Facebook hints at SA office

Rumours are rife that Facebook is planning to open up an office in South Africa, but are they true and if so, why now? News24 finds out.

Facebook overtook South Africa’s home-grown instant messaging service Mxit for the first time this year to become the nation’s biggest social network.

It has seen explosive growth, with 9.4 million active users – up from 6.8 million a year ago, according to the SA Social Media Landscape 2014 report.

Iain MacKenzie, spokesperson for Facebook in Africa, said the group is “really optimistic” about South Africa and is experiencing “rapid growth” overall in Sub-Saharan Africa.

He said across the region, Facebook has 52 million monthly active users – up 23% in the last six months.

As for opening an office in South Africa, he said: “Yes we are definitely increasing our focus. The team is currently based in Dubai, but we hope to have an office soon”.

Ringing in the changes

So why the sudden growth? Frank Rizzo, director of IT Advisory at KPMG, said in the last year alone internet connectivity has “gone through the roof” throughout Africa.

South Africa however, comes out on top for levels of connectivity and penetration – which is hard in rural areas, he said.

But this growth hasn’t led to more people buying PCs and firing up their home broadband. “The trend is towards the technology converging on one device – the smartphone,” said Rizzo.
Indeed, research by the mobile phone group Ericsson found that globally, 65% of all mobile phones bought in the first three months of this year were smartphones.

What’s more, the number of mobile broadband subscriptions are galloping ahead. Ericsson expects subscriptions in the Middle East and Africa region to grow from 1.2bn in 2013 to 1.9bn in 2019.

This growth hasn’t gone unnoticed by Facebook. MacKenzie said: “One thing that especially exciting about South Africa and Africa generally is the high level of Facebook use on mobile – 90%.  Africa has effectively skipped desktop and gone straight to mobile.”

Stealing the lead

The rise of Facebook however, seems to have come at cost to local social networking groups.

Rizzo puts it down to Facebook’s global network.

He said: “Mxit, for example, is fairly regional but Facebook has stolen the lead because it has critical mass.”

Facebook’s global network is great for driving up its user numbers then, but as MacKenzie points out it is also great “for marketers who can reach people who matter to them wherever they are”.

Earlier this month a senior Facebook management team was sent to South Africa, and MacKenzie said the company is working with marketers to understand their business needs and help them make the best possible use of Facebook.

According to Rizzo, it won’t be long before the likes of Facebook set up shop in South Africa.

“So far we are behind, as a continent, on connectivity – and smartphone penetration in South Africa is still relatively low,” he said, but the rapid roll out of cables connecting more people to broadband across the nation means there is huge market potential.

He pointed out that new technology hubs are springing up across Africa – in Kenya, Nigeria and in Johannesburg’s Braamfontein. These are populated by not only tech companies but banks and venture capitalists.

MacKenzie confirmed Facebook’s hopes for a South African office in the future, “but right now, there’s no location or timescale to share”, he said.

For Arthur Goldstuck, managing director of World Wide Worx and editor in chief of Gadget, Facebook’s potential arrival is a no-brainer.

He said: “Facebook's increased engagement with South Africa comes at a time when Amazon has built formidable local developer and call centre capacity, and Google is becoming the most powerful ad sales force in the country. Facebook can't NOT be here.”
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