period from internet cafes to broadband connections"

 

By 2010, Facebook had more users than Orkut. Slowly Orkut became a ghost community with not many active users returning after using Facebook. Migration of communities led to more indirect migrations of connected people and Facebook took over completely.   Orkut’s fall to obscurity was such that when in 2014, Google announced that Orkut, which once had been a community of over 300 million people, would be shutting down, it went largely unnoticed.

All that remains of Orkut today is its founder’s letter, lovingly written, reflecting on how the world moved from love to like.

 

What made Facebook attractive?

Facebook helped sell the good life much better. This was more important for an outward looking generation taking to social media to express their identities and achievements. Its feel-good feeds encouraged everyone to showcase their perfect life. The new car, the pet dog, the cute babies at home, all became tools to satisfy the greater need for admiration. Appreciation rewarded such behaviour till it became an obsession many could not live without.

 

The Age of smartphones

Facebook’s upward tick in number of users was intertwined with the sudden and meteoric rise of smartphones with their cheap but sleek cameras. The end of the Nokia era was accentuated by an explosion of affordable options giving more and more features. Android phones made it easier for users to access Facebook. One no longer had to get back home from work or class to access it. It could be done in the middle of work, or when lectures were going on. The average age of Indians being in the tech savvy bracket of 18 to 24 years helped Facebook’s popularity grow faster. Facebook soon became an obsession to let the world know every single detail in one’s life. The selfie culture--the little camera in every mobile-- became a fixation furthered its growth.

 

The Lite versions and features

Facebook tapped into the increasing internet penetration by prioritising the need for lite versions which were easy on the data. This made accessing it cheaper. This worked well in countries like India with low internet speed. With the advent of the 3G phones, speeds started to improve and features such as  videos became more accessible.

Today, Facebook has apps for almost every feature, apart from the main app. In addition, it has been introducing ever newer features to its platform- original or many times copied from its potential competitors- in time. Facebook’s success has been in making its name synonymous with social media and for that it owes much to its marketing prowess.

 

The Marketing Network

Apart from promoting ones life, the utility of Facebook for marketing products or small businesses was also sold by Facebook. It provided services like finding an audience and ensuring engagements for those who were willing to shell out money per post or page to reach potential consumers. Those who availed these services ranged from travel websites to spoof pages. This helped Facebook enter the advertisement arena in India.

Small businesses started to realise the potential and advantages of having a Facebook page. Restaurants and cafes became popular owing to their foray into the networking space. The number of likes reflected their popularity. Soon every undertaking of some substance had a Facebook page or profile. Facebook kept pace with the developments and facilitated such use of its platform. It encouraged celebrities to join the network and this in turn brought in more people and kept interest alive. Today Facebook pages have become the official publicists for anything from a new flavoured cake in the nearby café to an upcoming movie in the distant future.

 

Online activism and Election 2014

The India Against Corruption Campaign showed India what networking on Facebook could achieve. Following in the footsteps of the Arab Spring, it gave a fresh lease of life to political activism in India. By organizing an anti-corruption campaign, the activists, many of whom are today enjoying the fruits of state power, raised their voice against the state.

The mainstream media were quick to jump on to the bandwagon given the online movement’s apparent popularity. Born out of the movement was a new political party and a new generation of party hoppers. It also resulted in overthrowing of Sheila Dikshit, until then the most popular Chief Minister of Delhi. This was followed by the 2014 Lok Sabha elections.

This became an exhibition of Facebook’s influence in India. Taking inspiration from the India Against Corruption Campaign and later the Aam Admi Party’s success in Delhi, the then Gujarat CM Narendra Modi used the platform to good use and put to work online workers who spread the good word about him. It was this pumped up online support which later led the mainstream media to paint Modi as the messiah he wasn’t. This helped sway public opinion in his favour to, first get the nomination to be the Prime Ministerial candidate of BJP and then to campaign successfully.

