facebook vs Mixi in Japan

Submitted By Mukul Kumar 2016B25 Neelanjan Brahma 2016B26 Nikita Maji 2016B27 Pallavi Meshram 2016B28 Pawan Jyot Kaur 2016B29 Prathamesh Taware 2016B30 Priyanka Agrawal 2016B31 Pulkesh Mittal 2016B32 Rahul Roy 2016B33

• First Online Social Network site in Japan.• Started in 2004 • Owned by Mixi, Inc. (TYO: 2121).• Founded by Kenji Kasahara• Its headquarters are in Shibuya, Japan.• Users register with their phone number,

must be 15 years old and are anonymous.

mixi Background

• facebook is for profit corporation and online social media and social networking service

• Based in Menlo Park, California, United States.

• Launched on February 4, 2004• Japanese version was offered in May,

2008 • Founded by Mark Zuckerberg

background

Case Overview

• Mixi was the first online social network site in Japan.

• Users need to register with their mobile numbers & are anonymous.

• They must be at least 15 years old.

• Users can express “like” and leave comments & can get notifications about the same.

• Owners can create groups & the content will be open equally to all group members.

• Facebook offered a Japanese version in 2008.

• By contrast with Mixi, Facebook requires users to register with their real name.

• By late 2012, Japanese Facebook had overtaken Mixi in membership, page views and visit time.

• 67.2% of Mixi members also used Facebook.

• Facebook’s requirement for real names appealed to Japanese users.

• The March 2011 earthquake and tsunami in the Tohoku region highlighted the advantages of Facebook.

• People perceived information and calls to organize posted with real names was more authentic.

• Another advantage of Facebook over Mixi is the opportunity to engage with friends outside Japan.

Reasons behind the rise of facebook as a Market Player in Japanese Market even when mixi had the first mover’s advantage.

• Facebook required users to register with their real names.• This appealed to Japanese users in contrast to mixi which used anonymous names.• Posts with Real names were considered to be more authentic. • This helped in disaster(tsunami & earthquake in Tohuku) to spread information which

was more credible.• Users could connect more on a personal level.• Japanese businesses used facebook to develop business relations• Friends outside japan could be connected using facebook, whereas mixi was limited to

only Japanese users.• Anonymity provided by mixi catered to safety needs of people, but real names catered

to their recognition and self esteem needs, which were higher than safety needs in maselow’s hierarchy of needs.

Network effect: • Occurs when the value of a product or service depends on the number of others using

it. • Social network sites are places for people to connect and share information. • The success of social network depends on whether others utilize the site.

Various features & Advantages of

mixi

• No initial threat of competitors

• Opportunity to create a monopoly.

• Opportunity to gain complete market share because of no other players.

• To set up or start a new venture such as social media, about which no one has any prior knowledge

or experience, it is very important to gain the trust and acceptance of people.

• The anonymous status encouraged people to come out of their shell and express themselves more

freely in the new platform of social network.

• Mixi users will be loyal as it was the first site to offer this service.

• There were translation issues on facebook. Since mixi was purely Japanese, there was no issue of

translation.

• Mixi had strict privacy policies to protect users information, whereas facebook’s privacy policies

were more lienient.

Market forms that we identified

in the caselet

Mixi was the first online social networking site in Japan. Its founder Batara Eto discovered the need for a networking product and created a new market based on the identification of the unmet need for socialization. As a result, Mixi became a monopoly firm in this market.

Characteristics of monopoly:

1. Single seller and large buyers.

2. No difference between firm and industry.

3. No close substitutes.

According to Baumol, “a pure monopoly is defined as the firm that is also an industry. It is the only supplier of some particular commodity for which there exists no close substitutes.”

After advent of Facebook, market became a special case of differentiated and open oligopoly in which only two firms dominated market. This special case of a market dominated by two firms.

Characteristics of Oligopoly:

1. Lack of uniformity in the size.

2. Advertising is a life and death matter

3. Element of monopoly

According to Mcconnell, “oligopoly is a market situation in which number of firms in an industry is so small that each must consider the reactions of rivals in formulating its policy.”

Revival plan for mixi

• Mixi should not be restricted to only japanese residents. As this restricts the scope of expansion in terms of users

as well as publicity. Expanding Mixi beyond borders would be of great help as this would help them increase their user base and connectivity among people of different cultures and regions.

• Though Mixi has set the age bar but that doesn’t hold any value if you are registering an account on an anonymous name system. So the sense of any type of bondness though socially only can’t be expected in the Mixi circle of networking as trust factor comes into play.

• Introducing new features like video calls and mobile app concepts that were still not introduced by japenese facebook could help mixi revive with innovation and proper marketing strategy.

• Let users use their real names rather than anonymous names as they are now more comfortable with social networking

Thank You