first-ever quarter-to-quarter drop in daily active users in its history, is seeing its growth slow in India too, the company said during an earnings call.
It had earlier reported a small but significant drop in its global daily active users to 1.929 billion from 1.930 billion in the previous quarter. Analysts expected it to report 1.95 billion. Facebook also reported 2.91 billion monthly active users globally in the fourth quarter, the same as in the previous quarter. The company’s tepid performance caused its stock to sink as much as 22%.
Meta said that user growth in India had slowed down during the last quarter of 2021, affecting its overall user growth. This, it said, was partly down to an increase in the cost of data plans.
“User growth in India was limited by an increase in data package pricing. We believe competitive services are [also] negatively impacting growth, particularly with younger audiences,” said Dave Wehner, chief financial officer, Meta.
Prices of data plans of Bharti Airtel, Reliance Jio and Vodafone Idea increased by up to 25% in the last quarter.
“Increase in data pricing would have made some consumers more cautious about how they use data,” said Neil Shah, vice-president, research at Counterpoint Research.
Discover the stories of your interest
Globally, Meta blamed Apple’s privacy changes and increased competition for users from rivals such as TikTok, which is banned in India, for the drop in its active users.
But Shah said that in India, Facebook faced stiffer competition from OTT players than from short video platforms, as many Indians binge-watch shows on their smartphones, eating into time they could have otherwise spent on Meta’s family of apps – Facebook, Instagram and WhatsApp.
He added that views and engagement may have dropped for a few other reasons as well. Apple had its best year in India, adding 6.5 million users. Even though the overall number is small, it represents a shift in premium Android customers to Apple, which has stricter privacy norms for apps such as Facebook’s.
Shah said that Facebook’s growth in 2021 was bound to be slower than in 2020, when lockdowns worldwide kept people indoors for months. The resurgence of a new variant in January may translate into better user numbers for Meta this quarter, he added.
Meanwhile, Meta CEO Mark Zuckerberg highlighted the work the company was doing on business messaging in India. “I also want to call out business messaging too, since it’s an area where there’s real momentum. We estimate more than one billion users are connecting with a business account across our messaging services every week. And we’re partnering with companies like Uber and JioMart to help people book a ride or have their groceries delivered right from a chat,” he said.
India is a key market for Facebook, with the largest number of active users of any country. According to data website Statista, Facebook had 349.2 million users in India as of October 2021.
Meta
invested a whopping $4.5 billion in Reliance-owned Jio Platforms last year and also announced a partnership with Reliance Retail and WhatsApp.
He said that in 2022, Reels, its short video offering, would be an important focus and investment area for the company. “It’s clear short-form video will be an increasing part of how people consume content moving forward, and Reels is now our fastest-growing content format by far. It’s already the biggest contributor to engagement growth on Instagram and it’s growing very quickly on Facebook too,” he said.
