Can Facebook Shape Itself into an E-Commerce Contender?
By Pete Hernandez III
The tech-heavy NASDAQ continues to play the role of the outlier in a stock market that has ridden highs and lows amid the health crisis. Even with the easing of restrictions across the country, the new normal of remote work and sheltering at home has left many leaning on technology more than ever.
Whether it be staying connecting with loved ones, consuming entertainment, or purchasing goods and services, the tech industry has been there to capitalize. And now one of the big four is looking to lend a hand in all three of the above.
Facebook, which closed at a high of $234.91 following Friday’s trading session, gave investors another reason to cheer with the unveiling of ‘Facebook Shops’, a new tool meant for merchants to list their products on Facebook and Instagram in a seamless manner.
With this move, the tech giant isn’t just coming after consumers, it’s going after e-commerce contenders like Amazon and Google.
Merchants can register on Shops to sell products through Facebook and Instagram directly, as well as via Stories and through advertisements on both platforms. Handling all inventory, orders and delivery will be done through third-party partners like Shopify and Woo.
With consumers being even more glued to their desktops and mobile devices, the unveiling of Shops makes sense for Facebook’s audience. If their eyes are on their social media timelines more than ever, why not leverage the same platform to search for products.
But what does the social networking giant hope to accomplish in the long-term? It wants not only to be an active player in our current e-commerce driven lifestyle but to remain there for a long time.
In a Facebook live session, CEO Mark Zuckerberg expressed that this unveiling was the company’s way of helping businesses impacted by COVID-19, though he acknowledged that it would not “undo all the economic damage.”
In regards to Shops’ place in a post-pandemic world, he said: “I do think we’re going to continue living more of our lives online and doing more business online.”
The key aspect to watch going forward is whether Facebook can convince its audience to accept Shops’ as their number one option for purchasing products, as opposed to the likes of an Amazon. If Facebook’s message that it’s aiming to help small businesses in need translates well, perhaps that could sway the minds of its audience, and especially those who are socially-conscious consumers.
The impact of COVID-19 has launched an e-commerce battle between heavyweights like Amazons, who has seen an exponential boom in orders, versus small businesses who are still trying to cash in on the opportunity.
If Shops’ can be perceived as a means of helping the little guy in this David versus Goliath scenario, it could portray Facebook in a better light, while dishing some competition to Amazon.
Though social networking is at its core, Facebook has made it clear it wants to extend into different industries, from cryptocurrency to matchmaking to now, e-commerce. Time remains to be seen whether the company can become a prime player.
