How companies ride on copycats to stay ahead of competition

Copycat products have triggered rafts of law, and disputes from time immemorial, but they continue to be a fast track to market dominance, for larger companies that move to copy the innovations of their competitors or newcomers.

Social media giant Facebook, for instance, has for the last year copied the features of its competitor, Snapchat, as a way of retaining its users. This, in turn, has slowed its competitor’s growth rate as its users opt to embrace the new features on their existing Facebook accounts, rather than open a new account with Snapchat in order to enjoy them.

"In Kenya, Facebook has approximately eight million users. In order to keep them interested in the platform, it has to identify and adapt to the new trends because there is no loyalty in social media use. Consumers will go where they are comfortable,” said Moses Kemibaro, Founder of Dotsavvy, a digital business agency.

“Also, with the target market being mostly young users, the network effect comes into play and thus it maintains relevance by imitating what its competitor does in order to keep them grounded.”

Facebook has over two billion active users per month globally, while its other platform Instagram has over 800 million users, and WhatsApp has over one billion daily active users. To maintain its lead, Facebook is thus tasked with retaining its customers and has held up its dominance in the market with an imitation strategy that has paid off.

Last year in August, Facebook launched Instagram Stories, a feature that allows users to take a picture or video that disappears 24 hours after posting.

The feature also enables consumers to customise the posts with digital stickers, doodles and filters, which was Snapchat’s unique selling point from its launch in 2011.

Within months of the launch of Instagram Stories, Snapchat’s market share declined significantly. In the first quarter of this year, Instagram Stories announced that it had 200 million daily active users globally, surpassing Snapchat’s 158 million users, according to TechCrunch, a technology website. Its growth rate had also slowed by 82 per cent following the launch of Instagram Stories.

Moreover, with its revised features and offerings, Facebook is winning over social media influencers. In the second quarter of this year, Instagram stories reported an 11 per cent rise in influencer posting, while Snapchat recorded a 20 per cent decline, according to data-analysis company Captiv8.

Thus by imitating its competitor, Facebook stemmed the flow of its users to an even better product and even won back those that had left as it delivered what they wanted.

“Good imitators do not wait; they actively search for ideas worth copying. And they often look far from their industry or home country. They also do not just copy an idea, they come up with a cheaper or better — increasingly it is cheaper and better — mousetrap. They disrupt the innovator, whose costs are higher by a third, on average, and who is still sinking investments into the innovation, while the imitators are building an offering based on the market reaction to it,” said Oded Shenkar, a professor at Ohio State University’s Fisher College of Business and the author of Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge in the Harvard Business Review article Imitation Is More Valuable Than Innovation.

“According to animal researchers, the capacity to imitate is what enabled the great apes to survive in a hostile environment despite significant physical shortcomings. I would argue that the same is true in the business jungle.”

Therefore, as much as innovation is still key in company progress, in order to survive in the market and retain consumers when new competitors enter, imitation can be critical for market leaders.

African Laughter