Can LinkedIn prosper in Japan?

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Brett Petersen / October 25, 2011

Last week, LinkedIn announced that it is launching a Japanese version of its service (LinkedIn’s announcement) When I heard this, I was intrigued because social networks in Japan have a much lower level of penetration than other countries around the world and surely there are better markets that LinkedIn could be expanding into. So I’ve dug up a few nuggets that may help shed light on LinkedIn’s potential in Japan:

  • Staying in touch with friends is only the 8th most important reason for Japanese internet users to get online.
  • Just 18% of Japanese internet users were active on social networks in June 2011.
  • Only 4% of Japanese social network users say that networking for work is a very important reason for them to use a social network.
  • Mixi is the most popular social network in Japan with a reported user base of 24.7 million in July 2011. GWI Wave 5 data suggests that just 17.5 million of these are active on a weekly basis, however, representing just 20% of internet users in Japan.

Based on these four points alone, one must question the wisdom of LinkedIn’s Japanese expansion. Not only does Japan have the lowest level of social network engagement out of the 27 countries covered by GWI, but Japanese motivations for getting online are much more focused on e-commerce. Social engagement and network building are not very important online engagement drivers at all.

So what could LinkedIn’s rationale for launching a Japanese service be? At first glance, LinkedIn appears to be interested in the vast size of the Japanese market. This is where the true potential lies, and if LinkedIn can figure out better ways to engage Japanese internet users in social networking, it has the potential to be very successful. This is essentially what Mr. Rajan said in his post, “We are absolutely committed to building the right products and the right experiences for the Japanese market. That is why we are investing in and building a local team based in Tokyo across product, engineering, marketing and operations. Our goal is not only to better understand the needs of the market, but to also enhance the professional lives of our members, partners and customers in Japan.”

To me, this says that LinkedIn hasn’t had the success it thought it would in Japan with its English service, just 330,000 active users in Wave 5, as it had hoped. Perhaps with better localization of the service to Japanese users, LinkedIn can succeed where it has failed in the past, but the low penetration of social networks in Japan in general leads me to believe that the returns to LinkedIn of its Japanese expansion will be slow to come at best. What do you think?