The Growth Of Facebook Inc. (FB) In Emerging Markets Is Really Disappointing !

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Due to accelerated social media adoption by internet users, many contemporaries, like Facebook Inc. (NASDAQ:FB), Twitter Inc. (NYSE:TWTR), in the arena are expanding their realms to different parts of the globe. In the last two to three years many social media sites have shifted their focus towards the emerging markets of APAC and Europe regions. Front runners like Facebook, Twitter and LinkedIn remain successful to an extent in increasing their user base in developing countries, but the slow growth of ARPU (Average Revenue Per User) in these countries is still a matter of concern for online networking giants.

The social media titan, Facebook was pretty much admired and embraced by internet users of APAC regions. But, the revenue derived from these countries is much lesser compared to developed nations. Average revenue per user in the US and Canada has surged up to nearly $6.44 whereas in Asia it is barely above a dollar ($1.08)

Average Revenue Per User From Asia Is Barely 48% Of World Average

If we analyze Facebook’s user base growth from emerging Asia markets, Quarter over quarter growth has been quite decent. At the end of Q2, 2012 there were mere 255 million users networking via Facebook and in Q2, 2013 this number rose up to 339 million. Currently, the figure stands at 410 million, an increment of 20.9% compared to the same period last year.


In parallel to user base growth if we analyze revenue per user obtained from the region the figure recorded were quite disappointing. In the last four quarters, ARPU for Facebook from Asia is as follows – $0.81, $0.95, $0.93 and $1.08. Whereas, in developed states of the US and Canada, recorded figures were $4.85 (499%), $6.03 (535%), $5.85 (529%) and $6.44 (496%) in the same period as above.

facebook ARPU Q2 2014

Facebook is failing to translate its success story of spiking user growth into revenue dollars. Marketers from emerging markets are very well aware of Facebook’s potential in advertising arena, but very few of them opt for paid ad offerings. Nearly 9 out of 10 small-medium businesses plan to invest in social media marketing but major share of this investment goes into managing the Facebook page rather than subscription for networking giant’s paid products.

More than 30 million business pages battle amongst themselves to engage over 1.3 billion Facebook users. Facebook’s recent news feed revamp is one of the likely reasons for advertiser’s hindrance towards paid ads. Advertisers are concerned over the reach of their paid ads amidst the tough competition between news feed posts to climb to the top of the users main feed. Rise in price of paid products by over 123% in last 1 year has resulted in a great deal of repulsion towards blue giant’s paid offerings.

Is Facebook Blinded By Its Staggering Revenue Figures?

The social media titan has continuously broken all records of revenue figures by the stupendous year over year growth rate. Facebook had recorded revenue as high as $1.184 billion in Q2, 2012, this figure rose up to $1.813 billion in Q3 of 2012 (up by 53%) and in latest quarter (Q2, 2014) the overall revenue figure rested at staggering $2.91 billion (up by 60%). These numbers are nice to hear when looked from overall growth prospective but if we deep dive into the geographical regions from which Facebook is earning, the results obtained are not encouraging.

In Africa, the user tally recently crossed 100 million but in terms of monetization it is still not in the news as ARPU for the rest of the world (including Africa) is mere $0.86. In Europe ARPU was slightly higher than the world average ($2.24) at $2.84. Zuckerberg, who masterminded to bring the entire internet population to Facebook, has failed to convert the increasing user base to revenue dollars.


Facebook has brought in video ads and lot more initiatives to boost its revenue growth. It is not just battling Twitter or other social networking sites, but also YouTube, Media firms, messaging apps and lot more by innovating various products. Nevertheless, these efforts will make a very significant addition to its money bag, but in the long run, social media titan definitely needs to work out to drive even distribution of revenue across the globe.

All said and done, all the above statistics clearly highlights that Facebook is failing to bring in more paid customers. While US and Europe is stagnating for Facebook, ASIA and Africa remain the only bucket Facebook could look into for its future market penetration. However, the not-so-lucrative revenue growth of the these regions could make investors furious in the long run.


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