In a move aimed at boosting its advertising revenue as well as having a firm hold on the Indian market, Snap Inc (NYSE:SNAP) has formed a strategic partnership with ad-tech firm Tyroo. In the deal, Tyroo will help Snapchat in monetizing its ads in India.
Change of strategy
This is the first time that Snapchat is making deliberate attempts to increase its revenue from the Indian market. Unlike other Wall Street giants like Alphabet Inc Class C (NASDAQ:GOOG) and Facebook, Inc. Common Stock (NASDAQ:FB), Snapchat had not seen a lot of significance in the Indian market. At some point, Snapchat founder Evan Spiegel was quoted saying that the company is not focusing on “poor markets” like India.
In the deal, Tyroo, which is part of the Smile Group, will assist Snapchat to improve its advertiser base in India. In a statement, Snapchat said that it will be offering advertisers with an audience of more than nine million users in India. Currently Snapchat has more than 191 million users around the world.
According to Snap, the parent company of Snapchat, users spend more than 30 minutes in the app. It further adds that users visit the app around 25 times every single day.
In a statement, Geoffrey Reed, the head of international expansion at Snapchat, the partnership will play a strategic role of attracting Indian advertisers as well as help them discover the importance of connecting with Snapchat’s highly connected and engaged users.
Although details surrounding the agreement are still scanty, it is highly believed that it will be a revenue sharing deal between the companies.
The deal comes at a time when Snap is facing a backlash from users after its instituted design changes on the platform that did not go well with many users. At the height of this controversy, many celebrities closed down their Snapchat accounts. Additionally, the desire to grow revenue may have motivated the company to focus on India.
India holds enormous potential
India, the second largest populated country in world, has a promising future in terms of growing the user base. Out of a population of around 1.4 billion, the country had around 456 million internet users as of December 2017. According to a report by IAMAI, this number is expected to reach 478 million by June 2018, mainly driven by access to cheaper smartphone, affordable services and faster connectivity.