INSTAGRAM STORIES CAUSES SNAPCHAT’S GROWTH TO DECLINE BY 82%.😲📉
Snapchat was flying real high in early 2016💸, but when direct competitor Instagram launched Instagram Stories, it came hand in hand with a massive drop in how fast Snapchat was growing, judging by new stats in its IPO filing.
All of which supports a report that multiple analytic providers and social media talent managers saw a big decline in Snapchat usage after Instagram Stories came out.
While we can’t be sure Instagram Stories directly caused the issue🤔, its rapid rise📈 is highly correlated with Snapchat’s slow decline📉. The rise of international Snapchat Stories competitor Snow also could have contributed. Meanwhile, Snap says technical errors in the roll out of new products may have inhibited user growth at the end of Q3.
In Q1 2016, Snapchat averaged 122 million daily active users, having grown 14 percent over the past quarter. Then Q2 proved to be its best growth quarter ever, thanks to massive interest in full-screen visual communication and a lack of direct competitors. Snapchat hit 143 million daily users with a whopping 17.2 percent growth rate.
But on August 2nd, Snapchat’s much larger competitor Instagram launched an exact clone🚶 of Snapchat Stories at the top of its app used by 300 million people daily and 500 million people each month. By October, the feature had 100 million daily users of its own.
Suddenly, Snapchat slowed down. It had its lowest percentage growth quarter since the beginning of its publicly available data in 2014. Snapchat grew just 7 percent in Q3 2016 to reach 153 million daily users. And in Q4 it sank further, as Instagram Stories reached 150 million daily users, just shy of Snapchat’s total number. Snapchat only pulled in an average daily user count of 158 million with a 3.2 percent growth rate in Q4.
That means Snapchat was growing at just one-fifth of the speed it was two quarters earlier. Its growth rate actually slowed beneath that of Facebook, which grew daily users 4.2 percent in Q4 to reach 1.23 billion. By December, Snapchat had 161 million users, but that’s not enough to buck this trend. If you calculated the growth between the Q3 average and December 2016, it would still only be 5.2 percent.
Lack of progress in the international “rest of world” market that includes developing countries and Asia seems to have contributed to the slow down. Snapchat reported 39 million daily users in this region in Q3, then the same number in Q4. That could be because Instagram has 80 percent of its users outside of the U.S., and its Stories product quickly gained steam in these markets. South Korean app Snow also was on the rise in late 2016 and could have inhibited Snapchat’s growth.