Facebook Inc. (NASDAQ: FB) is the most popular social networking platform with around 1.13 billion daily active users. To reap the benefits of this massive user-base, the social media giant recently introduced Marketplace, a buying and selling platform for local buyers and sellers. The Marketplace is a platform within Facebook which facilitates discovering, buying and selling of items with people in a community. Earlier, Facebook had introduced buying and selling feature in Facebook groups which served to connect sellers and buyers, and which also had around 450 million visitors every month. However, Marketplace is a separate and enhanced platform for buying and selling.
Marketplace opens with images of items that people near you have listed on the platform. You can filter your search by location, pricing details and also by categories like apparels, household, and electronics. You can easily adjust the location to fit your search requirements. Tapping on the product image will show you information like product details and seller details. Integration with Facebook Messenger helps buyers and seller connect seamlessly. It also includes features like posting an item to a particular buyer and seller group and tracking past transaction and activities. However, Facebook does not facilitate delivery or payment of the items. Currently, it also lacks the buyer and seller rating option.
The Marketplace will roll out on mobile apps to everyone above the age of 18 years in the UK, US, Australia and New Zealand in few days. The desktop version will follow suite in the coming months.
Facebook Marketplace: Tapping $4 Trillion Industry
This is not the first time that Facebook has launched Marketplace. It had launched Marketplace back in 2007 also but had to shut it down later since the online market was not much in consideration by people at that time. It looks like Facebook had plans to enter the online selling market for a long time, but was holding patience. This time, Facebook launched Marketplace once again with the aim to dominate the global eCommerce industry.
The worldwide retail eCommerce sales are estimated to grow from $1.915 trillion to $4.058 trillion by 2020. The growth expectations are very high, which can be a beneficial point for Facebook Marketplace. The time is ripe for Facebook to grab a sizable share of the market which is supposed to increase by a whopping $2.143 trillion in next four years. Also, it is a perfect time since online sales are overtaking offline sales.
Most of the users have now turned towards mobile for online purchases. Mobile and Internet penetration have been very deep due to which every market player is trying to go beyond the political boundaries to capture more and more markets. Around 47% (3.43 billion) of the world’s population are currently using the internet. Out of this, only 1.61 billion people make online purchases. From these figures it’s clearly evident that nearly 2 billion internet users are yet to make their first online purchase, eventually creating a big window of opportunity for all e-tailers and e-marketplaces. Considering the fact almost half of internet users have already boarded Facebook, Facebook Marketplace has an excellent opportunity to explore and gain a fresh share from the remaining 1.82 billion internet users.
Internet being the backbone, Facebook is also working towards increasing the number of internet users worldwide by providing free Wi-Fi in public places. If Facebook gets a positive response for Marketplace, which is very likely, it will be a significant threat to other online retailers like Amazon, Flipkart, and Alibaba who are struggling in the competition.
Facebook Marketplace Has An Advantage Over Competitors
Facebook Marketplace will also majorly affect local classified sites likes of Craigslist, Olx (India), Quikr. Facebook has the edge over all these players with the highest number of users, user database, and popularity. This social media networking platform has become an integral part of the day to day activities for the majority of the users in the U.S. The users spend most of their digital time on the Facebook mobile app. This is also one of the reasons why Facebook has decided to roll out Marketplace initially on mobile apps.
After the launch, Facebook shares went marginally higher while the shares of eBay fell by more than 1%.
Facebook smartly inserted videos on its timeline which became the ideal platform for the marketers for video ads, beating YouTube. Over the years, Facebook gained all the required attention from the users. It then started monetizing through advertisements and businesses. Similarly, once Marketplace gains momentum, it will be another platform for monetization.
After we are confident we’ve built out a great product experience for people, we’ll look into introducing business if it makes sense, and after that we’ll look at how we could potentially monetize the surface, said Bowen Pan, Marketplace Product Manager.
The launch is highly justified for Zuckerberg and team. The online market, at present, is highly dynamic for the existing players. Hence, only future will reveal how the impact of Facebook’s Marketplace in the market!