It’s an awkward topic for rogue, extreme-right wing elements in our country. Heck, I’m not even sure how I really feel about it. But there’s a point where it’s no longer useful to continuously ignore the giant pink elephant in the room. So here goes it — Asia will take over the world. There’s not a darn thing anyone can do to stop the train. And Facebook Inc (NASDAQ:FB) will have it no other way.
In fact, Facebook is probably one of the few companies that recognize this demographic reality. Subsequently, FB stock is a very real challenger to the near-hegemonic dominance of Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL).
Honestly, the social media network is well on its way to becoming what Apple Inc. (NASDAQ:AAPL) once was before copycat competitors entered the fray: a completely unique experience and solution with no natural predators.
Interestingly, much of society is turning their back towards the demographic goldmine that Facebook stock is sitting on. The NFL celebrates “Hispanic Heritage Month,” and Mexico City hosted a regular-season game last year. After activists blasted the Academy of Motion Picture Arts and Sciences with the hashtag #OscarsSoWhite, the film industry made dramatic changes. According to NBC News, the “‘African-American Film Critics Association declared 2016 the best year for blacks in cinema ‘ever’.”
While these are profound steps towards diversity and inclusion, there’s a glaring omission. According to researchers at the University of Southern California, “‘at least half or more of all cinematic, television, or streaming stories” didn’t portray a single Asian or Asian-American on screen.'”
This “yellow-out” may be swept under the rug now, but mark my words, FB stock will change everything.
Asian Markets Too Bigly for FB Stock to Ignore
As InvestorPlace contributor Craig Adeyanju notes, the Facebook stock price is all about the numbers, and the numbers look amazing! Adeyanju writes that with “Facebook on course to reach 2 billion users this year without China, the opportunities become bigger once China allows FB in its country again. Keep in mind that China currently has the largest number of internet users globally.”
He is so right — the number of China’s internet users exceed that of the U.S. by a more than 150% margin. Those are bigly consumers that FB stock desperately wants to tap into. But they’re not that desperate. China is often overused as a justification for buying Facebook stock or any number of investments. However, just scale up the picture a bit and you’ll see why Mark Zuckerberg is so excited.
The majority of Earth’s human population is Asian, period. Even if you were to open a “heritage month” for every race, color and creed in America, you would at most affect less than 5% of the world. Adding in the entire Latin American population would help, but the leverage would be less than Africa, and slightly more than Europe.
An investment in Facebook stock is simply a recognition of a changing world. Unfortunately, few have this ability. For example, Princeton University detailed evidence of discrimination in academia designed to “cull” Asian student populations. In contrast, from the perspective of FB stock, these demographic trends are to be embraced, celebrated and ultimately, profited.
Untapped Riches Still Available for Facebook Stock
I mentioned before that China is an overused argument. But when you drill deeper into the statistics, there’s still a lot of gold for FB stock to mine. The perennial Asian powerhouse’s internet penetration is just slightly above half the population. In contrast, the U.S. internet penetration is nearly 89%. That’s the raw, low-hanging fruit from which Facebook stock can benefit.
But even in a place like Japan, where the internet penetration is more than 91%, there’s still a viable opportunity for FB. As of the midway point of last year, there were 26 million Japanese Facebook subscribers. That’s less than a 21% penetration rate for the company. Japan is actually an unheralded market: it has an incredibly educated, tech savvy population.
In many ways, that’s a better prospect for FB stock rather than activating developing or frontier markets because of the existing infrastructure.
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But the really exciting potential is that when developing countries reach the next stage, FB can spark a global revolution. Asia’s total Facebook penetration rate is less than 14% — just marginally better than Africa. That means that the company’s future is in Asian hands.
The North American market is near realistic capacity at 62%, while Latin America is not that far behind at 52%. Given the enormous economic growth in Asia, that’s not a bad gig for FB stock.
While the rest of the world is focused on the transition of power at 1600 Pennsylvania Avenue, Facebook has been looking at a trend decades in the making. Indeed, the movement is inevitable and will have far-reaching consequences well outside our lifetimes. They only thing any company can do is to prepare for it, and FB has a substantial lead.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
