Why Facebook's breakdown is an opportunity for home-grown apps

Users need alternative platforms to continue their activities as disruption in the world's largest social media network leads to severe consequences

Facebook's latest breakdown on Monday highlighted the need for alternative applications and is seen as an opportunity for home-grown mobile apps in emerging markets to make their presence felt in the daily activities of billions of users, according to Tellimer Research.

The survey, which covered 14 markets, shows that Facebook's products typically takes a 40 per cent share of the most frequently used apps. The breakdown gives regulators, businesses and consumers reasons to favour a more diversified playing field, providing an opportunity for smaller players to claw into Facebook's dominant market share.

"Facebook is best known for its messaging and content-sharing platforms, where it is the dominant player in all but a handful of markets. But Facebook [and its stable of companies] is also increasingly an enabler of online commerce, both at the business-to-business and business-to-consumer levels," Rahul Shah, head of financials equity research at Tellimer, said in the report.

Any outage in an ecosystem as large as Facebook – along with its associated services WhatsApp and Instagram – has far-reaching consequences, including severe financial losses for its users who heavily rely on the platform for communication, e-commerce, news and information on an almost round-the-clock basis.

The services went dark on Monday for six hours – its longest and biggest outage by far – caused by a domain name server issue, bringing a big chunk of online activity to a halt and prompting its users to scramble for alternative apps. Collectively, these apps have almost 6.24 billion users worldwide, according to Statista. It also caused the wealth of its chief executive and founder, Mark Zuckerberg, to plummet by $7bn.

Downdetector, a site that monitors reports of outages across the internet, said the Facebook service interruption is the largest it has ever seen.

The countries Tellimer surveyed – where Facebook's products are dominant – include Mexico, Saudi Arabia, Brazil, Egypt, South Africa, India, Nigeria, Indonesia, Pakistan, Vietnam, Kenya, the Philippines, Russia and China.

Individually, Facebook does best in Vietnam, Instagram in Indonesia, WhatsApp in South Africa and Messenger in the Philippines, the study added, with Google's services a distant second.

Individually, Facebook does best in Vietnam, Instagram in Indonesia, WhatsApp in South Africa and Messenger in the Philippines. Google's services, overall, are a distant second, the study added.

Home-grown apps already have a considerable following in countries where they are the top local or regional platform, and are gearing up to expand further.

Noon, the e-commerce platform from Mohamed Alabbar, the founder of Dubai's Emaar Properties, occupies the top spot in Saudi Arabia, according to Tellimer. On Sunday, the company announced it was going to raise $2bn in funding from investors, including Saudi Arabia's Public Investment Fund.

India's Flipkart, which is owned by US retailer Walmart, recently launched a direct-to-consumer programme to help made-in-India brands.

Meanwhile in China – the world's second-most populous country – Facebook services are severely handicapped owing to tight internet restrictions on global technology giants.

Russia used Facebook's debacle to magnify the need for internet sovereignty. Maria Zakharova, the spokeswoman for the Russian Foreign Ministry, said the huge disruption “answers the question about whether we need our own social media and internet platforms".

She issued the statement on Telegram, the WhatsApp rival from Dubai-based Russian developer Pavel Durov, whose platform gained 70 million users while Facebook was down.

Quote
We think Monday’s outage will give individuals and businesses pause for thought. Some of them use Facebook’s platforms for critical tasks and may have suffered financial losses or severe disruption to their activities as a result
Rahul Shah, head of financials equity research at Tellimer Research

Vkontakte, Russia's largest social media network, also reported a 20 per cent rise in traffic during the Facebook breakdown.

In addition, Facebook, should it learn from the outage, may decide, or be impelled, to develop a more decentralised model with greater on-the-ground resources in key markets like Brazil and India, which has a combined population of almost 1.6 billion.

"We think Monday’s outage will give individuals and businesses pause for thought. Some of them use Facebook’s platforms for critical tasks and may have suffered financial losses or severe disruption to their activities as a result," Mr Shah said.

"Regulators that have already been jittery about the key economic role being played by foreign tech giants, could also use this episode to tighten oversight," he added. "The net result is likely to be favourable for home-grown apps that have hitherto been forced to work under the large shadows cast by global tech firms."

Updated: October 8th 2021, 9:27 AM
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