Though later reports suggested that much of it was artificially created by paid for PR agents, content writers and online troll volunteers, that it worked well is beyond doubt. The then ruling UPA which was far behind on the online strategy lost space and was a distant third in the narrative even behind the newly formed AAP, which gained much for a new party in terms of visibility and reach though not seats.

"An outcome of this all-male populace has been the toxicity that one has come to associate with social media"

 

The high participation in online activism and campaigning has today resulted in an online populace which is not only ill-informed but also polarized beyond reconciliation. The bhakths vs aaptards online street battles or the constant attacks on those who stand by the secular credentials as the country's founding philosophy is disturbingly evident. A big factor behind this is the composition of Facebook users in India.

 

Age and Gender Composition

 

Share of Facebook users across India as of January 2017, by age and gender (in millions) 

 

The gender and age composition of Facebook users in India reveals a definite tilt towards males in the age group of 18-24 years. Men represent three-quarters of the country’s active Facebook profiles in India. And 40 per cent of Indian users are below the age of 25.

An outcome of this all-male populace has been the toxicity that one has come to associate with social media. There are no niceties and almost everyone is rude by default. Everything is opposed or supported tooth and nail. The politicians today stand assured of an ever more gullible voter base who can be goaded into attacking their opponents by occasional nudging.

The continuous attacks on the public personalities and women in particular is an added fallout. These attacks includes those ranging from for expressing one’s opinion to even the choice of dress of a woman. In that sense, Facebook in India has accentuated parochialism and also in many ways mainstreamed it and reduced online political discussions to name calling.

 

Politics of content writers

Coming on the heels of the influence online discourse have come to occupy has been the negativity of opinion manipulators. Politics, which became a very hot topic during the 2014 election campaign which was predominantly run on Facebook and received ample support from it, is today one such point of contention.

Though the elections are over and BJP has swept to power in most states with or without electoral support and approval, the online trolls are still out there to severe heads and crucify anyone holding counter opinions. The ruling class continues to support them for the service they provide.  The Aam Admi Party which had its own dedicated volunteer trolls have now hired a PR firm for its image management online and offline.

Facebook has come to dominate political discussions and narrative. It has spawned Fake News, a feature which runs close to the polarized online discussions where facts are invented to suit arguments or political developments.  Fake videos from elsewhere have been circulated all too often over Facebook and its mobile chat service Whatsapp, leading to paranoia and tensions in the society.

Apart from these, online campaigns are being run to manipulate public opinion as also to silence critics by branding them as anti-nationals, name calling journalists as presstitutes to prevent them from covering certain no-go topics, ans so on.

Today, we have reached a point where even individuals arrested on sexual abuse cases and confined to jail, can hire  PR agents to manipulate public opinion. Everything has been reduced to a matter of image management.

 

Digital Empowerment

Which is not to say that everything associated with Facebook has been bad. It has had its numerous positive spinoffs. Today, Facebook’s influence in social and political life can be judged by the fact that most newspapers carry a separate section to cover what is popular in the social media or is going viral online. People’s reactions are sought to be gauged by tapping into online responses. Given that most of India’s online population, and hence the better off, lives on Facebook, it has in a way become the mainstay of our very national existence. Though Twitter is more crisp and news friendly, it is Facebook where the country breathes.

Facebook has on its part been very receptive to such a positive centrality and has time and again come up with innovative measures to help the people connect with each other as well as with government like it did during the Chennai floods.

It has tried to use its influence to try and change public policy in India as happened in the case of Free Basics or even to bring back contestants on reality shows. It has also been amply used as a platform for citizen journalism by users who use it to highlight public issues they face in their day to day life or to call out companies for their bad service.  Facebook has had its share of useful moments for Indians trying hard to be heard by those who matter. Public backlash has helped set things right and for this Facebook has come to play a positive role.

 

The vital question- Revenue

Source: Techcrunch.com

 

The new users of Facebook in India are the first time smartphone buyers who rely on the numerous China made smart phones for accessing Watsapp and Facebook. Over 90% users in India access Facebook on mobile. With more than a billion phone connections in India, Facebook seems assured of a growing user base unless something goes terribly wrong.

