Facebook Shops: Looking Beyond Ad Dollars!

Facebook has 2.6 billion monthly active users - the largest userbase a single platform has got till now. Advertising accounts for 98% of the company's overall quarterly revenue. However, amid a global outbreak, all major brands are pulling back on advertising spend broadly and Facebook admitted to being affected by as well. Can Facebook Shops emerge as a new avenue for revenue to keep the growth intact?


Amid this global pandemic, when companies are struggling to find new verticals to pivot towards in order to maintain their revenue and stay afloat, Facebook has already figured out their unique angle. The social media giant now wants its users to start clicking ‘buy’ along with ‘like’ by betting big on e-commerce.

Mark Zuckerberg, on Tuesday, announced that a new set of features will be rolling out pretty soon which will be aimed towards making both Facebook and Instagram complete online shopping destinations. The news immediately influenced Facebook’s stocks which popped up to an all-time high yesterday, up by 6% as of 12:45 p.m. EDT.

These new features will enable all struggling brick-and-mortar businesses which got hit badly due to the COVID-19 to sell to their customers online from within the platforms. Collectively these features have been named ‘Facebook Shops’ and they will provide highly customizable online storefronts which will be available via a Facebook page or an Instagram profile. General users will be able to browse and purchase items from these storefronts without leaving these platforms.

Zuckerberg who made this announcement via a live stream on Facebook also mentioned how, in the coming months, Instagram will also be adding a dedicated shopping tab to its main navigation bar, which will make it easier for the users to understand that they can also shop for products on the app besides simply liking, commenting and swiping.

Zuckerberg announcement was exciting enough to make heads turned. But his new initiative leads us to many questions that are imperative to answer and understand what Team Zuckerrbeg is really up to:

  • Why has Facebook suddenly taken such a huge leap forward into e-commerce?
  • What would be the impact of Facebook Shop on eCommerce behemoths like Amazon, eBay and Flipkart?
  • Is Facebook looking to explore new horizons beyond advertising?
  • Will sellers look beyond Amazon and eBay to set up their own shops on Facebook Shops?

While there is no doubt that Facebook Shops would make it very easy for billions of Instagram and Facebook users to discover and buy products right from the apps, one must not forget that the success of it will significantly boost Facebook’s revenue too.


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Amaan Khanna
Amaan Khannahttp://dazeinfo.com/
Marketing professional in making with a passion for acquiring knowledge in the tech and internet domain to further advance my understanding of the booming start-up culture in India.


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