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Social video platform Snapchat has found itself embroiled in a massive controversy in India, after comments alleged to have been made by Snap Inc. CEO Evan Spiegel—in which he described the country as poor—went viral over the weekend.
According to documents filed as part of a lawsuit against Snap by former employee Anthony Pompliano, Spiegel allegedly described Snap as “only for rich people,” in comments made in 2015. He was also alleged to have said, “I don’t want to expand into poor countries like India and Spain.”
In a statement, Snap rejected those claims. “Those words were written by a disgruntled former employee. We are grateful for our Snapchat community in India and around the world,” the statement read.
Despite Snap’s attempts to distance itself from the alleged comments, the reaction to the report among Snapchat users in India after local media picked up on the details of the lawsuit was dramatic.
Thousands of Snapchat users in India reportedly uninstalled the app, and hashtags like #UninstallSnapchat and #BoycottSnapchat were trending Twitter topics in the country. Unhappy customers also hit Snapchat’s ratings on various app stores with a barrage of one-star reviews.
These recent events are clearly a press relations disaster for Snap’s operations in India and a new hurdle for its growth prospects. But the country also remains a market where Snapchat has not experienced the level of success seen by competitors like Facebook.
According to an analysis of social media and communications app usage conducted by Cheetah Mobile's Cheetah Lab in fall 2016, Facebook-owned properties occupy a dominant position among Android users in India. The research found that WhatsApp boasted a reach of 91.7% among that group, followed by Facebook (54.1%), Gmail (43.3%) and Facebook Messenger (40.4%).
Snapchat didn’t make it onto the list, but that might be because it was not included in Cheetah Lab’s analysis. However, there are other clues as to Snapchat’s poor market position in India.
According to a survey conducted by Kantar TNS in September 2016, Snapchat had a penetration rate of 19% among internet users in India. That figure trailed Facebook (75%), Twitter (34%) and Instagram (25%).
In addition, the Nikkei Asian Review reported that Snapchat has about 4 million users in India, compared with 200 million for WhatsApp.
It goes without saying that India remains an emerging digital market that is ignored at the peril of companies like Snap. There will be 429.2 million internet users and 267.1 million smartphone users in the country this year, eMarketer estimates.
But Snapchat’s growth may be limited by one of the very features that drove its adoption in the US—its video-focused nature. Mobile users in India are still struggling with oftentimes slow and expensive mobile service, and are likely sensitive to the amount of data a video-first platform like Snapchat consumes.
That dynamic may be upended by the launch of mobile service provider Reliance Jio, which now offers its subscribers access to 4G networks at drastically cheaper rates than its competitors. But cheap mobile broadband doesn’t appear to have helped Snapchat’s prospects in India just yet.
Although it is unlikely that Snapchat could have done anything to head off its current public relations nightmare in India, its experience should still be viewed with caution by Western brands operating in the market. Given the country’s history of colonialism, the merest hint of a Western company acting in a condescending or paternalistic fashion can have drastic repercussions.
Facebook learned that lesson the hard way in 2016, after its promises of free internet for India were loudly and publicly rebuffed by the country’s digerati. These opponents saw the program—called Free Basics—as a violation of the basic tenets of net neutrality, and criticized its privileging of access to Facebook over the wider internet as something resembling a digital land grab.
Paid media advertising outlays worldwide will increase 7.3% in 2017 to $583.91 billion. Growth will be roughly on par with previous estimates, and spending will rise at a steady pace throughout the forecast period, driven by increased investments in digital and mobile ads.
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