Facebook’s foreign foes: five countries to conquer for new growth

After growth slowed just in time for its IPO, Facebook must look overseas for a jump-start.

Target countries are easy to see. ”Now there are only five markets where Facebook is not the #1 social networking site,” a comScore spokesperson tells paidContent.

But cultural differences, government restrictions and incumbent local rivals will all make Facebook’s growth challenging. (Check out our broader take on Facebook’s international ambitions here.)

Here is our map for Mark Zuckerberg’s overseas adventure. Cool countries are those with already-high Facebook penetration, hotspots are thosse Facebook must crack to become a true global powerhouse…

1. China
”near 0% penetration”. Growth prospects: Poor — Zuckerberg can’t comply with online state censorship
#1	Tencent Qzone	Built on Tencent’s QQ IM network, Qzone lets users buy a 10-yuan-a-month “Canary Diamond” to decorate their zones with.
#2	Sina Weibo	Hit 300 million microblog users by delighting citizens with open info sharing. Now ready to introduce ads.
#3	RenRen	Billed itself as China’s “leading real-name” social net; now new regulations require all network customers use their real names.
The People’s Republic is the big prize. If it could piggyback China’s explosive broadband and mobile internet adoption, Facebook’s own growth would rocket. But that will be anything but easy. Currently blocked by China, the site claims ”near 0% penetration” there. It warned IPO filing readers: “We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government. In the event that access to Facebook is restricted, in whole or in part, in one or more countries or our competitors are able to successfully penetrate geographic markets that we cannot access, our ability to retain or increase our user base and user engagement may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected.”That’s the reality of it. One problem for Facebook is China’s state authorities, which grant spartan online operating licenses to overseas players, especially powerhouses like Facebook. Another is the increasingly powerful indigenous players to which the market has been left. Social network growth has exploded, but most of the operators are native incumbent portals, with eye-popping user counts. Succeeding social networks, the rise of weibos (Twitter-esque microblog services) has gained mindshare for allowing quick dissemination of information in the country notorious for restricting information flow.But the Chinese market is also in flux. Local services complied with new regulations compelling them to remove apparently false and controversial information, and to force users to use their real names.Will Facebook controversially kowtow to measures Silicon Valley and Wall Street might find reprehensible? If so, it could be the easiest move it would make in China – the country has been the rocks on which many a western company has floundered. But consenting to Chinese restrictions on online free speech would be utterly at odds with Zuckerberg’s open ethos – so let’s continue to consider China off-limits.
2. Russia
21.2% of online population (comScore, March 2012). Growth prospects: Very good — Already gained good toe-hold.
#1	VK.com	Russia’s fourth-most-used website has around 120 million accounts, is popular (and controversial) for its integrated file-sharing – and bears striking resemblance to Facebook.
#2	Odnoklassniki	Russia’s Classmates site puts a Facebook shareholder in an awkward position – DST owns it.
#3	Facebook	Has grown fast since launching in Russia in early 2010.
Russians are the world’s most prolific social network users, according to comScore. Facebook has already grown fast there. The country puts the site in a strange position, since two competitors (Odnoklassniki and Mail.ru’s MyWorld) are backed by Facebook investor DST. Now that DST has exited through Facebook’s IPO, however, the stage is set for a clean fight. “The figures suggest that local social networks will not be able to hold onto their dominance much longer,” eMarketer said in February. “The real question may not be whether Facebook will overtake local social networks there, but when.” Market leader vKontakte’s popularity may decline if it complies with a court ruling that it breaches copyright by removing its file-sharing feature.
3. South Korea
27.2% of online population (comScore, March 2012). Growth prospects: Very good – Already hurting competition.
#1	Cyworld	Tried and failed to enter the U.S. and Europe but this isometric 3D chat world succeeds at selling virtual goods to users.
#2	Me2day	This local Korean microblog service, operated by the Naver portal, is popular with celebrities.
#3	Facebook	Its monthly users doubled to 12 million in 2011, Korea Herald reported.
In the country that has been enjoying high-speed fixed and mobile services for years, Cyworld has locked up mindshare since 1999. But Facebook is poised for big gains – last year, it robbed Cyworld of members, prompting the incumbent to invoke a corporate revamp to fight back, Korea Herald reported.
4. Japan
23.4% of online population (comScore, March 2012). Growth prospects: Moderate – Zuck must beat the Tweet.
#1	Twitter	Guess who? Japan’s top social network is Facebook’s Silicon Valley sparring partner, whose first non-English endeavour has paid dividends.
#2	Mixi	The site has gained a strong local mindshare by founding early, in 2000.
#3	Facebook	Japanese user base grew by 78 percent through 2011.
After Twitter overtook local network Mixi, Japan is a “Twitter nation”. There, successive global records have been broken for tweets-per-minute, despite Twitter being predominantly an English-language medium. So Facebook will have to fight its domestic competitor on foreign turf.
5. Vietnam
37.8% of online population (comScore, March 2012). Growth prospects: Uncertain – To block or not to block?
#1	ZingMe	A focus on games has given the native site the lead.
#2	Go.vn	This Facebook rival is some competitor – operated by state-owned Vietnam Media Corp.
#3	Facebook	Has apparently suffered from censorship after earlier growth.
Facebook has been blocked in Vietnam since 2009, but many citizens circumvent it with a few clicks, The Economist reports. The communist government’s on-off embrace of social networks comes against a backdrop requiring their compliance with censorship laws. Confusion reigns.