Sunday, March 6, 2011

Facebook & Groupon in Japan? "It's Too Late?"

There is an old Japanese saying, "There is nothing scarier than something for free." Not understanding this saying, as well as other Japanese peculiarities, might ensure that Facebook will not be successful in Japan. There's more on Groupon below and I've written extensively on that here. Today, a Japanese user (a woman) chimes in (below).

No matter what either of these do now, they may never capture the market share they need to be more than an "also-ran" in Japan. The Japanese, especially the women, have already fallen in love with the other Social Networks like Mixi, Gree and Mobage-Town. Is it too late for Facebook?

Facebook and Groupon are the old story of a successful foreign company coming to Japan expecting that their product will be a hit without taking the time to bother with learning how the Japanese think or the quirks of an enigmatic, old country like Japan.

Japan is over 2,700 years old... Who'd a thunk it would be differ'nt from the good ol' US of A? Funny, that.

Facebook started off very slowly in Japan by not bothering to make their software more "Japanese friendly." They made the old mistake that many foreign companies make when coming to Japan; they didn't bother to learn the intricacies of the Japanese market so they lost a huge chance in this country. In Japan, having a successful debut is critical in getting sympathetic press and publicity. 

This is one of the most literate countries in the world, the press and the people have a voracious appetite for information. If you blow your debut and do not get the "fire of imagination" going immediately, then people (and press) lose interest in your very quickly. 

Big Japanese companies are backing Mixi, Gree and Mobage-Town. Big Japanese companies own mobile operators in this country. Big Japanese companies own the media and buy advertising. Mixi, Gree and Mobage-Town have about 60 million + users in Japan. Facebook has 2.93 million. You do the math.  

At the start, many Facebook functions were poorly translated into Japanese and they didn't make any sense at all to the locals. On top of that, the program wasn't mobile ready.

In a country of over 120 million cellphones users and with over 90% of those users not having a PC at home, not making your service mobile ready is a sure-fire recipe for failure. A big company like Facebook should have spent the money and time not to make these mistakes. 

             Here are some figures about the mobile market in Japan in 2008
*€10 billions (3.5 for paid content and 6.5 for the m-commerce) – 17% increase since 2008
*91.5 million people use internet through their mobile (94% through 3G)

Like I said, in Japan, if you blow your debut, that's usually "it" for you; you are through in this country. There is usually no second chance. Good examples of companies that failed by making the mistake of not understanding the Japanese market are, Pepsi, Carrefour, E-Bay, Universal Studios, just to name a few.

I think you can add Groupon to that list and, perhaps, Facebook is coming soon too.

Besides not setting up their software to be more Japanese friendly, Facebook didn't launch their software as mobile ready. That's a big, big, (well actually stupid) mistake in Japan. In Japan, 90% of all cellphone users do not have a personal computer at home. 

Facebook has finally gotten their program cellphone ready, but I think it might be too late.  Already, Mixi, Gree and Mobage-Town dominate the market. Count up the users from these three and you have almost 1/2 the population of Japan and more than 20 times the number of Facebook users in the country.

Why would the Japanese switch to Facebook? I don't think they will. Time will tell.

Not to mention all of the problems I've listed above Facebook doesn't protect people's privacy enough. I think this has to do with the American attitude towards more freedom in sex. That's fine for the west, but, still the Japanese are quiet people about their sexuality and do not seem too eager to broadcast to the world. I've written about that here before. The other Japanese Social Network systems allow the Japanese to use fake names and they do not pry into family affairs and relationships. Facebook does... In fact, Facebook does it way too much.

