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Nielsen Holdings NV
It’s the part of the job that stock analyst Hiroshi Naya dislikes the most: phoning investor relations managers on a Saturday or Sunday when he’s working on a report and facing a deadline. In Japan, placing a work call to someone’s cell phone on the weekend “feels like entering someone’s house with your shoes on,” says Naya, chief analyst at Ichiyoshi Research Institute in Tokyo. So last year, Naya started asking his questions via messages on Facebook. While a telephone call seems intrusive, he says, a Facebook message “feels more relaxed.”
Many Japanese have become fans of Mark Zuckerberg’s company in the past year. It’s taken a while: Even as Facebook took off in India, Indonesia, and other parts of Asia, it’s been a laggard in Japan since its local-language version debuted in 2008. The site faced cultural obstacles in a country where people historically haven’t been comfortable sharing personal information, or even their names, on the Internet. Homegrown rivals such as community website operator Mixi and online game portals such as DeNA allow—and sometimes even require—their users to adopt pseudonyms. “We have a very strict policy: Never use real names, never post phone numbers, and never post e-mail addresses,” says Tomoyuki Akiyama, spokesman for DeNA, which includes a popular social networking function that allows gamers to contact each other.
The Japanese are overcoming their shyness, though. In February, Facebook had 13.5 million unique users, up from 6 million a year earlier, according to data from Nielsen (NLSN). That puts Facebook in the No. 1 position in Japan for the first time, ahead of Twitter and onetime leader Mixi. “Facebook didn’t have a lot of traction in Japan for the longest time,” says Arvind Rajan, Asia-Pacific managing director for LinkedIn, which entered the Japanese market last October and hopes to emulate Facebook’s recent success. “They really did turn the corner,” he says. Facebook and Mixi declined to comment.
Rajan attributes the change in attitude to the March 11, 2011, earthquake and tsunami. During the crisis and its aftermath, sites such as Facebook helped parents and children locate each other and allowed people post and find reliable information. “The real-name case has been answered,” says Rajan. “People are getting it now.”
Facebook has also benefited from high-profile users such as Kazuyo Katsuma, a popular author and businesswoman who joined the site in late 2010 and frequently mentions her Facebook page in media appearances. Jesse Eisenberg’s portrayal of Zuckerberg in the Oscar-winning 2010 movie The Social Network also helped boost awareness of Facebook among Japanese. Takanori Kobashi, a 26-year-old marine products wholesaler, started using Facebook last year after seeing the movie. “That guy is amazing,” he says of Zuckerberg.
Japanese like Kobashi see Facebook as a powerful business tool. The real-name policy makes the site a good place to cultivate relationships with would-be partners, he says. “It’s useful because they will remember me after I comment on their posts,” says Kobashi. As more companies such as retailers Uniqlo and Muji turn to Facebook to reach Japanese consumers, the Silicon Valley company is benefiting from a virtuous cycle, says Koki Shiraishi, an analyst in Tokyo with Daiwa Securities Capital Markets. “People started to recognize it’s suited to business because it uses real names and is not anonymous,” he says. “It’s a chicken-and-egg thing: If everyone starts using it, then more people start using it.”
Facebook has been active in trying to boost its local appeal. In September 2010 the company opened a Japan office and introduced Connection Search, an application that links job-seeking students with young graduates. Waseda University student Kei Hirata, 21, used it to connect with alums in advertising. “Facebook has a cleaner image than other social networking sites,” he says.
As a result of Facebook’s rise, investors have soured on some of its rivals: DeNA’s stock price has dropped 24 percent in the past year, and Mixi’s has fallen 38 percent, compared with a 3.4 percent rise for the benchmark Topix index. Growth at Twitter—which also entered Japan in 2008, making Japanese its first non-English language—has stagnated, and the San Francisco company has partnered with Mixi to do joint marketing. Twitter Japan country manager James Kondo says there’s no reason to worry. Japan’s social networking scene “is a developing thing,” he says. “We’re not in a flat market where everyone is competing for a share of a fixed pie.”
The bottom line: Facebook Japan more than doubled in size to 13.5 million users over the past year, growing at the expense of Twitter and domestic rivals.