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Analyst Eyes Snapchat’s Ecommerce Potential

In October, we posed the question, Should Online Sellers Build a Presence on Snapchat? This week, Wall Street analyst Bob Peck of SunTrust said ecommerce could be next for Snapchat in a new report on why digital media investors should monitor the social networking platform.

Looking at the numbers, he said media sharing and messaging app Snapchat has approximately 150 million daily active users, an estimated $350 million in revenue in 2016, and a prime 18-34 year-old demographic.

While Snapchat’s revenue is a fraction of Facebook’s revenue, there are concerns for its rivals: Snapchat is attracting users, advertising dollars and top talent away from other, slower growing, platforms, Peck said.

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Peck noted that Snapchat offers a peer‐to‐peer payment service called Snapcash powered by Square Cash. While he doesn’t believe it’s widely used, it would allow Snapchat to offer a “buy button” as other social sites have done, while keeping users inside the Snapchat ecosystem.

Here’s what Peck had to say about Snapchat’s ecommerce potential:

“Considering that Snapchat already has an integrated payments solution, we believe the next step for the company to take would be an entrance into ecommerce. We believe ecommerce for Snapchat initially would be something similar to the “buy button” that Facebook and Twitter have introduced on their platforms. We envision the buy button could be something similar to their current advertising offerings where the user sees see an ad that they could then engage with by swiping up to see more options like selecting a size or type and purchasing the product all in‐app.”

Snapchat is different than sites like Facebook and Twitter, and this excerpt from his report explains what makes it compelling, particularly for younger users:

“Today, as a normal part of life, we all share little moments between each other – either a quick conversation, a funny joke, or even a funny look. We do these every day naturally and we don’t need them (or want them) logged, saved, or permanent. We are happy to have had the quick conversation, but that moment has now passed. This is the natural human behavior that Snapchat has captured and has merely brought it online. We believe this is the heart of what makes Snapchat different than other sharing platforms.”

We opened the topic of selling on social networking sites to readers in October. Some said they were too busy, some said they had good success on Facebook Groups. Take a look and feel free to weigh in with your thoughts:

Comment on the EcommerceBytes Blog.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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