Thomas Crampton

Social Media in China and across Asia

Can Asia Flip Facebook’s Business Model?

Oct 8, 2009

Category: facebook Tags: , ,

As this chart shows, the sale of digital items rapidly overtook advertising as the major source of revenue for the Japanese social network GREE (same is true of other social networks in Japan and China).

For those unfamiliar, digital items sold can be anything from a gift for a friend to a pimped-up avatar. Benjamin Joffe has done some interesting studies of the topic.

Will Asia export this business model to Facebook?

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Benjamin Joffe

Benjamin Joffe
About: Some of Benjamin Joffe’s specialties are Asian innovation, stereotype deconstruction and techno-anthropology, says his Linked In profile. It’s lit... [Learn more]

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  • plus8star

    Thanks Thomas for your kind link :-)

    The story of GREE is quite an interesting one:
    - It started off as a PC-based SNS competing with MIXI.
    - It received investment from Globis in Japan at that time
    - DeNA's service Mobile Game Town was doing a lot better than MIXI and GREE revamped its service to do MOBILE and FLASH GAMES with virtual goods instead of PC + Advertising.
    - Now GREE is pretty much a mobile-only virtual-goods powered service

    There are some important market catalysts for GREE's success on mobile:
    1. 3G everywhere (over 90% penetration)
    2. Unlimited data (over 50% of users have it)
    3. Flash Lite on almost all mobiles (it started in Japan)
    4. Competitor DeNA "taught" the market about such service
    5. Early partnership with KDDI (Japan's #2 telco) to push the service on mobile
    6. MASSIVE (and expensive, but with good ROI) advertising to grow the service in a second phase
    7. Super-hit fishing game (with virtual goods: rods, baits, etc.) - GREE is currently suing DeNA for copycatting it.

    Cheers :-)
    Benjamin

  • I have always been encouraged by non-traditional revenue methods. It seems like the clear path more many is display ads, however, with a little imagination it seems evident that customer interest and profit can go hand in hand. It has always been my goal to move from advertising to interesting. We are starting to see this change in SMM.

    Much success,

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