India is expected to overtake U.S. in terms of number of Facebook users by 2015. According to a report by research and advisory firm Gartner, growth in internet penetration and mobile connections in the next 2-3 years will cause a signficant escalation in the number of people on Facebook.
India currently has 51 million Facebook users, far behind the U.S. at 169 million users. However, India’s 120 million internet users are expected to grow to 400 million by the end of 2015, and by this time is expected to have surpassed the U.S. Facebook numbers. This is a reasonable prediction to make, given that India’s Facebook users have doubled in the last one year, whereas the growth in U.S. users has been only 15% – most people in the U.S. already are on Facebook now.
Mobile is expected to drive this increase in India, as smartphones in the market are now being priced at rates that are affordable for a large section of people – as low as INR 5000 – and data plans available for cheap daily rates. Additionally, India’s young population base means that each year a very large number of teenagers become eligible to sign up for Facebook – 13 years being the minimum age.
Facebook, for its part, is also doing a great deal to encourage mobile social networking, with the recent launch of the ‘Facebook for Every Phone‘ application, which is available in seven local Indian languages - Gujarati, Tamil, Malayalam, Kannada, Punjabi, Bengali and Marathi, in addition to Hindi, which has been available for a year.
However, slow internet speeds are still a problem in India, with 3G networks being erratic, and there is a need to better the infrastructure in order to capitalise on this scope for growth.
The biggest challenge, though, for Facebook, not just in India but in other Asian markets as well, is to ensure that advertising revenues also grow at a similar explosive rate as the number of users.
“The importance of Asia to Facebook is huge; it has the largest population, but its actual financial importance is smaller,” said Thomas Crampton, Ogilvy & Mather Asia-Pacific Director for Social Media. “A U.S. user is almost 10 times more valuable.”
The future for Facebook lies in being able to monetise this large user base, and make the Indian user as valuable. Facebook is just a few hours away from the sale of its first share, and a lot is at stake. It remains to be seen how becoming public domain impacts Facebook, and all its stakeholders.