Facebook has been eager to enter the Chinese market for a long time and it is obvious why they would want to do it. China is the most populous country with over 500 million internet users, but Facebook has not been able to enter their market because of the strict censorship laws in China. Just recently, in Facebook’s IPO filing they once again relayed the message that they are eager to enter China, but, “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.” Facebook goes on and explain that they will also face strong competition from existing social media companies such as Renren, Sina, and Tencent.
Facebook still continues to assess China as a possibility. In fact, Zuckerberg is learning Mandrin Chinese . In the end, Facebook wants to ensure that they execute their plan in a way that will provided them with significant flexibility. Facebook management said regarding this topic, “this market has substantial legal and regulatory complexities that have prevented our entry into China to date. If we fail to deploy or manage our operations in international markets successfully, our business may suffer.”
Instead, Facebook is instead focusing their efforts on India, Russia, South Korea, and Japan. They believe they will be successful in these countries because of increases in broadband networks and mobile devices. Despite the positive talk, Facebook may be facing an uphill battle in these countries because their current penetration is rather shallow. India’s is the highest, at between 20-30%, and Russia, South Korea, and Japan’s penetration rate is less that 15% each. Facebook will also be confronting rivalry pressures from existing social media companies that are more established in those countries.
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