Investing.com - Snapchat is facing quite a bit of competition from Instagram.
Instagram, the photo-sharing app owned by Facebook (NASDAQ:FB), announced that they have reached 800 million monthly active users, adding 100 million new users in the past six months.
By comparison, Snap has 173 million daily active users and experienced 10% user growth in the last 2 quarters, and added only 15 million new users in the past six months.
This discrepancy could pose a real problem for Snapchat. Instagram has copied Snapchat features like Stories, augmented reality filters, hashtag stickers and direct messaging tools, so users of both apps already see a great deal of overlap.
What may be more worrying for Snap is the massive success Instagram has had in monetization. Since March, Instagram has doubled its business community and grown to 2 million advertisers.
If Snap’s global user growth continues to lag Instagram’s it could become less attractive to advertisers – and since all of Snap's revenue is essentially ad revenue, the company's top and bottom line would suffer.
Unless Snapchat can come up with a truly unique feature, they'll continue to struggle in user acquisition and in revenue growth. Social networks are a fast changing environment, and if Snap can't grow fast, they won't be able to compete for long.