I recently got a letter from a Japanese woman regarding my article; Japanese People Like Their Privacy, So Facebook Will Be An Also-Ran. She says that she, too, is suspicious of Facebook. Here is her letter:

"I'm Japanese and recently I felt the same for Facebook... I completely agree to your opinion. Now many Japanese people who does not speak English have started to use Facebook and it seems like a merrymaking! But I've started to doubt how many people understand Facebook collect their personal information to sell as their products. There's a saying in Japan as "Tada yori kowai mono ha nai. (There is nothing that is scarier than for free. )

When I've started to use Facebook I thought it was really useful for me to keep in touch and find my old friends in abroad. I could actually found an Australian boy who was 5 years old when I stayed his house as the exchange student...He was there on Facebook as 35 years old man! And I found another friend I lost contact for 20 years. So Facebook has worked for me to let them know I'm still alive in Japan. Then around November of last year, many of my Japanese friends or unknown Japanese suddenly sent me the friend request. Since then they are in a merrymaking. I feel it's because of the business depression in Japan and they seems to find exit for this long business depression tunnel. But you know what behind this party in Japan on Facebook, big enterprises scrimp and save their personal information. Many Japanese magazine issues feature article how to use Facebook though there isn't mentioned about the gimmick for them. Some Japanese have started to realize it.. so it will to be toned down soon." (sic)

I think you get the gist of her message. I agree. In my experience and in my work, I know many movers and shakers. Just a few of these people have started using Facebook. It is not really a deluge at all. I've also spoken with some of them and they tell me that they do not like the personal information part and they really dislike getting messages from people to join "this cause" or "that cause."

I think they don't like these invitations because if you click them, Facebook asks if this cause can access your personal information. Aha! Once again that privacy problem occurs. 

Anyway, only time will tell about Facebook in Japan. The only thing I can tell you at this very moment in Japan is that the buzz on the street for Facebook (and Groupon) are not good...

Well, that's not fair. The jury is still out on Facebook... In Japan, no one has anything good to say about Groupon. I haven't heard a good word about Groupon yet.... Just excuses.


Ira Hata said...

Sorry, Mike.

I hope Facebook succeeds in Japan. Using fake name and avatars to socialize is simply bullshit. Facebook helped me connect with many long-lost classmates, business colleagues, and friends. I don't accept friend requests from people I don't know so there's no problem with everyone else knowing what I'm up to. I hope they succeed in Japan. The internet is full of bullshitters who are preditorial scammers looking for naive prey. Mixi, Gree, and Mobage may have their good points but, not knowing WHO is posting their opinion opens the door to a Pandora's box.

I hope Facebook finds a good leader for their Japanese offices and he transforms them to be the powerhouse they deserve to be here in Japan.

Groupon simply sucks and probably won't find a proper President for Japan. Most likely, they've hired some guy who [1] either speaks excellent English but has shit for brains or [2] a gaijin who's fooled management into thinking he can open up the Japanese market because of his (Japanese) language skills. In either case, they're doomed. Besides, my friend Christine Comaford invented the concept of Internet coupons and her original vision is more Japanese. GROUPON WILL FAIL HERE IN JAPAN, PERIOD.


Anonymous said...

Groupon has already gotten such a bad name in Japan I don't think that anyone will use them. The recruit owned company that you mentioned "Pomparade" has been advertising all over the place.
I wouldn't be surprised if Pomparade already has more users in Japan than Groupon does. I've even seen ads in trains for Pomparade.

Anonymous said...

The first comment by a FB early adopter did not seem like it was made by a Japanese person as Japanese in general tend to not use any profane language to strangers and do not want to be seen opinionated. In my opinion this person is Japanese but just not a typical one, which concludes in general nontraditional Japanese tend to favor this service or are happy with sacrificing their privacy over need for connection.
There are many signs FB cannot reach above 10% threshold in this country (the most risk avoiding country in the world) but even with the low numbers and Dentsu push, they might still be satisfied with their limited market share. In other words 3 million Japanese users can generate more revenue than 30 million Indonesian users.

mike in tokyo rogers said...

Thanks icctimes. No, you are right. The first comment was written by a person named "Ira" - that is not a Japanese name. It is an American name or western name.
I believe that the Dentsu push is not any thing really to brag about. Dentsu will push anything as long as they are paid for it.
3 million will be a failure in Japan. They'll have to do at least ten times that number.
Like, I said, only time will tell.
Thanks for your interesting comment!

Unknown said...

Interesting observations! Either Groupon will be taking over the world soon or it will have to take 2nd place to one of the other big players. Groupon’s current $25 billion pricetag is flawed for a number of reasons!
Groupon Priced at $25 Billion

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