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.

Japanese People Like Privacy So Facebook Will Always Be an Also-Ran

As I wrote long ago, I seriously doubt Facebook can surpass Mixi or Gree in Japan. The Japanese like their privacy and Facebook doesn't address these concerns nearly enough. 


I suspect that if Facebook cannot dethroned either, it will be a failure in this country.


Actually, with how much of a problem hacking and stealing identities is these days, I am amazed at just how many people in the west put up so much personal information on Facebook.

Once again, I have found a recent article that supports my beliefs about Facebook not becoming number one in Japan and how the can't do so as the cultural differences are too great.


Let's face it, Mixi and Gree were made in Japan, they completely understand the Japanese psyche. Facebook doesn't. Also, one of Facebook's biggest sales points is that it let's you connect with people overseas. That is not a big point of appeal to the Japanese. 


Bloomberg reports:

Facebook Inc. may not overtake Mixi Inc. in Japan as the lure of connecting with friends overseas isn’t enough for users to switch services, according to the U.S. social-networking site’s biggest games developer.

Japan “is one place where Facebook may not end up being dominant,” Robert Goldberg, head of Zynga Game Network Inc.’s operations in the country, said in an interview in Tokyo. 

According to Nikkeisha research, only 3% of the Japanese public can converse in English. This is a huge reason why reconnecting with people in foreign countries doesn't really appeal to the Japanese; they can't communicate.

I think it is possible that Facebook could actually be a failure in Japan much like Pepsi-cola or Universal Studios. The article continues:

Mixi is better suited for Japanese users because it gives subscribers more control over who sees their content and personal data is more secure, President Kenji Kasahara said in an interview on Dec. 15. Users can also send Twitter-like messages limited to 150 characters, a service that began in September 2009 and isn’t available on Facebook, Kasahara said at the time.

Masashi Tokuda, a Tokyo-based spokesman at Mixi, said the company’s stance hasn’t changed since Kasahara made the comments.

Shares of Mixi declined 5.6 percent to 428,500 yen as of 1:25 p.m. on the Tokyo Stock Exchange, compared with a 0.7 percent gain in the benchmark Nikkei 225 Stock Average. Zynga is a closely held company.

Mixi’s monthly active users, subscribers who log in at least once a month, have reached 14.5 million as of Dec. 31, the Tokyo-based company said earlier this month. That compares with Facebook’s more than 500 million users worldwide and 24.5 million for DeNA Co., Japan’s biggest developer of social games for mobile phones.

"Japan is a unique marketplace and it is necessary to take care when bringing a global product and localizing it to the Japanese culture."

Mixi and Gree allow people to use pen-names and to hide their true identities. This is important to the Japanese. 

Facebook isn't going to change 2,700 years of culture in five years. It's crazy to think that they could. Facebook doesn't protect people's privacy enough and, recently, there has been lots of junk mail and people's account's being hijacked to send junk mail out.

Like I said, they might fail here. Many big guns have in the past failed. Of the companies successful in the west that have failed in the Japanese market, the list is long; Pepsi, Universal Studio Theme Park, eBay, Vodaphone, Carrefour, Burger King and many more. The most surprising thing about this list is that, even after the failures of big players with multi-million dollar budgets, the list grows longer everyday. 

Will it include Facebook someday?

The companies who failed in Japan, failed because they couldn't comprehend just how different Japan is from the west. On the other hand, the companies who succeeded like; Disney, Coca Cola, Goldman Sachs, Yahoo and Amazon, all hired Japanese companies to handle their product/service PR for the Japanese market. 

Facebook blew it at the start in Japan by not correctly localizing their service and they also lost 2 years by not having their service ready for cell phones. This allowed Mixi and Gree to completely capture the youth market.

I think you would hard-pressed to find a high school kid in Japan who uses Facebook... I know a few college kids who do (they all speak English).

Don't even get me started on Twitter

I have a Facebook account too. I am thinking about quitting it. But I haven't. Why? I connect with many foreign musicians through Facebook. It is useful for that. Facebook is great for foreigners. But for connecting to the Japanese? No. Don't need Facebook.

I certainly do not put any personal information on my Facebook account. I don't even have my correct birth date on it. I'd recommend that you eliminate all personal information on yours too.

So, like I said, I have been serious about quitting Facebook recently. Any readers in Japan who feel the same way?


This from Eye on Miami:


HERE IS FACEBOOK'S CURRENT POLICY ON USER CONTENT...LOOK AT LAST LINE: IT BASICALLY SAYS "PERMANENT RECORD!"

"By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise, on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing. You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content." 

Here's a great, humorous article entitled, "Facebook Sucks" that spells out the dangers of too much information and about not being cautious on Social Media.

