The chance for Facebook entering Chinese market might come soon. Mark Zuckerberg’s social media giant Facebook is already taking strategic steps to do so, Mizuho reported on Monday, September 20th.
Managing Director, Internet Research at Mizuho Securities Co., Ltd James Lee and Vice President Wei Wang said in the report: During our meetings with various industry contacts in China lately showed that Facebook would have the opportunity to get approval to enter China next year.
Facebook declined to comment. On Tuesday, September 19th, Facebook stock (NASDAQ: FB) increased about 1%, outperforming the broader U.S. stock market’s mild gains.
“Under similar circumstances, Google successfully acquired the Chinese ICP license [for doing business in China],” the report said. “We believe that the recent approvals of multinational Internet companies such as LinkedIn and Airbnb are good signs of China being more open to Internet companies, which also help Chinese companies gain global recognition through advertising, and increases Chinese economies through travel and tourism.
The number of active users for Facebook in the second quarter 2017 reached 2 billion, but it couldn’t get into the Chinese market for the last 8 year. Meanwhile, China Internet Network Information Center also reported in January that Chinese Internet users have reached 731 million, popularizing rate has increased to 53.2% in 2016.
China Internet Network Information Center and China’s Ministry of Industry and Information Technology did not respond to this report for comment.
In the past several months, Facebook has taken more steps in preparation for doing business in China.
Mizuho analysts said Facebook recently hired a government relations executive who had helped LinkedIn China secure an ICP license in China.
The New York Times also reported earlier this month, citing two people familiar with the matter, which Facebook is looking for an office space in Shanghai.
“We have always said that we are very interested in China market, and we are spending time on learning more about this country in different ways,” a Facebook spokesperson said in a statement.
Mizuho analysts estimated that the Chinese advertising clients generate more than $1 billion a year, which is about 4% of the total revenues.
Currently, it is unclear whether Facebook can enter China market. “We think Instagram or VR would be the possible product to enter in China market.