Back in March, Snap – the company behind Snapchat – pulled off the biggest tech flotation in years, when it went public at £18.5bn. However, shares fell last week to a new low following news it had signed only 7.3 million new users in the last quarter. This was a massive slowdown over previous results.
Snapchat has a loyal following particularly among young users, but many are now questioning the platform’s ability to grow across the globe in the same way Facebook has.
So what happened?
In short, Instagram happened.
Instagram’s relentless cloning of Snapchat features seems to be having the desired effect – the choking of Snapchat’s expansion. Meanwhile, Instagram is flourishing. Instagram Stories has amassed 250 million daily users in the year since it launched. In comparison, Snapchat had only 173 million in the last quarter. And that’s all of Snapchat, not just the their Stories feature. Instagram’s up to 400 million.
This spells bad news for Snapchat. It’s a sign it could be relegated to a niche platform for the young, rather than a world dominator like Facebook, and the stock market has reacted. Whilst things are slowing for the platform, it’s too soon to write it off completely. Snapchat’s a real social innovator – it leads, whilst others follow. We think there’s plenty up the ghost’s sleeves yet.