Social media firm Snap courts growth by focusing on partner businesses amid Covid-19

The company, which saw a hit to its ad revenue during the pandemic, is now seeing more business from traditional sectors like telecoms and automobiles

Hussein Freijeh, general manager of Snap for MENA, aims to capitalise on Egyptian market in the coming months. Courtesy Snap

Snap, the company that owns social media platform Snapchat, said it has made up for a slowdown in business amid the global pandemic by shifting focus to small businesses and helping them survive using the right digital tools and an engaging platform.

"Last December, we witnessed the highest ever business growth in the MENA region. We entered 2020 on high note … then Covid-19 came and it affected many industries such as travel, retail and luxury," Hussein Freijeh, general manager of Snap for Middle East and North Africa, told The National.

“Though we experienced a slowdown in growth [rate] … [we] still managed to have a strong business [volume]. As more people are staying at home, it is a huge opportunity for us to help small brands generate more income and engagements with their potential customers.”

Snap, whose messaging platform had 34 million monthly users in the Mena region as of January this year, saw its revenue fall as ad spending took a hit amid the Covid-19 outbreak.

Its global revenue dropped 17 per cent quarter-on-quarter to $462.5 million (Dh1.7 billion), whereas, the net loss was $306m in three months to March 31, nearly $65m more than the previous quarter.

While the company – which went public in 2017 – is yet to be profitable, it is seeing more traditional businesses such as restaurants, telecoms, automobiles and retail approaching it.

“We are observing increased engagement on our ads as businesses are [being] innovative to reach the right audience. We are helping them to go digital, reach the right market and increase overall ROIs (return-on-investment) significantly,” said Mr Freijeh.

“Before Covid-19, e-commerce was … limited to big names like Amazon and Noon. Now even traditional sectors are opting for it. We are seeing a new normal and many of these changes will be permanent.”

In order to attract more such businesses, the company introduced various new features during its Snap Partner Summit in California Thursday.

It is also allowing developers and businesses to build their own apps by using Snapchat’s tools and reach their audience using free distribution features.

“Brands can create stories and feature their apps and products … it is driving more downloads and business conversions. Many are doing it to just stay alive, during this crisis, while some are earning more income out of it,” said Mr Freijeh.

Many developers and small businesses are also advertising their apps on snapchat platform from where users can download them and engage with the companies. There has been a 36 per cent increase in the number of such apps installed from Snapchat and a 19 per cent increase in the swipe-up rate of apps in late March, compared to late February. Meanwhile, the time spent on Snapchat’s video and voice calling has grown by more than 50 per cent during the period.

It is also offering budget options to small advertisers to promote their products. Companies can advertise for as low as $5 per day on Snapchat, which is popular among millennials.

Saudi Arabia and the UAE – Arab world’s biggest economies – are the best performing markets for Snap in the Mena region. In Saudi Arabia, 90 per cent of the population between 13 years and 34 years is Snapchat user. In the UAE, this engagement is 60 per cent.

The company is now looking forward to expand in Egypt – region’s most populous country – and other GCC markets including Kuwait, Oman and Bahrain.

“The UAE and Saudi Arabia have one of the most engaged audiences in the world,” said Mr Freijeh.

“Kuwait is fast picking up … Egypt is also very interesting, we see a lot of potential there and will be putting in more efforts there.”