Instagram and Facebook are reeling in TikTok

• Reels is Meta's short-form video service that competes with TikTok.
• TikTok has been growing like a weed for years, but it's 'flattening' now, Morgan Stanley found.

TikTok has grown like a weed for years, prompting Meta CEO Mark Zuckerberg to pull another clone out of this social-media bag.

That service, known as Reels, is beginning to make headway against TikTok, according to a new survey by Morgan Stanley.

The brokerage firm conducted a 2,000-person study in April focused on tech adoption and found that 74% of Instagram users use Reels, up from 69% in September 2022 and 62% in March of that year.

Complimentary Tech Event

Transform talent with learning that works

Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More

On the main Facebook app, 65% of users engage with Reels versus 54% in September 2022 and 47% in March of that year.

Meanwhile, 49% of survey respondents said they use TikTok, up from 47% in September 2022 and 45% in March last year.

"This flattening of TikTok adoption as other platforms rise is notable," the Morgan Stanley analysts wrote in a note to investors.

Even Snap's answer to TikTok is gaining steam, with 60% of Snapchat users engaging with Spotlight, up from 49% in September, according to the brokerage firm's survey.

TikTok's rapid ascent has threatened Meta's dominance of social media in the Western world, especially by luring younger users. If Reels is finally catching on, that's good news for Meta and Zuckerberg.

"This data, combined with Meta highlighting how Reels time spent is increasingly incremental and the fact that monetization on Reels is set to continue to ramp over coming quarters (ad load and pricing) give us more confidence in Meta's ability to drive durable multi-year revenue growth," the Morgan Stanley analysts wrote.