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Why Japan Is Important to Twitter

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Dec. 4 2020, Updated 10:43 a.m. ET

Digital ad spending in Japan to hit $12.4 billion

Japan is Twitter’s (TWTR) second-largest market after the United States. Twitter’s revenue from Japan grew 65% YoY (year-over-year) in the latest quarter, faster than its 44% YoY overall international revenue growth and its 10% YoY US revenue growth.

Twitter expects to continue growing in Japan, as it has determined that the Japanese advertising market is uniquely agency concentrated and has, in turn, adapted its execution in the region. Spending on digital ads in Japan is poised to hit $12.4 billion this year, according to eMarketer, but that would only represent 30% of total media ad spending in Japan. The growth potential for digital ad providers such as Twitter is huge in Japan.

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eBay acquired Japanese online marketplace Qoo10

Japan, whose e-commerce industry is poised to grow to $111.2 billion by 2021 from $90 billion in 2016, is a key target market for many digital companies. Alphabet’s (GOOGL) Google recently opened its first overseas office in Japan. Google invested $550 million in JD.com (JD) in June. JD.com is one of the leading e-commerce companies eyeing expansion in Japan.

eBay (EBAY) recently expanded in Japan through its acquisition of Japan-based online marketplace operator Qoo10. Alibaba (BABA) has disclosed plans to significantly increase Japanese product listings at its online and physical retail stores.

Looking to Japan for product clues

For Twitter, Japan has also been an important source of product clues. The company said recently that features such as Bookmarks and the move to double the post character limit for its users arose from observations it made in markets such as Japan.

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