The War Between Facebook (Instagram, WhatsApp) and Snapchat.
In 2011, an app was launched with a ghost icon and yellow background. Snapchat. Six years later and this app has hundreds of millions of daily users. Snapchat, which is now known as Snap Inc is now as stated in their company mission " A Camera Company". It was formally known as a story telling messaging platform. So what caused this change?
In 2013, Facebook offered to buy Snapchat for $3 Billion. Snapchat refused and CEO Evan Speigel stated the following: “There are very few people in the world who get to build a business like this. I think trading that for some short-term gain isn’t very interesting.” Snapchat began building momentum in 2014 and had seen rapid growth between Q1 2014 to Q3 2016 going from 47 million to 153 million daily users. The growth rate had decreased between q3 and q4 2016 at 3% compared to Q1 and q2 2016 at 17%. This indicates that the release of Instagram stories, by Facebook owned Instagram has already started to hurt Snapchats growth.
This would be concerning news for snapchat as Facebook has also added Snapchat like features to their Instagram, Facebook Messenger and Whatsapp applications. Companies who have existing Instagram accounts find it much more convenient to use Instagram stories because they have access to all their existing followers on Instagram and don't have to build a following on another platform. Instagram has added over 100 million more users in the last 6-8 months. The introduction of Instagram Live has also made the platform much more attractive. Live streaming is Hot and businesses are capitalising on it to improve customer engagement and building relationships with customers.
The recent launch of Whatsapp stories will also influence and hurt the growth of Snapchat. Whatsapp is already a popular messaging and calling app and now it's 1.2 billion monthly users ( as of January 17,2017) can also create and add stories all within the same app. Why would they go to another app to do so? The service handles more than 600 million photos and 64 billion overall messages daily.
Then there's Facebook Messenger, app that is downloaded in addition to the Facebook app, which was enhanced with Snapchat like features at the end of 2016. The addition of "Messenger Day" in regions where snapchat was least dominant clearly highlights the war Facebook is waging on Snapchat. With over 1 billion monthly users on Facebook Messenger, the number of Messenger day users is likely to increase and drag people away from snapchat. Be creating its messenger feature, Facebook has eliminated people messaging through the Traditional Facebook app and is forcing people to download the messenger app if they want to communicate with their Facebook friends on mobile devices. Facebook will continue to improve and enhance their messaging app as they have shown previously with their other products.
So from what we can see snapchat has an uphill battle on their hands. Facebook is definitely looking to slow the growth of the platform and leading to its eventual death. After snap chats recent IPO they stated that the company may never be profitable or even if it is profitable at some stages it will be very difficult to maintain.
The battle is definitely on and we will have to wait and see Snapchats response to Facebook's ever evolving platforms. The majority of Snapchats current users are between 18 and 34. The older consumer hasn't really found a reason to move over to snapchat. The company needs to add features that will attract and engage the 'older' consumer and then they may have a chance at longevity.
The race is on and battle is hot. Product, product, product is key. Twitter became stagnant because of lack of product innovation, Snapchat needs to move quickly and stay on the front foot before it is left behind....