An increase in local data prices led to slower user growth for Meta in India during the December 2021 quarter. The social media giant lost about $250 billion in market value in the biggest single day wipeout in history, as shares plunged 26 percent on Thursday.
"Facebook user growth was impacted by a few headwinds in the fourth quarter. In Asia-Pacific and Rest of World, we believe COVID resurgences during prior periods pulled forward user growth," said CFO David Wehner in an earnings call.
"User growth in India was also limited by an increase in data package pricing. In addition to these factors, we believe competitive services are negatively impacting growth, particularly with younger audiences."David Wehner, Meta CFO
Telecom companies Bharti Airtel, Vodafone Idea and Reliance Jio had increased their data rates in the range of 18 to 25 percent in the December quarter.
"If you look at the Rest of World, we've seen some headwinds there, kind of a little bit unique in the quarter in areas like India, where we saw data plan pricing increase lead to slower growth there. So that's another kind of some unique elements of the quarter on that front," Wehner added.
Competition From TikTok
Though Meta's overall growth was positive, it's social media platform Facebook experienced a decline in daily users for the first time. It had 1.929 billion daily active users compared to 1.93 billion in the previous quarter.
Zuckerberg personally called out two things that had an impact on Meta, TikTok and Reels.
"People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long-term."Mark Zuckerberg
"We’re in the middle of a transition on our own services towards short-form video like Reels. So as more activity shifts towards this medium, we’re replacing some time in News Feed and other higher monetizing services," he added.
He also pointed out that there was stagnation in saturated markets.
"If you look at kind of the overall user growth landscape for the fourth quarter, we're seeing MAU and DAU in the US and Canada sort of bounce around at sort of expected and indicated given our high level of penetration," he said.