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Facebook is so Dominant it Earned $5 Billion in China in 2018 – a Country Where It’s Banned

Last Updated September 23, 2020 12:25 PM
Melanie Kramer
Last Updated September 23, 2020 12:25 PM

In what can only be further evidence of the global reach of Facebook, reports show that the social media platform earned $5 billion in revenue from China. Yet Facebook has been prohibited in China since 2009.

Facebook’s Fifth Largest Market, Surprisingly, is China

According to reporting by TheStreet  and a research note from Pivotal, it’s estimated that Facebook made anywhere between $5 billion and $7 billion from Chinese advertisers. This figure is about 10% of Facebook’s 2018 revenue.

Facebook’s 2018 filing confirms that revenue came from resellers “representing advertisers” based in China. Facebook apparently has an unofficial Chinese office, through its links with a Chinese company called Meet Social. Meet Social, as per other reporting, places 20,000 adverts per day on Facebook via its software platform.

The social media company, with an almost monopoly on our online friendships, has its largest market in the US. Its second largest market is Russia, followed by Turkey and Canada.

There has been speculation that Russia could also ban Facebook in the country for not complying with data regulation laws. In Russia, online service providers and platforms must only store the data of Russian citizens on Russian soil. Russian regulators have yet to be convinced that Facebook is complying, or that it will. Twitter too is under scrutiny in Russia.

Facebook in China: Zuckerberg’s Missing Out on 700 Million Users

Facebook CEO Mark Zuckerberg probably has more pressing matters on his plate recently with data and privacy scandals consistently hitting the platform. However, he has in the past worked hard  to try and re-enter the Chinese market after the 2009 ban.  He was pictured in 2016 jogging through Tiananmen Square.

Facebook CEO Mark Zuckerberg Jogging in China in 2016 Source: Wall Street Journal/Facebook

Zuckerberg said in 2015:

Obviously you can’t have a mission of wanting to connect everyone in the world and leave out the biggest country.

It seems Facebook has still found a way to take advantage of China’s massive market. A social media market currently dominated by Tencent, which operates WeChat and QQ, accounting for many Chinese social media users.

Pivotal’s Brian Wieser believes that Facebook’s current advertising revenue from China could be affected by a further economic downturn in the country or future regulation.

Despite Facebook’s many challenges the company’s fourth quarter 2018 results exceeded expectations and Facebook’s stock is up 25% this year.

Facebook Share Price Over the Last Year Source: TradingView

Facebook has so far failed to re-establish the social network for users in China. Tencent, according to other reports this week plans to lead funding for another social network, Reddit , increasing its own presence globally. Though Tencent, as a major shareholder in Fortnite creators Epic Games, has yet to lead the game into a potentially massive revenue stream from China. China has begun to increase the speed of game approvals to the Chinese gaming market but has yet to authorize Fortnite for Tencent.