US Social Networks in Japan

After initial failures in the Japanese market, Facebook and LinkedIn may have caught their second wind

For years US based social networks such as Facebook and LinkedIn have had very poor penetration in Japan despite having more features and better UX design than local competitors. Homegrown networks such as Mixi and Gree dwarf the Japanese localized versions of their American counterparts, but change may be afoot. Over the last year I've noticed my Japanese friends and colleagues starting to appear on LinkedIn. A friend of mine who owns a Tokyo-based recruiting firm recently told me LinkedIn has started to become a useful recruiting tool for him, where previously it was useful only in their Singapore branch. One of our Japanese team members was just telling me that local software development interest groups have started to spring up on LinkedIn. This is interesting because, due to LinkedIn being embarrassingly late to the Japanese market, numerous other companies attempted to create viable business social networks (most notably Yahoo! Japan's CU) but all met with failure. It was presumed that this was because of cultural barriers such as membership indicating a lack of loyalty to one's current employer.

While Facebook Japan has also met with very limited success over the past few years they've seen considerable growth in 2011. In August of 2010 penetration stood at a paltry .6% with 1,348,860 users - about 1/20th of their largest Japanese competitor. This year they have jumped to 3,059,000 users. Unlike LinkedIn, Facebook paid close attention to localization issues from the beginning including a strong mobile play and introduction of features that are of interest to Japanese users. After arriving in Japan the night before last I logged into Facebook to find several clever subtle localizations. For example, in the featured profile information area at the top of my profile page (i.e. the area with birthday, hometown, languages, etc.) there is an "Add your train station" link.

Its clear from their Tokyo office and considerable expenditures on Japan-specific development that Facebook is serious about making a dent in Mixi. It will be interesting to see if their rewards are commensurate with their investment. Over the past ten years I've watched many, many failed attempts by US web companies to enter the Japanese market. Twitter made it here, but they didn't have any significant local competition in the microblogging space and, despite doing an initially poor job of localization (using byte rather than character limits and not supporting Japanese hashtags), they benefited enormously from a popular Japanese movie that was basically, "You've Got Tweets".

Finally, Japanese adoption of Foursquare, which I wrote about during my last trip, has continued to grow at a furious pace. My first check-in in Tokyo suggested 32 specials nearby. This isn't surprising given the fact Japanese companies have been experimenting with location based social apps for nearly a decade.

Update: The launch of Google+ certainly changes the game in terms of non-native social networks in Japan. In addition to the Japan-friendly strict isolation and clear indication of post visibility provided by circles, Google is already a household name in Japan. Facebook, on the other hand, will have to invest considerably more to build their brand equity within the country.