It's been said that good artists copy and great artists steal. Vanishing-video phenomenon Snapchat can relate.
Tied for the seventh most valuable private start-up in the world, according The Wall Street Journal, the four-year old company may be the most disruptive force to hit the technology and media worlds since Facebook's (NASDAQ:FB) similar ascent years ago. However, as Snapchat shifts to prioritize revenue growth ahead of an eventual IPO, a new threat to its global dominance has emerged.
Its name is Snow.
Snapchat's greatest threat?
Whereas other competitors, such as Facebook and Twitter, have incorporated similar pieces of Snapchat's popular product into their own services, Snow appears to have simply copied the entire platform.
Launched just last September, the South Korean social-media service has since amassed a staggering 30 million total downloads across the several Southeast Asian countries in which it operates. Nearly a mirror image of Snapchat, Snow's smartphone app allows users to send vanishing timed messages, add image filters to videos and photos taken on the app, and view friends' videos in a section of the app called "Stories." Sound familiar? In fact, the only thing that's not a carbon copy is Snapchat's recently added Memories, a feature that Snow could also easily replicate in due course.
When The New York Times inquired about the similarities, a Snow spokesperson admitted the two platforms share many similarities but also highlighted features unique to Snow, such as video chatting.
For now, Snow remains a small, insurgent threat to Snapchat's global ambitions. Whereas the California-based Snapchat enjoys over 150 million daily active users, Snow has been downloaded only 30 million times, and that figure probably overstates users regularly engaging with the service.
However, Snow's ascent also speaks to an important trend shaping the wider technology industry, one that tech investors need to understand.
Sign of the times
The rise of Snow -- and that of its South Korean parent company, Naver -- represents an important threat to the global ambitions of Western-tech platforms such as Snapchat, Facebook, and others. In recent years, international tech companies such as Naver and China's Tencent (OTC:TCEHY) (OTC:TCTZ.F) have rolled out tech services that often amount to copycat products. The most recent example of this trend is last week's successful IPO of mobile-messaging platform Line (NYSE:LN), which Snow's parent, Naver, also owns.
Line, WeChat, and Snow have all launched products in Asia that mirror successful Western tech platforms before the Western equivalents could establish a presence in the region. As venture capitalist Tim Chae explained to The New York Times, "A lot of start-ups are thinking if they build a product, they'll be able to go global, but that's just not the case anymore." The Asian proxies could indeed be an obstacle for the long-term growth of services such as Snapchat and Facebook Messenger.
Today, WeChat counts over 700 million monthly active users (MAUs), and Line's IPO prospectus says the messaging platform enjoys 218 million MAUs. In amassing over 30 million downloads since its launch last September, Snow seems well on its way to achieving similar popularity in Asia.
This new wave of social and messaging applications could especially pose a threat in China, the world's largest internet market. While WhatsApp is available in China, both Snapchat and Facebook Messenger are blocked. Snow and Tencent's WeChat, meanwhile, appear to have filled the void of their Western counterparts.
It isn't clear to what degree U.S.-based social-media giants such as Facebook and Snapchat will be affected. But there surely will be an effect at the hands of these highly-capable regional competitors.