E-Commerce Move from Facebook Facebook Shops

Facebook recently announced its e-commerce move, Facebook Shops. The company, which enables small businesses to manage the stores they will open on Facebook Shops, just like they manage their Instagram or Facebook page content, guarantees to provide businesses with a very efficient e-commerce infrastructure.

At this point, businesses will be able to communicate with customers through any channel, even via WhatsApp, Messenger or Instagram messages on Facebook. Thus, it will be able to compete with platforms such as Facebook, Amazon, eBay and Etsy. Facebook, which has moved itself beyond a social networking platform with Instagram's shopping features and Marketplace, will also multiply its revenues with Shops.

According to research by Deutsche Bank analysts, Facebook Shops is expected to bring an extra $30 billion in annual revenue to Facebook, including advertising fees and commissions.

While Facebook generated 70.7 billion dollars in revenue in 2019 and 17.7 billion dollars in the first quarter of 2020, it is expected to increase its annual revenue by 50 percent with Shops.

This situation; It means Facebook, a $654 billion company, will grow even further and further increase its dominance in the market. When Instagram's payment feature was launched in April 2019, the same analysts announced that shopping features on Instagram would bring the company up to $10 billion in revenue by 2021. The fact that Facebook appeals to a larger audience strengthens the estimate that the revenue will increase to 30 billion dollars.

In the note sent by Deutsche Bank to its customers, it was underlined that Facebook Shop is expected to generate $30 billion in revenue, including commissions and advertising revenues based on turnover. The note emphasized that Facebook Shops will expand Instagram Checkout's tagging and buying and selling processes, providing businesses with a more branded experience on a broader platform.

The note also emphasized that with the increase in commercial activity, higher advertising pricing will also emerge, saying, “There are 140 million businesses providing services on Facebook, but there are only 8 million advertisers. Allowing catalog uploads; It means more businesses become advertisers. “In the longer term, the rates will increase even more when the number of audiences addressed increases, provides more advertising volume and improves the e-commerce set.”

This feature, which Facebook launched during the pandemic period, was aimed to help businesses more. The aim of Facebook Shops can be explained as increasing the sales of businesses, but it can also be thought of as gaining new advertisers in the long term.