Facebook: The Africa Expansion
Facebook Pushes into Africa
Global social media networking site Facebook has set its sights on the African continent-a fast growing market where the company has over 100 million users. The company recently opened an office in Johannesburg South Africa and appointed South Africa’s Nunu Ntshingila to lead its Africa business. Prior to joining Facebook, Nunu was a leading figure in South Africa’s advertising industry where she helped to build the African regional network of the advertising firm Ogilvy and Mather.
The Facebook office will host a team that will initially be focused on the company’s adverting business operations. Part of Facebook’s push into Africa is driven by the need to unearth new sources of advertising revenue growth. International markets are a critical source of the company’s advertising growth accounting for over half the its advertising revenue.
So as big global brands position themselves to pursue opportunities in the African market, Facebook will seek to develop a client base that will seek to use its platform to reach consumers on the African market. Importantly also, the platform will become increasing important to Africa’s Small and Medium Enterprises (SMEs) which in many countries make up over 90% of all businesses. For many such SMEs, setting up Facebook pages is becoming a standard part of their marketing and product promotion strategies. Using Facebook, they can post their product offerings, take inquires, generate new leads and actually sale their products. Moreover, Facebook’s long term prospects in Africa could be better than in other developing regions of the world where the local technology ecosystems could more developed and thus easily create stronger local competition in the long run. Also some developing countries may have restrictive social media regulations which may impact the long term development prospects of the company. In the meantime the continent is seeing a rapid expansion in its smartphone penetration with over 700 million people projected to have a smartphone within the next five years. This positions the continent as interesting business case for global tech firms such as Facebook.