Jan 21 (Reuters) – Snap Inc (SNAP.N) is accelerating its global expansion into countries from Mexico to Japan through tie-ups with mobile carriers and by showcasing its popular augmented reality features, the company said. company at Reuters.
The parent company of photo messaging app Snapchat is relying on its relative safety during a time when social media platforms such as Meta’s Facebook (FB.O), Twitter (TWTR.N), YouTube and TikTok are under scrutiny in around the world for harmful content, lax privacy and cybersecurity protections, which has led to outright bans on services in some countries.
Snap has remained largely unscathed from governments and regulators around the world and has developed a playbook to lure users into new markets that bolsters the appeal of its lightweight AR (augmented reality) lenses, which can overlay images information about the physical world, and fleeting messaging between close friends.
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Since rebuilding its Android app in mid-2019, which made Snapchat more usable for people outside the United States and Europe, where Android is more widely used than iPhones, the company has reached a milestone. of the 100 million monthly users in India.
Globally, Snap has 500 million monthly users, the company said at its Partner Summit in May, adding that about 40% of its users are outside of North America and the United States. ‘Europe.
It now wants to deepen its presence in India and attract new users globally starting with Japan, Indonesia, Brazil, Mexico, Italy and Spain, a strategy that has yet to be announced. .
The move reflects how the majority of Snapchat users are now on Android after the upgraded app rolled out, whereas previously it was one of the few apps that was primarily used on Apple devices, it said. Nana Murugesan, Head of International Markets at Snap.
“We’ve seen the fruits of that come to fruition because Android is really driving our growth,” he said.
Snap’s strategy includes deals with telecom carriers and smartphone makers to pre-install Snapchat. The company said it is currently in talks with carriers in Mexico, Brazil, Italy and Spain to explore deals such as joint marketing or including the app in zero-rate plans, which allow customers to use an app without it counting against mobile data limits, and was a tactic that accelerated Facebook’s early expansion into regions where wireless data was expensive.
Snap is also opening new offices in Tokyo, Milan and Madrid this year to help support growth plans, the company said.
The expansion plan includes holding workshops with high school and college students to promote the app to younger users, adding media content in local languages to its Discover feature on Snapchat, which hosts original shows from entertainment studios, and the deployment of photo and video AR filters that celebrate local holidays and events.
In addition to focusing on AR, Snap has positioned itself in recent years as an app for keeping in touch with a close group, and an app where public content is controlled by the company, a distinction from apps like TikTok, where content creators aim to go viral.
That image could help Snap more easily penetrate Asian markets, where families are mindful of influences on their children, said Shailesh Rao, a former Google and Twitter executive who worked on international expansion.
“There’s a premium to security, and there’s a premium to knowing that your privacy is protected,” he said.
LUCRATIVE OPPORTUNITY IN JAPAN
Generating meaningful returns in these new markets could be difficult, said Arvind Rajan, former managing director of new markets for LinkedIn, which developed the professional networking site’s entry into China in 2014.
While attracting new users to India is easy given the large young population, US tech companies are struggling to make money in the country, he said.
In India, Snap tracks Meta Platform Inc’s Facebook and Instagram, which have 388 million and 257 million monthly active users respectively, according to app analytics firm App Annie. The abbreviated viral video app TikTok has been banned in India since 2020 due to privacy and data security concerns.
Gaining users in Japan, Brazil, Italy and Spain, in particular, will be key to laying the groundwork for Snap to grow its international revenue. The four countries are among the top 10 online advertising markets in the world, and the total amount spent on online ads in these markets was $33 billion in 2020, according to an August report from the company. researcher MoffettNathanson.
The Santa Monica, Calif.-based company, which earns revenue by selling advertising on Snapchat, still makes most of its money in North America. Its revenues from outside North America and Europe totaled $127 million during the third quarter, a 53% increase over the prior year.
Japan represents a lucrative opportunity, and Snap sees its AR features as a gateway. In August, the company hired its first employee in Japan to lead market development in the country.
Japan has a well-established AR developer community, and Snap wants to entice users as it makes advancements in its AR technology like its Spectacles glasses, Murugesan said, adding that the company is in talks to partner with a animation studio in Japan to create AR lenses.
The company is also hiring for a position that would build relationships and educate augmented reality developers in Japan, according to a job posting on Snap’s website.
“If you can understand the story of user growth (in Japan), you will make a lot of money,” Rajan said.
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Reporting by Sheila Dang in Dallas, additional reporting by Nivedita Balu in Bengaluru; edited by Kenneth Li and Bernard Orr
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