Mark Zuckerberg, CEO of Facebook on Thursday said in the second quarter earnings call that Facebook is “really excited about the opportunity” in India. The company on Thursday reported its financial results for the quarter ended June 30, 2020, with Facebook recording an 11% year-over-year (YoY) growth in its revenue. The social networking giant said that its daily active users (DAUs) increased 12% YoY to 1.79 billion on average for June 2020. Similarly, Facebook said that its monthly active users (MAUs) also increased 12% to touch 2.70 billion as of June 30, 2020.
Facebook Sees India As A Huge Opportunity
Facebook also highlighted that the monthly users of its family apps including Instagram, Messenger and WhatsApp touched 3.14 billion as of June 30, representing an 14% YoY growth.
"We're glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times," Zuckerberg said. "And we're proud that people can rely on our services to stay connected when they can't always be together in person."
Further, Zuckerberg in the earnings call said that India is the largest country for Facebook in terms of its user base.
“It should be one of the faster-growing business opportunities as well to help businesses grow there, and we're very excited about that,” he said.
Zuckerberg also said that India presents a “huge opportunity” for the company to enable small businesses and individuals “to buy and sell things through WhatsApp.”
“We want to enable that,” Zuckerberg said. “That starts with enabling payments. A big part of the partnership that we have with Jio will be to wire up and get thousands of kiranas, small businesses across India, onboarded onto WhatsApp to do commerce there. And once we prove that out with Jio in India, we're planning on expanding it to more folks in India and to other countries as well.”
It has to be noted that Facebook initially announced its investment into Jio Platforms, a subsidiary of Reliance Industries and the company behind Reliance Jio in April. Dave Wehner, CFO of Facebook in the earnings call said that Facebook closed its investment in Jio Platforms in July and that the company approximately paid US$5.8 billion in cash.
Facebook on its part is said to be working hard on expanding its multiple commerce products targeting small businesses and individuals. Zuckerberg said that the Facebook Shops that the company rolled out in early 2020, enables small businesses “to put in a catalog and then have a Shop across Instagram and Facebook to start.” It was said that the Shops could eventually expand across all of the Facebook family apps. The company is said to be building Facebook Pay that enables users to store credit card information that makes it “easier to do follow-on transactions in any of the apps.”
However, Zuckerberg said that he is “excited” about messaging commerce as it is “particularly important, especially in developing countries.”
“But we're seeing a lot of small businesses just conduct a significant portion of their business over Messenger or over WhatsApp,” Zuckerberg said. “And in the medium term, I think the way that we're probably going to build a business around that, we already offer the business API, and that will be meaningful.”
Zuckerberg said that messaging commerce “will grow as a trend.”
Facebook Warns of Decline in Daily and Monthly Active User Base
Meanwhile, the company said that it expects the DAUs and MAUs to be “flat or slightly down in most regions in the third quarter of 2020” as COVID-19 restrictions continue to ease. Facebook said that it is witnessing “signs of normalization in user growth and engagement” in the places where COVID-19 restrictions have been eased, “particularly in developed markets where Facebook's penetration is higher.”
Crucially, the company said that the revenue growth in the first three weeks of July was “in-line with our second quarter 2020 year-over-year ad revenue growth rate of 10%.”
“We expect our full quarter year over-year ad revenue growth rate for the third quarter of 2020 will be roughly similar to this July performance,” the company said.
It has to be noted that Coca-Cola, Unilever and other leading companies have pulled advertising from Facebook and other social networks. Despite the boycott of leading advertisers, Facebook highlighted a revenue growth rate of 10%.