Though the user numbers suggests an upward mobility in terms of absolute figures, the fact remains that growth in the more revenue-generating developed countries is slowing. Facebook has also been gently reminding everyone not to expect high growth going forward as there is a limit up to which it can carry ads. It is here that the developing countries like India with huge growth prospects in terms of absolute numbers holds the key to its future. Better to collect a dollar from a billion than collecting $10 from a million.

Given India’s official population of 121 Crores compared to a meagre 32 Crores of USA and a relatively low social media penetration of 19% in contrast to 73% penetration in the US, and a global average of around 42%, it is thus but natural that Facebook was tilting its antennas more and more towards India. What we don’t offer in ARPU we can definitely make up in numbers.  

 

 

Facebook Subscribers in the world by region

 

This is in line with the general trend worldwide. The locus of online dominance has moved steadily towards Asia, which now accounts for 50% of all Internet users as compared to 41% in 2013. United States which in 1996 had 66% of all internet users worldwide, now falls within the 8.6% belonging to the entire North America. The shift in numbers is evident.

 

World Internet Users- 2017

 

Inspite of the impressive numbers, Facebook’s revenue from India is miniscule. Facebook posted $ 27 million (Rs 177 crore) in revenues from India, at $0.25 (Rs 16) per user, for FY16 against $ 19.2 million (Rs 123 crore) at $ 0.14 (Rs 9) per user in the previous year. This is in comparison to global Average Revenue Per User (ARPU) of $17.07 for US and Canada and worldwide average of $4.23 per user. Google posted $ 921 million (Rs 5,904) crores worth of revenues from India. Though, many don’t accept that Facebook’s revenue is thirty times lesser than Google in India, it is an established fact that revenue realization of Facebook is far less. 

Globally, Facebook reported $9.3 billion in revenue for the second quarter this year, up 45 percent from the same period last year. Profit rose to $3.9 billion, up 71 percent from last year. Compared to this Alphabet Inc., the parent company of Google, had a revenue of $26.01 billion. Out of this, revenue from the largest chunk of Alphabet's business, Google, rose to $25.8bn

Facebook’s low revenues per users in the country is attributed to its heavy spending on improving penetration in the market as well as because of Google’s better market influence owing to its early arrival on the scene as an advertisement carrier. Thus, though Facebook boasts of impressive numbers in terms of users as in the case of Facebook owned Whatsapp and Messenger, it is yet to be able to convert the numbers into revenue or to find an effective way to do so.

 

 

Free Basics by Facebook

 

Facebook’s attempt with the Free Basics initiative which would have given it monopoly in India over much more than just social media, has to be seen in this context.

That it choose to try and sell a lie packaged as a philanthropic activity is a reminder for India that it would be wise to not get too enamoured by the development that India now has the highest number of Facebook users. The Prime Minister himself had put his face and weight behind it. That the government sided with them should also be an eye opener. That also partly explains the disdain Facebook had for Indians during the Net Neutrality debate, generating support for TRAI on an important policy decision by a simple “Do you support a farmer’s right to have digital literacy or  not”! But for TRAI and the many faceless internet activists, Facebook would have had its way.

While it is all well and good for the whole of India to be on Facebook as it will mean increased digital literacy in some form or the other, India needs to be level-headed about what it actually means. Though Facebook constantly tries to sell its founder Mark Zuckerberg as a new age technological wizard, the heir apparent to Steve Jobs, whom he is all too eager to project as his mentor, one who can do only right, and want only good things for the world, one would do well to remember that Facebook generates revenue by selling user’s activity analytics for money.

For Facebook to stay alive, it might need to do much more than what it has done so far. Else it awaits the fate of Yahoo! And what it does ahead will be as critical to its users as to its own survival. At the end of the day, Facebook is a business run by a businessman who projects his simple techie image for marketing his product disguised as a community networking platform, without taking any responsibility for the fake news, live suicides and the hatred it h

 

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