Snapchat Under Fire After CEO Comments

By Dylan Walko,
Technology & Innovation Writer

Snapchat, a simple selfie app that has grown into the biggest tech IPO since Facebook is now under fire from their community users in Spain, India and other emerging market regions around the world.  This wave of disapproval sprung up after CEO Evan Spiegel supposedly said that the app was designed “only for rich people,” according to Business Insider.  On March 2nd, Snap had officially gone public on the NYSE trading at $24 per share creating a market capitalization of just around $33 billion.  In the days to follow they saw an uptick in value and the company that had once been criticized for not having the proper means to create revenue and attract capitalists was on the rise.  But with this news break, it will be interesting to see how the infant corporation handles this international PR nightmare.

The original feed of this quote had come from a former Snap employee, Anthony Pompliano, who served as the company’s growth lead for a short term in 2015.  Even with Snap calling the quote “ridiculous”, many users around the world have hit Snap where it hurts the most in the tech driven world we live in, on the reviews page within Googles Play Store and Apple’s App Store.  Users overseas have been giving the app one-star reviews and leaving heated comments to boot.  One user, Shashwat Hota used phrases such as, “I only hope that this company of your goes down the gutter real soon.  Or at least you go down the gutter.”

The LA Times reported that Indian users have adopted the hashtag #boycottSnapchat to create a socio-economic movement to fight back against powerhouse.  A user by the name of Shreya Tewari tweeted on April 16th, “I was addicted to @Snapchat but I love my country more than this app. Let’s see how you earn without Indians. @evanspiegel #boycottsnapchat.”  With such an influx in negative commentary Snapchat quickly broke out statistical data to justify their marketing scheme. Snap has reported that it intends to expand mostly in areas with the highest potential for advertising revenue and the most robust infrastructure to meet the needs of a wide range of mobile users.  The company did divulge to the SEC that the app will be used significantly less in countries where people do not have access to the newest  and most sophisticated smart phones, as well as countries that lack speedy mobile broadband for the masses.  With all alleged comments from Spiegel aside, Snap may make a viable point when it comes to focusing more on developed countries that those that are just beginning their climb.  Market research done by firm IDC was also cited by Snap stating that the top 10 countries on their list account for 70 percent of overall ad revenue and 85 percent of mobile ad spending.  Yet there is a discrepancy when it comes to Snapchat versus other social networks in terms of their top 10 usage rates.  For example, Facebook has approximately (in millions) 1,968 users worldwide compared to Snapchat’s 300.  Yet, India is ranked second in overall users for Facebook, with 213 million compared to Snap’s 4 million users according to Statistica and the Guardian.  Of course, Facebook has had a footing in the industry for more years than Snap but the greater willingness to expand is evident.

But even with all the controversy, it is difficult to argue that countries such as India are viable internet and mobile options are this point in time, continuing to be a tough market to crack into.  India currently only has roughly 432 million internet users compared to the 750 million who have yet to become connected.  Even Facebook last year had a setback when CEO Mark Zuckerberg attempted to provide free mobile internet to the greater majority of Indian residents.  This plan was foiled though by the government when it was ruled a violation of net neutrality.  Amazon also had a mishap with the Indian prime minister after he threatened to revoke the visas of company employees after news had spread that their Canadian store was selling doormats depicting the Indian flag.

Through all of this, Snap will have to resolve the allegations and form a worthwhile PR campaign to make amends.  It could be easier said than done, but with so much at stake in a country with unimaginable worth once the country is fully connected to the internet, it may be in Spiegel’s best interest to bite the bullet and admit his wrongs or go to court and defend his integrity and namesake.

A version of this article appeared in the Tuesday, April 25th, 2017 print edition.

Contact Dylan at
dylan.walko@student.shu.edu

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