Some valuable lessons
Snap’s (SNAP) goal is to become a global company, chief strategist Jared Grusd said at The Wall Street Journal‘s Technology Conference in Hong Kong in June. The company’s globalization plan involves learning from successful Chinese social media companies, particularly Tencent (TCEHY) and TikTok.
From Tencent, Snap is learning about innovation. Tencent is the name behind the widely popular WeChat app, which in addition to being a social network, has payment features. Snap also tried its luck in the payment business but folded up those efforts by shutting its Venmo-like Snapcash app last year. Venmo, a PayPal (PYPL) mobile payment service, boasts over 40 million users. Tencent is also in the videogame business, where Newzoo has ranked it in top in terms of game revenue. Tencent generated $19.7 billion in game revenue in 2019, ranking ahead of Sony (SNE) at $14.2 billion and Microsoft (MSFT) at $9.8 billion. Snap launched a gaming platform within its Snapchat app a few months ago.
TikTok shows Snap demand for mobile videos
From TikTok, Snap has learned that the global demand for mobile video is strong. The TikTok platform, where people come to share playful, short video clips, reached one billion downloads globally this February. And in a rare achievement for a Chinese app, TikTok has been a hit in western markets as well, with nearly 100 million US downloads, according to Sensor Tower. Snap’s Snapchat social app is not available in China. Snapchat finished the first quarter with 190 million daily users globally.