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).

CORNELIUS BROTHERS & SISTER ROSE - IT'S TOO LATE

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.

Facebook is sidelined in Japan as social network battle heats up

By AKKY AKIMOTO / Japan Times

In July, the number of active users on social networking site Facebook worldwide surpassed 500 million. More than 60 percent of Internet users in the United States have signed up with the site, and its presence has reached into almost every country on Earth. You might think that Facebook is taking over the world . . . if you speak English.

There are, however, a few regions where Facebook has not been able to penetrate the market as it has in the West. China, Russia and South Korea have all developed their own popular variants of the idea. Japan also has its own social networking sites and the top three: Gree, Mixi and Mobage Town, are currently in a battle that has become so fierce that Facebook might not even stand a chance.

Both Mixi and Gree began in February 2004, when tech-savvy Japanese were discovering social networking site Orkut. Both Mixi and Gree aimed to come up with a Japanese version of the popular social networks sweeping the West.

Mixi was thought of as Japan's response to Friendster. It came about when Web startup E-Mercury took one of its engineers off their employment- search service Find Job and assigned him to creating Mixi. To everyone's amazement, the site grew quickly and now boasts 21 million users in its network. Also similar to Facebook, Mixi depends on advertising sales for profit — while its main competitors do not.

Mixi continues to be innovative. Last week, the company announced two new features: Mixi Check and Mixi Check-In. Mixi Check is similar to Facebook's Share feature, while Check-In is similar to Foursquare, geo-tagging a user's physical location on the site.

For five years, Mixi sat comfortably at the top of the social networking tree, but last month Gree announced it had 21.25 million registered users. That number made Gree Japan's No. 1 social network.

Gree's success indicates a particular quality of Japan's market. Mixi was the only site among the top three to have established its fame on PCs. But in July 2007, the number of page views on cell phones topped those coming from PCs, essentially moving the battlefield for social network supremacy. Gree's success on a mobile platform is seen as one of the reasons it topped Mixi. After losing to Mixi initially in 2004, many had thought Gree would disappear. Its comeback started in late 2006 after the site pretty much abandoned its unpopular PC version (it still exists but traffic is at 1 percent of its mobile version). Gree inked a deal with Japan's No. 2 cell-phone carrier, KDDI au, and created a mobile version of the site complete with what the Japanese call kajuaru gemu (casual games), simple games for cell phones, and avatars.

Gree CEO Yoshikazu Tanaka said he studied Hangame, a South Korean online game portal, for inspiration when designing Gree's mobile reincarnation. The new Gree has been hooking new users with games such as fishing and virtual pets, all of which can be played for free (but which also have content available for sale to expand the scope of the games). The gaming strategy (and a TV ad campaign) resonated with Web surfers pushed Gree to the top. Recently, the site has started adding third-party social games in addition to expanding its long list of casual games.

The game strategy is being used by Japan's No. 3 social networking site Mobage Town. The site is run by DeNA, who also run successful online auction service Bidders, and was started up in 2006. DeNA also looked to Hangame as a model for Mobage Town. Despite its late start, Mobage Town has increased its user base to 20.48 million. One key factor in its success was enabling users to earn virtual money if they clicked on advertisers' websites. The social networking service provides their own casual games as well as third-party games. The most popular game it has at the moment, "Kaitou Royal," is similar to Facebook's popular "Mafia Wars."

Similar to the characters in "Mafia Wars," Japan's social networking sites are in a fierce competition for turf. DeNA is working with Japan's biggest website, Yahoo! Japan, to open Yahoo! Mobage, which is set to bring Mobage Town to Yahoo! Japan users. Both Mobage Town and Gree are spending copious amounts of money on TV advertising, even outdoing Toyota and Coca-Cola. The companies behind the two sites are also involved in a hiring competition, providing some workers with a maximum ¥2 million one-time bonus.

Where is all this cash coming from? While Mixi's prime source of income is advertising revenues, Gree and Mobage Town directly sell virtual items to their users. Their way of selling such items is different to the way Apple's App Store works. When purchasing something for the iPhone, customers are billed separately, which means they are able to see the charges on their credit card bill. With Gree and Mobage Town, most purchases made are folded into the user's telephone bills — essentially making them less noticeable. This approach has paid off, literally, for both companies and they have been able to lower their advertising prices in response, putting more pressure on Mixi.

However, a DeNA employee appeared at a Mixi conference last week saying Mobage Town and Mixi's services don't overlap and that some cooperation is possible. DeNA CEO Tomoko Namba has also set her target on Sony and Nintendo, hinting that they were old news. DeNA seems to be adapting a line of "you're with us or you're against us," and has reportedly told video-game developers that if they want to sell on Mobage Town, they shouldn't try to sell on Gree as well. The company has not confirmed this.

At its conference, Mixi also announced a partnership with China's Renren and South Korea's Cyworld. Initially, the three will standardize their platforms to allow third-party application providers (which Mixi calls SAPs) to run on the three social networking sites. This strategy is primarily against Facebook. It would be surprising if something big, such as a merger or an inter-platform networking feature, comes of it. This kind of thing, though, does appeal to domestic users. Facebook's global reach has been impressive, but its localization (especially in Asian countries) has been subpar. If Asia's social networking sites can step in and give the image of being able to network internationally, that could be enough to get users interested. However, seeing the approaching ceiling of the Japanese market must have Mixi, DeNA and Gree looking to expand. Indeed, DeNA and Gree could use their profits to grow overseas. With Facebook retaining a possible monopoly in the West, it could be that Japan's social networks see Asia as their best bet to form a challenge against the online behemoth.

Akky Akimoto writes for Asiajin.com, which is planning readers meetups in Singapore on Sept. 25, and Tokyo on Oct. 9. For details, visit asiajin.com. A Japanese version of this article is available on Akky Akimoto's blog at akimoto.jp


From Japan Times