Facebook is planning on opening a sales office in China in a bid to boost ad revenues by promoting Chinese businesses to overseas customers
Now that Facebook Inc. (FB) has sorted its advertisement business out, it seems to be expanding by developing its offerings for as yet untapped markets. According to recent reports, the social media giant is planning on opening an office in China, even though its own services are banned in the country. The social media giant is in talks to lease office space in the Fortune Financial Center in Beijing, sources familiar with the matter say. It is reportedly targeting Chinese companies looking to advertise to potential customers overseas.
In a statement to Bloomberg, Facebook Vice President Vaughan Smith said Facebook’s Hong Kong sales team had been instrumental in supporting Chinese businesses, and for that reason the company is exploring ways to support businesses locally.
Issues in China
China’s censorship laws prevent many US tech firms from capitalizing on the massive market. Other services, like Yahoo (YHOO), Google (GOOG) and Twitter (TWTR), are also banned in the country. Amid such laws and regulations, the country has seen several indigenous social media networks grow and fill the void.
Opportunity for Facebook
In China, the most popular social media networks and search engines include Baidu, WeChat, and Weibo. However, the opportunity for Facebook in helping Chinese businesses grow overseas is still sufficiently large.
Alibaba Group Holdings, which is set to go public this year in the US, is expecting a valuation in excess of $100 billion. The sheer size of its e-commerce operations ensures that it is an invaluable platform for advertisers. In fact, Alibaba's integration with Chinese Twitter-like service Weibo (WB) was instrumental in turning the latter profitable, as it unlocked a vital stream of ad revenues for Weibo.
Recently, Amazon and Twitter also partnered to allow Twitter users to add products to their Amazon shopping cart by replying to a tweet with a product link and the hashtag #AmazonCart. The microblogging service will not get a cut from sales made through this service, but it will be able to attract advertisement dollars.
Facebook has already been helping exporters in China by placing their ads on its platform. In a nod to Facebook’s “Chinese Connection”, Vaughan Smith had said during the Global Mobile Internet Conference in Beijing that thousands of Facebook applications had been developed by Chinese developers. Its latest move will only deepen its business ties with the country, even if it remains socially disconnected.
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