Facebook takes on Amazon with eCommerce strategy
In addition to being a social platform, Facebook is looking to become a must-see eCommerce destination. That's why Mark Zuckerberg's social network is launching a new "Shopping" tab within its application, as reported by the Financial Times. This tab will allow businesses to set up digital storefronts and sell directly to users on Facebook. This feature marks once again Facebook’s ambition to become a major player in the field of eCommerce. The venture, which is Facebook’s most significant incursion into eCommerce to date, represents a challenge to Amazon because of the vast number of users that Facebook can channel to storefronts. Many brands are scaling back their advertising budget. The Facebook Advertising revenue stream is somewhat volatile, as it was seen in multiple cases of unapproved marketing content posted by advertisers which pushed others to boycott the platform.
A new Facebook digital storefront to make shopping easier
While the Covid-19 pandemic has profoundly changed consumer buying habits in favour of online sales, Facebook sees a new opportunity to develop its business. Far from losing its way, Mark Zuckerberg's social network is launching worldwide tests of a new shopping tab within its application; it will allow users to easily find and buy products from different brands. This news echoes the recent launch of Instagram Shop at the end of July 2020.
In addition to this new tab, the firm is also announcing new tools for companies that sell their products on both Facebook and Instagram. These companies will be able to take advantage of new customization options, in-depth analytics features to measure their performance, but also and especially a new messaging option allowing customers to send messages directly to them via Messenger, Instagram Direct and soon, WhatsApp. Sellers will also be able to organize live buying events where they can broadcast and showcase their products, an option that will initially only be available in the United States.
Finally, Instagram Checkout, which allows brands to conduct transactions directly from the application, is being extended to all eligible sellers in the U.S. Transaction fees will be waived until the end of the year due to the pandemic.
Facebook has been cautiously thinking about its international rollout strategy, they are looking to deploy primarily in markets where the company has the resources to vet sellers properly — as rivals such as Amazon battle against counterfeits. They would focus the rollout in the US and western Europe.
Facebook is dreaming of becoming an eCommerce giant
These new functionalities available on Facebook as well as on Instagram, show without any detour the ambition of Mark Zuckerberg's group to become a giant of eCommerce and to take on Amazon. A strategy that has already been underway for a long time, with the launch of Instagram Shopping in 2018, but which is clearly accelerating in this year 2020 with the launch, of Facebook Shops.
There is nothing surprising about this, Covid-19 has profoundly changed the expectations and purchasing habits of consumers, who are now turning more and more to online sales. An unprecedented context that has created new business opportunities. Facebook has understood it well and intends to seize each one of them to continue to prosper and evolve while offering the smallest companies the technical means to follow this heavy phase of transformation.