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Snap Inc., the parent company of ephemeral messaging app Snapchat, has announced plans to form a research and development (R&D) team in China, according to CNN.
The startup indicated that it's building the team to focus on Spectacles, its connected, camera-enabled sunglasses.
Though Snapchat is currently banned in China, this move points to the company's desire to build relations in the world's largest market.
Setting up an office in Shenzhen is a clever strategic move for Snap.
- It puts Snap on the ground floor of innovation. China is a bellwether for mobile trends, and its mobile-first users are rapid adopters of innovative tech, which is only just now coming to Western markets. For instance, popular messaging app WeChat, which offers a slew of in-app experiences, is being used as a blueprint for apps like Facebook Messenger.
- It could signal a broader release of Spectacles. Snap’s wearables have had only a limited release as the company builds up demand and consumers awareness. Chinese consumers are among some of the most receptive in the world to ancillary connected devices. Wearables, including smartwatches and fitness bands, reached 47% penetration in December 2016, according to Deloitte. This would make China a perfect market for Spectacles, which tether to users’ phones to post videos on Snapchat.
- It opens Snapchat to more ad revenue leads. Chinese businesses that want to break out into the international market could find it easier to work with local developers through Snap’s Shenzhen office. This could be a boon for Snap, which may soon need to compete against Facebook Messenger and Instagram’s new Snapchat-like capabilities.
Snap will still need to contend with China’s increasingly strict censorship rules. US tech companies — including Facebook, Twitter, Instagram, and YouTube — are banned from operating in the country, in part because of its strict regulations, which require that all user data remain within its borders and be made accessible to government scrutiny. Because of this, in the meantime it’s unlikely that the company will use the Shenzhen office for much besides R&D.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile video that takes a look at how short-form mobile video has exploded. The report examines how YouTube, the historically dominant force in short-form video, was slow to implement a mobile video strategy, opening the door for new players —namely Facebook and Snapchat — to emerge.
It also takes a look at how winners will begin to emerge in distinct video content categories. YouTube, for instance, will rely heavily on its homegrown YouTube stars to distinguish its video library and drive loyalty. Facebook will become the go-to place for brands and media companies to engage with the largest audience. And Snapchat will utilize its live-events coverage and exclusive content to promote video communication among younger mobile audiences.
Here are some key takeaways from the report:
- The rise in mobile video viewing can be attributed to several factors: an increase in overall time spent on mobile, the convenience of on-demand viewing, a preference for digital video viewing, and the increased availability of mobile video content.
- As video becomes mobile-first, YouTube's hold on the short-form video industry is waning. The number of videos that are uploaded to the platform per month has remained stagnant over the past year, according to Socialbakers data shared with BI Intelligence.
- Facebook is in the best position to upset YouTube as the go-to place for brand and media companies to upload videos and for users to watch these videos. Although Snapchat may not be competing with Facebook and YouTube on video volume, the app is changing how consumers, brands, and publishers are using mobile video for communication, news and entertainment, and live-event coverage.
In full, the report:
- Maps out the rise of mobile video viewing and lays out the main drivers of this trend.
- Examines why YouTube's hold on the short-form video industry is waning as viewers migrate to mobile viewing.
- Illustrates the dramatic increase in the number of videos that brands and media companies are publishing to Facebook over the past year.
- Forecasts the number of videos that US brands and media companies will publish to both Facebook and YouTube in 2016.
- Explains how Snapchat is able to compete with larger video platforms and is changing how brands, media companies, and consumers are using mobile video.
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