Despite its early mobile-first approach, Twitter (NYSE:TWTR) is still struggling to attract users throughout Asia and the Middle East, where smartphones are often used as people's primary computing devices. The company's success in Japan hasn't translated to other Asian countries, and the Great Firewall has kept the social network out of China along with its fellow American social networks like Facebook (NASDAQ:FB).
But Facebook has had no problem growing in Asia and the Middle East overall. The social network has likely already surpassed more than half a billion monthly users in the Asia-Pacific region. Twitter, comparatively, has boosted its user count in the region by including "SMS fast followers" -- users who receive tweets only through text.
Twitter has always maintained that its content is what makes it valuable. That's why it's targeting media companies in Asia and the Middle East to produce more content on its properties -- Twitter, Vine, and Periscope -- in an effort to attract more users.
Before consumption, there must be content
Earlier this year, Twitter CFO Anthony Noto said that the key to bridging the gap between Twitter's brand awareness and its market penetration is offering users a consumption-first experience. He and interim CEO Jack Dorsey seem to believe part of that consumption-first experience is the upcoming Project Lightning that the company will release this fall. Project Lightning will curate Twitter's content around specific events, providing an organized way for new users to get into Twitter.
However, before there's consumption, there must be something to consume. In more penetrated markets like the United States, where Twitter has 66 million monthly active users, there's tons of content from both professionals and amateurs. And often, it's very good and exclusive content like videos and photos.
But in areas where Twitter isn't as popular, like Asia, there's far less quality content. What's more, professionals don't have as much incentive to produce content on Twitter because of the small reach.
In order to solve this chicken-and-egg conundrum, Twitter must reach out to publishers in the region and convince them to post content to Twitter. If publishers follow through and produce quality content, Twitter can promote those accounts to new users or incorporate their content into Project Lightning feeds.
Reinvigorating user growth
Twitter has seen a dramatic slowdown in user growth over the last few quarters. During the second quarter of the year, the company added just 2 million net monthly active users not including SMS fast followers. With over half the world's Internet population (and growing) concentrated in Asia and the Middle East, the regions represent a major opportunity for the company to reinvigorate its user growth.
Facebook, for example, sports more users in its Asia Pacific region than any other region. And that doesn't include China, of course, or Russia, which is categorized as part of Europe. Moreover, Facebook's user base in the region is growing rapidly -- faster than any other region, in fact, at 21% user growth year over year.
The recent success of Facebook in Asia indicates that there's plenty of user growth available in the region for social networks. Twitter has taken the approach of trying to attract users before they even have smartphones. The company bought ZipDial earlier this year, which allows people to sign up for free using a missed call and receive text messages from certain services (which are often free for incoming messages). This is how Twitter has added millions of SMS fast followers.
But Facebook is showing that it's not necessary to rely on SMS-only users to sign up new users. Its Internet.org app is currently available in India, and it could be coming to many more Asian countries in the near future. The app offers free mobile for a limited set of services. Earlier this year, Facebook opened up Internet.org to developers, and Twitter could take advantage of its openness by developing an app for the platform.
Dorsey is intent on growing Twitter beyond its current user base and reaching the mass market. Attracting more people in Asia and the Middle East to Twitter is the company's best bet for user growth. However, it's worth noting that the region still offers some of the lowest average revenue per user, especially when you discount Japan -- where Twitter already has a strong presence. So, while the efforts to attract more users in the region may prove successful, they won't result in significant revenue for some time.