Covid-19 has brought huge growth for ecommerce, but Facebook plays are the ones to watch in 2021.
News of Amazon’s massive Q3 sales growth – 37% year-on-year – solidified its reputation as the unbeatable ecommerce business model.
However, Facebook is building diverse social marketplaces monetized solely through advertising revenue, which could draw serious traffic from Amazon in the future.
Facebook’s ecommerce platforms — Marketplace, relaunched in 2016, and Shops, launched mid-lockdown in 2020 — are unconventional but effective alternatives for sellers frustrated by Amazon’s aggressive tactics.
Whilst not profiting from commissions or their own products, unlike traditional ecommerce platforms, Facebook’s directly facilitate browsing and selection of products through ‘social’ business accounts and automated ads.
The fact that Facebook promotes this commerce to benefit indirectly through selling usage data, user attention and advertising space unfairly counts them out of most considerations of the ecommerce market.
In 2018, according to a Facebook press release, Marketplace saw 800 million monthly active users (MAU) across 70 countries.
Marketplace might slip under the radar of most ecommerce market share estimates, but in terms of convertible traffic which Amazon and others will lose as it grows, it constitutes a genuine threat.
Ads-based ecommerce is the future
Facebook monetizes its Marketplace platform by enabling sellers to ‘Boost’ their classified product ads, prioritizing them in listings.
Meanwhile, Facebook Shops, which is still only available in the US, offers free storefronts to independent businesses with optional advertising extras.
These extras include A-B testing for Facebook marketing campaigns from as little as $500 per campaign, offering cutting-edge advertising to businesses on any scale.
Over time, the growing audience for Facebook’s ecommerce platforms will attract more comprehensive product ranges, taking it beyond one-off classifieds into direct competition with Amazon.
All this could happen without Facebook ever needing to worry about selling its own products, the way that Amazon has aggressively transitioned from online marketplace to retailer.
Facebook Shops is more than just a timely PR move
Shops was introduced ostensibly as a social enterprise, empowering small, independent businesses to reach their customers online during the pandemic.
Businesses can establish dedicated ecommerce pages on Shops to integrate with other social media, using Facebook’s market-leading advertising tools to plan campaigns with the same sophistication as bigger sellers.
Supporting local enterprise has brought Facebook some good PR, which it has been unable to get enough of since its record-breaking fine over the Cambridge Analytica scandal in 2018.
However, it is also a statement about the company which Facebook wants to become, as it rebrands with news ways to use its business as a force for good.