Topic: Emerging markets
I don’t usually cover the Indian market in depth here, but Jio feels like one of those stories that more people outside of India need to know about. It’s part of one of the big Indian conglomerates, Reliance Industries, and launched public LTE-only mobile services in September last year, signing up 125 million customers since then, an unprecedented rate of growth for any mobile operator anywhere. Until now, that service was available only on smartphones, either compatible devices customers brought with them or those sold by Jio. But today, Jio announced its own VoLTE-capable feature phone, which it will offer for free (albeit with a 1500 rupee – $23 – refundable security deposit) starting next month, with an unlimited voice, text and data plan for 153 rupees ($2) per month. What Jio has done in India over the past year or so is one of those things that just doesn’t seem like it should be possible – massive customer growth from zero, while offering fairly leading edge technology in devices and its network. The big enabler is that Jio is part of that massive conglomerate, which makes lots of money from the petroleum industry and therefore doesn’t need Jio to be profitable, at least not yet. In addition, although Jio touts its broad coverage (and promises to cover 99% of the population shortly), my understanding is that the coverage can be unreliable and some users are deploying it as a second-SIM solution rather than their only option. A lack of network density is likely the big problem, offering nominal coverage across a wide area but offering spotty coverage within that area in practice. But it’s been disruptive nonetheless, providing access to 4G and smartphones for those who previously hadn’t taken the plunge, and the new feature phone is going to extend 4G and some basic data services to a far larger number.
Instagram Launches Uploads From Mobile Web (May 8, 2017)
Facebook Expands Paid WiFi Access Product to India (May 4, 2017)
Facebook Expands Messenger Lite to 150 More Countries (Apr 27, 2017)
Facebook Lite has been a critical element of Facebook’s recent growth, so pushing the Lite version of Messenger to more countries is a key priority too, since it’s only been in a handful of countries so far. Some of these 150 new countries are the emerging markets where the product is particularly useful because of bandwidth constraints and costs, but also included are mature markets like Germany, Japan, and the Netherlands, though not the US as far as I can tell. This should help keep the growth in Messenger going for a good while longer, because emerging markets are going to make up an increasingly proportion of user growth at Facebook going forward.
A little while back, Facebook announced that it had 200 million users for its Facebook Lite product, which provides a more streamlined experience for those on limited wireless data connections, representing over 10% of its total monthly active users. Emerging markets have been really important for Facebook over the last few years, driving a good chunk of its user growth. Twitter, meanwhile, hasn’t had a product optimized for those markets, and has struggled to grow its base much at all. Today, it’s announcing its own Lite product, which is actually a progressive web app designed in partnership with Google, which has been pushing this format as one of several approaches to hybrid web/native apps. As a PWA, Twitter Lite offers some features historically reserved for native apps, like local storage and notifications, and Twitter seems to be promoting it as the option for users in emerging markets, touting the circumvention of app stores as a feature. All this should help Twitter do better with growth in emerging markets, as it’s been a long time coming and there should be at least some pent-up demand there. But it’s also a great validation for the PWA approach at Google, with a big name app out there for the first time to promote the concept. It’ll be well worth watching Google’s I/O this year for signs that it’s continuing to move the concept forward.
via Twitter Blogs
The first part of this article gives too much credence to Xiaomi’s CEO’s projections about its future growth, taking them as given even though Xiaomi has struggled to meet its targets for smartphone shipments and growth for the last several years. But the rest of the article is interesting for what it says about where Xiaomi’s focus will be geographically going forward. Importantly, whereas one of the biggest questions about Xiaomi in recent years has been when it would come to the US, it seems to be moving in the opposite direction, doubling down on emerging markets like India rather than pushing into more mature markets. That will limit both its overall addressable market and the average selling price of its phones, given the disposable incomes in those markets and its product focus there, so Xiaomi’s future certainly won’t look very much like the one it projected a number of years ago, as a premium Android-based alternative to the iPhone.
Microsoft launches Skype Lite Android app for India and other emerging markets – TechCrunch (Feb 22, 2017)
This looks like a great bit of innovation from Microsoft – both well customized for a local market and the first really compelling implementation of its bot strategy that I’ve seen. Facebook has been doing well for a while with its Lite offerings, which have expanded its reach in emerging markets, and this Skype version seems to offer some of the same benefits. The future integration with the government identity scheme sounds particularly interesting. There’s obviously strong competition in India for the services Skype provides, many of which already cater for users with limited bandwidth, and Microsoft continues to struggle to monetize its consumer efforts including Skype, but it’s great to see it innovating in this very localized way.
I think the framing here is exactly right – this is part of the broader crackdown at Alphabet on some of its longer-term and less financially viable projects. The new approach – targeting balloons at specific regions rather than trying to blanket the globe – always seemed like the more obvious way to go, but of course balloons are inherently hard to navigate, so I’m intrigued to know how they will manage that. Two big questions remain: firstly, whether Internet access delivered from the sky can ever be really good (see existing satellite-based Internet access, which tends to be slow and bandwidth limited), and whether Alphabet should be in the access business at all (see also yesterday’s Google Fiber item). At least it sounds like this particular project might generate revenues sooner rather than later (and eventually even profits!) but it’s still not clear that it’s going to benefit the core Google business much.
On Facebook’s earnings call recently, it was asked what drove recent stellar growth in Asia (133 million new MAUs year on year, and 28 million DAUs quarter on quarter), and answered that there were three drivers: Internet.org, Android improvements including Facebook Lite, and third party promotional free data plans in places like India, which was the strongest single growth market. Internet.org actually only accounts for a small amount of growth – the last update the company provided was 40 million total users back in November 2016, so although it’s a high profile project for the company it’s not that significant. But today Facebook announced that Facebook Lite has 200 million users, which is over 10% of its total MAUs, and over a quarter of its combined Asia and Rest of World users, which is the vast majority of the target base. So this is the real success story here, and it’s just about making the app more bandwidth efficient for emerging markets, not about zero rating. Now, obviously those 200 million aren’t all incremental new users for Facebook – some will have switched from using the regular app – but this is a big growth driver for Facebook. Also worth noting is that all those three growth drivers are about either bandwidth efficiency or paying less (or nothing) for the same bandwidth – this is the single biggest factor in Facebook’s growth in emerging markets.
This is a good overview of how the international part of Xiaomi’s business fared over the last several years, while Hugo Barra was in charge, and it argues that Xiaomi’s progress during that time was limited to some countries and mostly symbolic elsewhere – gaining mind share but not market share. And of course, it still hasn’t fully launched in the US, which can be considered the biggest failure of Barra’s leadership of the international business, with the company’s first big CES press conference one of his last official actions in the role.
The Flash app is yet another attempt by Facebook to recreate some of Snapchat’s features in one of its own apps, and appears to be building off the more successful cloning the company has been doing in 2016. This one is specifically focused on emerging markets, where Snapchat doesn’t have nearly the audience it does in mature markets (or nearly the audience Facebook does). It’s also yet another example of putting the camera at the forefront of the Facebook experience.