At the early part of last year, things were going well for Snapchat. But ever since its rival Instagram launched Stories, Snapchat seems to have suffered a significant decline in growth, at least according to statistics contained in its IPO filing. This appears to be consistent with what various industry watchers have observed -- that Snapchat usage has been impacted dramatically by the roll out of Instagram Stories.
There is no sure way of determining if Instagram Stories has indeed caused Snapchat’s slowed growth, but signs do suggest strongly that as Stories gained some traction among mobile users, Snapchat seems to have lost some steam. Although some analysts are also pointing out that the growing popularity of Snow, another competitor to Snapchat, also has something to do with it. As for Snapchat, it is claiming that its own technical errors are the culprit behind the slowed growth, not the competition as suggested by so many.
During the first quarter of last year, Snapchat had 122 million daily active users on average, posting growth of 14 percent compared to the previous quarter. But by the time the second quarter concluded, the company recorded its best quarterly growth ever, which can be attributed to the exploding popularity of full screen visual communication, plus a lack of rivals in the market. In Q2 2016, Snapchat had breached 143 million daily users, posting a truly remarkable 17.2 percent growth rate.
But then came August, which saw Instagram introduce a copy of Snapchat Stories at the top of its mobile app, which at that time was being used by 300 million users daily and half a billion people every month. A couple of months later, Instagram Stories reach would expand further to a hundred million daily users.
It was around this time that Snapchat began to stall. As a matter of fact, it registered its lowest percentage of quarterly growth since the start of its publicly accessible data in 2014. Indeed, the company just managed a growth rate of 7 percent during the third quarter of last year, reaching 153 million daily users. By the time the final quarter of 2016 rolled in, Instagram Stories had reached 150 million daily users, quickly gaining on Snapchat’s number. As for Snapchat, it had only managed to achieve an average daily user count of 158 million, while suffering through a 3.2 percent growth in the last three months of 2016.
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