Can You Name Facebook’s Largest Market?

Facebook’s most important market in terms of revenues is the US, at 44% of total as of 2017.

When it comes to users, however, India is the company’s biggest market with 270 million users to the US’s 240 million. Rounding out the Top 10:

The idea for this factoid came from a recent article in The Economist about the differences in growth strategies between American and Chinese tech companies as they start to compete head-to-head in emerging markets. Facebook and other US firms offer similar services to those in developed markets. Chinese companies, by contrast, tend to partner with local tech businesses or buy operations and leave the local name unchanged.

Some examples of each approach, also from the article:

  • Amazon has pledged $5 billion to build out its offering in India along the same lines as what it offers in the US. From warehouses to Prime Video, it’s all there.
  • Google users around the world all use the same Chrome browser, YouTube website and Android smartphone operating system.
  • Alibaba, by contrast, goes to market as Paytm and BigBasket in India, Tokopedia in Indonesia, and Daraz in Pakistan. The commercial ties to each range from minority stakes to outright ownership.

Why the differences? American tech companies tend to focus on scalable businesses like advertising and streaming video. Chinese enterprises do the opposite, developing logistics and payments solutions that by necessity are country-specific.

What all this means to investors: if you ask most Tech analysts whether they favor the US or Chinese model of business development, they will likely hedge. “Chinese companies will dominate China and the US firms will hold America and Europe” is the most common answer. This ignores more than half the global population and much of the potential economic growth over the next generation.

In the end, Amazon/Alibaba/Google/Tencent do have one thing in common: very high stock valuations. How they grow their emerging markets businesses will play an outsized role in showing which companies have truly scalable competitive advantages. Not only are such markets ideal test beds, but they also happen to be where the next phase of global economic and technology usage growth will occur.

Article from The Economist: https://www.economist.com/business/2018/07/07/chinese-and-us-tech-giants-go-at-it-in-emerging-markets

Interesting Image
 
Start Your 2-Week (no credit card) FREE Trial! 
 
 
*BY CLICKING SUBMIT, YOU AGREE THAT YOU HAVE READ AND UNDERSTAND OUR TERMS OF SERVICE, SUBSCRIPTION AGREEMENT, AND PRIVACY POLICY, AND HEREBY AGREE TO BE BOUND BY THEM.