Facebook India’s Contribution To Global Revenue Tells Something About The Industry

For a country that drives 8.2% of Facebook’s userbase, the revenue contribution is negligible (0.29%)
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Facebook recently announced its quarterly numbers and while the company is growing at an impressive rate (revenue jumped 61% as compared to same quarter last year), Facebook now has 1.32 Billion users across the globe. The India userbase stands at 108 million.

Facebook India Growth

Facebook India has grown phenomenally well (in terms of number of users), but revenue wise the company hasn’t really done great.

Take a look:

Facebook India Contribution To Global Revenue
Facebook India Contribution To Global Revenue

Facebook Global Revenue : $2.91 billion (April-June period), out of which $2.68Bn came from advertising.
Facebook India Revenue :  Rs.75.7 crore for the year ended March 2013 [Via]. Since India hasn’t yet filed 2014 numbers, we made an assumption that they have crossed INR 200 Cr revenue (for year ending March 2014) and that translates to ~8mn/quarter.

India’s Contribution to Facbook

For a country that drives 8.2% of Facebook’s userbase, the revenue contribution is negligible (0.29%). Ofcourse, Facebook has just started to invest in India sales team (FYI: Google India revenues for FY ending March 2013 was $346mn), but the truth is that digital advertising and media business has been tough to crack and will get tougher once service tax regime comes into the picture.

Mark Zuckerberg Dancing @Indian Wedding
Stop Dancing, Mark Zuckerberg !

Facebook India’s lack of monetizaion sucess also showcases the big challenges Indian digital companies are facing – i.e .of scale. Scale is being achieved in userbase ( more than 200 mn users?), but revenue scale is a mirage. Brand managers (still) look at digital as a medium which will give them RoI, while they continue to splurge on print and TV.

Apart from low eCPM rates, rise of mobile browsing is also not helping increase the advertising pie (and clicks) – there are ver few (mobile) ad networks in the country who can claim to have a respectable fill rate. But we leave that discussion to another day.

You tell us : where is money in India’s digital space? Is it all about CPAs (and that’s why Facebook is experimenting with missed call ads)?

At a fundamental level, is it worth the effort?

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