The social-networking juggernaut has a higher penetration rate in Taiwan than anywhere else in the world.
When Aaron Turner gets a new wine or beer product, the first channel he uses to promote it is Facebook. The sale of alcohol online is forbidden in Taiwan, but marketing is permitted. That means Turner, the founder and managing director of wine and beer importer Chalice, can post detailed information about products on his company’s Facebook page, from which he can reach hundreds of thousands of potential customers.
“Facebook is an essential marketing channel for Chalice,” says Turner, who previously operated the Facebook page of an importer of Italian wines to Taiwan. “Regular updates allow us to maintain a high level of customer engagement and reach a larger audience than with just a physical store.”
With 1.86 billion monthly active users as of December 2016, Facebook is the world’s largest social-media network. Globally, many brands use it for marketing and sales.
But in Taiwan, Facebook is unusually dominant. According to data-analysis firm Statista, its penetration rate (the proportion of internet users with Facebook accounts) here is 82%, higher than anywhere else in the world. Its closest competitor is Naver’s messaging app Line, which has a penetration rate of 69%.
A survey of 1,500 local internet users conducted by the state-backed Market Intelligence & Consulting Institute (MIC) last October found that nearly 95% of Taiwanese had used Facebook, compared with just 26% for Instagram and about 33% for Google+. Line was not included in the survey. User engagement on Facebook was high across different age groups. Nearly 97% of Taiwanese under 19 had used the platform; that figure only fell to about 94% for users aged 40 and above.
Wayne Lin, an account manager at public-relations firm Golin in Taipei and a social media expert, traces Facebook’s success in Taiwan to a clever market-entrance strategy. When Facebook first came into the Taiwan market in 2009, it featured a then-popular flash game called Happy Farm on its platform. In the game, each user has a virtual farm and needs to water crops, remove weeds, and perform other maintenance to operate the farm effectively.
“Facebook integrated its platform with the game, so that it became more fun and interactive if you played it on Facebook,” Golin’s Lin says, noting that Facebook friends could send gifts to each other’s farms. “The effect was viral, and Facebook accumulated a huge user base almost overnight.”
Facebook further benefited from the lack of a strong domestic competitor. Jamie Lin, co-founder of the AppWorks accelerator and an expert on internet companies, notes that the now-defunct Wretch blog and photo-sharing network was Taiwan’s top social-media site in the mid-2000s. Photo sharing was then and still is one of the main reasons Taiwanese use social media, Lin observes. But following Yahoo’s acquisition of Wretch in 2007, “Wretch stopped innovating, while Facebook’s photo-sharing functionality kept improving,” he says.
With the rise of the mobile internet, Facebook has become so integrated into everyday life in Taiwan that it is unusual to meet someone who does not use the platform. “In the U.S., there are still people who consciously stay off of Facebook as a way to show their individuality,” observes Jamie Lin, who lived in New York from 2004 to 2009. “But in Taiwan, we’re a conformist culture. There’s pressure to be on Facebook because everyone is on Facebook.”
A social media duopoly
While Facebook remains the top social-media platform in Taiwan, in recent years Line has enjoyed strong growth here, becoming the island’s most popular messaging app with 17 million subscribers, according to MIC. AppWorks’ Lin says that Line is “super profitable” in Taiwan on the back of strong sales of emoji stickers, games, and advertising.
However, he sees Facebook Messenger, the Facebook messaging app, steadily eating into Line’s market share. One of the reasons for that is pervasive spam on Line, which includes everything from suspicious car loans (lending terms that seem too good to be true) to solicitations by prostitutes. “Line is bad at getting rid of spammers, and it’s affecting their business,” Jamie Lin says.
Julia Chiu, an industry analyst at MIC, believes Line’s business remains robust in Taiwan. “No communications apps, including Facebook Messenger, have been able to pose a long-term challenge to Line yet,” she says. The most important reason for Line’s resilience is the popularity of its emoticons – both free and paid – which Taiwanese use to express themselves, she explains. In this area, “Facebook Messenger has a long way to go before it catches up with Line,” she adds.
Between Facebook Messenger and Line, “whoever entices people here with the best stickers will win,” says Ian Crews, a freelance writer and regular social media user who has lived in Taiwan since 2008. Crews notes that Line has also launched apparel in cooperation with Japanese fashion retailer Uniqlo in Taiwan, as well as figurines and stuffed animals based on its stickers.
Line’s dominance in the messaging-app market has prevented any serious competitors from making inroads, including China’s WeChat, which boasts over 846 million active users. WeChat is successful in China because it integrates numerous useful functions – everything from messaging and video calls to personal loans and food delivery – into a single user-friendly interface, observes Tseng Chia-hung, a senior industry analyst at MIC.
But the Taiwan market is very different. There is no Great Firewall of Formosa here. Facebook, Line, Instagram, Twitter, and other foreign social-media platforms are all permitted to operate freely, forcing WeChat to compete in a tougher market environment.
Further MIC has found that internet users in Taiwan typically use just one or two mobile apps on a regular basis, and the two most popular apps here are Line and Facebook Messenger. “With the learning curve developed, Taiwan internet users will be likely to stick with these two apps and are unlikely to switch other platforms like WeChat,” Tseng says. “As a latecomer to the Taiwanese market, it would be challenging for WeChat to find a way to gain traction in Taiwan.”
MIC’s Chiu believes Facebook will eventually need to reconcile its burgeoning commercial applications with its identity as a social media platform. While promotional page posts on Facebook are increasing, Facebook found its users have reduced the number of their updates and pages shared, she observes. “If this becomes a trend, it will certainly affect Facebook users’ willingness to interact on the platform, including those in Taiwan,” she concludes.