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Can Facebook Be a Contender in Japan? Probably Too Late.

In Japan, Facebook is small potatoes. In this country, Mixi, Gree and Mobage-town blow Facebook out of the water.


As Asahi Newspaper reports:

Facebook's global membership is about 30 times the size of Mixi's, Japan's largest social networking service, but the tables are turned if you look at Japan membership alone. Mixi has about 20 million registered users, and competing services like Gree and Mobage-town are not far behind.

According to the research company NetRatings Japan Inc., there were an estimated 2.93 million Facebook users in Japan as of last November.

I have three daughters. Two of them do Facebook, Gree and Mixi. The youngest daughter only does Gree. I think it is important that the youngest is not interested in Mixi and only Gree...

Of the two daughter who do Facebook, they told me that they only do it because they are half-American, went to school in the USA, and, as such, their US friends do Facebook. They added comments like they don't have any Japanese friends who do Facebook.

Come to think of it... I only have a few. I have thousands of "friends" who do Mixi.

I have another child who is going to international school here in Japan. I do notice that the mothers of the children of those schools do Facebook, but I haven't noticed my wife doing Facebook with her Japanese friends who reside outside of the "foreign community" in this country. With them she does Mixi.

In my (most possibly confused) opinion, I think it is too late for Facebook in Japan. People over 25 do Mixi; High School kids don't do Mixi and do Gree or Mobage. Why do the younger people all do Gree or Mobage? Because data shows that 98% of all 16-year-olds and up in Japan have a cellphone. 90% of those people do not have a PC.

Services like Gree were built specifically for Japanese young people using cell phones, not PC. This makes them have a massive advantage over a service like Facebook that was built for PC then has to be adapted to cellphone; not to mention the cultural problems that a system created in the USA has to overcome in tackling Japan.

Facebook lost their chance in this country when they first arrived and failed to recognize that this is a cellphone country and that few people have PCs in their homes. It is too late to catch up now.

It is an error that companies from the west have made repeatedly over these last 40 years (think Pepsi Cola, Universal Studios, E-Bay, Pay-Pal, etc...) These companies came into Japan thinking that they could do business the same way they had always done in the west, but they failed.

Now, it's too late for them in Japan. 

I do not see why Facebook thinks they will be different this time. No. I think history will repeat itself again. 

In Japan, Facebook is Second-Rate

The big Social Networking site in Japan is called Mixi. Don't bother trying to join it, you'll need to be invited by a current member in order to get in.

I know of a few people who do Facebook in Japan. I'd have to say that, amongst the people I know, that the ratio of Facbook users versus Mixi users is about 10 to 1 in favor of Mixi.

The Japanese people like things that allow them to have their own "clubs" Mixi is much better suited for that than Facebook is. Also Mixi allows people to use pen names. That is a critical issue in Mixi's success in Japan; Japanese people are much more strict about their privacy and do not like to tell the world who they are and where they live.

Mixi fits the bill for the Japanese.

The Japan Times confirms this:

"Facebook's service emphasizes connection to users overseas, stresses openness over privacy and doesn't reflect regional characteristics," Kasahara, 35, whose stake in the company is worth almost $500 million, said in a recent interview in Tokyo. "Our users value a social space that is like a living room — private, comfortable and personal."

Mixi, whose shares have tumbled 39 percent this year, is adding games and expanding into smart phones to revive earnings after profits fell for three of the past four quarters. Facebook Chief Executive Officer Mark Zuckerberg said in July his company is focusing on expansion in Japan and Russia this year, increasing the pressure on the Japanese company to introduce new features to protect its lead.

Mixi, which began social network operations in 2004, has fallen 71 percent since its initial public offering in 2006. The company competes against Gree Inc. and News Corp.'s MySpace.

Closely held Facebook introduced simpler privacy controls in May and said it was reducing the amount of user information that is publicly available after lawmakers and advocacy groups complained that the service shares too much personal data.

Mixi gives its 22 million subscribers more fine-grain controls over who sees their content, such as allowing the users to disclose information to individual friends, Kasahara said.

Facebook spokesman Jonathan Thaw didn't immediately respond to a phone call and e-mail seeking comment.

Facebook is also not convenient to use on cellphones in Japan. When you consider the problems with privacy and that 90% of all cellphone users in Japan do not have a computer at home, then you can see where Facebook has big problems in Japan.... Not to mention that their "Spokesman" is too busy to answer a phone call or his e-mail for a comment from one of the oldest and most famous newspapers in Japan.

Hello Facebook? Yeah, what's the purpose of having a "Spokesman" that doesn't answer his email or phone calls? I reckon this is indicative of why your business hasn't really taken off here amongst the Japanese. Hire a new spokesman... Preferably one who speaks Japanese and understands the customs and business manners of Japan.