App data implies Snapchat user growth slowdown as analysts say Instagram's replication is 'bearing fruit'

Fresh data suggests Snapchat user growth slowdown

Snapchat is facing a lull in user growth according to app download data which claims that downloads of the app have decreased by 22% year-on-year worldwide.

The figure comes from app monitoring firm Sensor Tower, which has pinpointed data from the first two months of the second quarter and compared the number to Snap's downloads from the same period in 2016.

Snapchat's user retention has been a hot topic for investors and onlookers alike since the company went public in March. Ahead of floating on the NY stock exchange the Venice beach upstart-turned-unicorn promised shareholders growth, not profit – meaning it's unlikely Snapchat wants to see external data around user growth decline.

Snapchat's parent firm, Snap Inc, released its first quarterly results since going public in May and failed to meet expectations. Daily active users (DAU) numbered 166 million, an increase of 36% year-over-year, although analysts had expected its DAU count to be closer to the 188 million mark.

Writing on Wednesday, Nomura Instinet analyst Anthony DiClemente said of the data: "Our overall takeaway from these datapoints is that Instagram's strategy of replicating key aspects of Snap's use case is bearing fruit, limiting Snap's ability to attract new users."

He noted that Instagram downloads demonstrated year-on-year growth in the same timeframe, suggesting that "competitive pressures may be intensifying for Snap," and challenging the platform's ability to court and retain new users.

DiClemente attributed the download dip in part to iOS seasonality, as well as the period it was compared to last year in which Snapchat had only unveiled its Lenses offering a few months' previous. However he said, like other analysts, he was surprised that a newly public company in its early growth cycle would see "near-term results impacted by broarder seasonable ad market trends."

Snapchat has been putting up a good fight against Instagram's continual pursue of its USP, launching a series of camera updates just last month. Its recently introduced New World Lenses are also placing increasing emphasis on the back facing camera, showing the platform is taking a fresh approach to the competition.

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