Facebook plans innovation hub in China, but it falls

Facebook obtained a license to open a subsidiary in Hangzhou on July 24^th. However, the attempts falls again. China quickly reverses decision to allow Facebook to open office in the Country. The filing listed only one shareholder of the new entity, Facebook Hongkong Ltd.

The subsidiary is registered in Hangzhou, home of e-commerce giant Alibaba which was setting as an “innovation hub” to support local start-ups and developers, ramping up its presence in the restrictive market. Facebook’s website remains banned in China, which strictly censors foreign news outlets, search engines and social media including content from Twitter Inc and Alphabet Inc’s Google.

 It is long way for U.S. tech firms with blocked content to enter the market under regulators.

Why Facebook keep being ambitious in its expansion in China？

Facebook is the most popular social network worldwide, with a global usage penetration of 22.9 percent.  The United States accounted for 11 percent of the global Facebook population. India accounted for 12 percent of total Facebook users worldwide, having finally overtaken the United States in terms of Facebook user figures.

Source：Statistics, IKMResearch,2018

Effected by the privacy scandals and the EU’s General Data Protection Regulation (GDPR) , Facebook saw a slight dip compared to last year.

Source: Facebook, IKMResearch,2018

The clustered network population in China accounts over 55% of the total population，reaching to 771.98 million people by the time of 2017.

Internet plays a growing role in Chinese media consumption.

However, Facebook is banned to enter this market. China is definitely a great opportunity to Facebook‘s promotion, facing the slow growth rate of online advertising.

Source: CNNIC, IKMResearch

The attempts of Facebook to launch in China.

• In January 2018, Facebook is announced to partner with Chinese smartphone brand Xiaomi to make virtual reality (VR) headsets called Mi VR Standalone with the logo Oculus , which will be sold exclusively in China this year.
• Facebook has been secretly testing a photo app, Colorful Balloons, in China in 2017.

• Mark Zuckerberg went as far as learning Mandarin, and going for a jog around Tiananmen Square in March 2016.

• Facebook’s lead liaison with Beijing, Wang-Li Moser, has left the company in 2018. Her duties will be taken up by William Shuai, who is said to have joined Chinese search engine Baidu as a government relations executive after leaving the Chinese government.

The Chinese censorship restrictions are still tightened.

Since Chinese regulators launched in 2009, US’s tech companies are out of this country. Rumors of tech giants backing to China are in the air. As far as now, the competitors are making little progress. The exact timings remain unknown.