Author(s): Raghu Gopal
Since October 2016, Facebook has strengthened its focus on e-commerce by announcing several new initiatives that provide strong indications of longer-term ambitions. At the beginning of October, Facebook announced Facebook Marketplace, a service similar to Craigslist for buying and selling merchandise. The social network also introduced deeper PayPal integration with Facebook Messenger, which is being rolled out in the US and is expected to be introduced in other countries in 2017.
Facebook has also launched a series of e-commerce services including food delivery, appointment bookings and ticket purchasing. The company is enabling its users to make direct transactions with businesses. It has the potential to become the world's largest mall.
These features are available through various partnerships including with delivery.com and Slice, which will handle the logistics. Facebook is now competing with companies such as GrubHub, Postmates and Seamless.
Facebook now also supports the booking of appointments with small businesses and reservations with restaurants, salons and spas. Facebook users will be able to purchase tickets to upcoming films and events hosted by small businesses via Ticketmaster, Eventbrite or Fandango extensions.
Facebook pages are receiving e-commerce enhancements to facilitate such new features, and the company has said it will not charge for these capabilities. Third-party financial transactions can now be completed within Facebook, meaning consumers don't have to leave the site to order food, buy movie tickets or book dinner reservations. These developments will make it easier and faster for local businesses to make meaningful connections with users, but there's a risk that a great walled garden is being created.
There's some external inspiration here. The success of commerce initiatives on messaging platforms like WeChat in China and Line in Japan has fuelled Facebook's social e-commerce ambitions. Social networking services are driving more retail traffic than any other online channel. Facebook, with its fantastically huge user total, is certain to be a dominant social e-commerce platform. Many of the new features put the social network in direct competition with popular alternatives, which will have to brace themselves for this rivalry.