Opportunities for social media start-ups depend on economic basis

For many start-ups, social media is the gift that keeps on giving. New forms of analyses, add-ons and multimedia segments are providing an ever greater range of opportunities for new companies via brands such as Twitter, Facebook and Instagram. Corporate finance boutiques are also able to use social networks to attract new clients or source out little-known start-ups. For example, London corporate finance has a strong presence on social media, especially LinkedIn. However, recognising the differences between developed and advanced market consumers is key to any social media start-up strategy.

Significant factors in social media development

The global social media landscape in terms of platform origin is largely divided between the USA and China, with the likes of Facebook, Qzone, Sina Weibo and Twitter dominating by monthly unique visitors. However, the fastest growth rates are being recorded by especially mobile-friendly platforms such as Instagram and Vine. There is a growing correlation between how Internet users are accessing social media networks. In 2014, there are expected to be a total of 2.9 billion Internet users globally and 1.8 billion mobile Internet subscriptions. The mobile device is therefore becoming a major driver of social media uptake, especially in developing countries where fixed connectivity is limited.

The developing world is providing the present growth spurt for social media usage, as more new Internet consumers come online on the back of improved local infrastructure, lower telecom tariffs and growing disposable incomes. According to trade sources, 2014 will see a total of 1.9 billion social media users. With social media use reaching saturation point in advanced markets, consumers are deciding “which” rather than “if” when it comes to the social landscape. There is growing demand for highly visual media and anonymous mobile apps, and less interest in profile-based social networks.

Overexposure is especially playing a role in driving more developing market consumers to socialising in private. This is particularly apparent among the younger age groups, which are becoming anxious of being publicly exposed to their family members, work colleagues and marketing campaigns. The result is the growing popularity of anonymous social smartphone apps such as Whisper and Secret, which have attracted $20 million and $9 million in venture capital since 2013.

If there is one area where the developing world is ahead of advanced markets it is in social commerce, in large part due to China’s lead in the segment. E-commerce giants such as Alibaba and Tencent have been successful in integrating purchasing functions on their social networks, as well as creating links between various retailing segments. According to trade surveys from 2013, in China around 75% of all online users post shopping ratings and reviews at least monthly, while in the USA and Europe the figure is less than 20%.

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