Social media giant Facebook is getting into the online e-commerce game by launching its new Shops service. The service, which was launched on Tuesday, will allow businesses to display products they are selling on Facebook and get access to the platform's 2.6 billion monthly active users.
The decision to launch the new service comes as thousands of small businesses are shifting to selling their products online. The months of shelter-in-place orders and lockdowns have forced most businesses to close down their stores and the internet has become their only viable medium to reach customers.
Facebook CEO Mark Zuckerberg is positioning the platform's Shops feature as a separate service to Marketplace. The company originally launched the Marketplace service in 2016, allowing users to sell their personal items to other users. Marketplace eventually attracted businesses to also sell on the platform, which negated the original purpose of the service.
Shops is intended to separate the two types of items, with the Shops platform being built primarily for businesses. The launch of the service could potentially make Facebook a serious threat to already established e-commerce companies, including platforms run by Etsy and Amazon.
The new Shops feature will allow businesses to set up their own online store on Facebook, which can also be accessed by users on Instagram. The store will be equipped with a number of useful business-oriented features, including a checkout service that will let users pay through various payment methods.
Zuckerberg mentioned in a video announcing the new service that the company's goal is to enable seamless shopping on its platform. He added that the Shops service should allow business owners to grow their brand and to more easily connect with their customers.
Similar to most of the features on Facebook, Shops will be completely free to use. The company is hoping that the additional service will significantly increase consumer engagement and further boost its already substantial user base. With more users, the company can generate much more ad sales.
Zuckerberg explained that Facebook's business model has always been about ads. The company did not want to charge anything for the new service as changing its already proven business model did not make sense. Instead, by allowing businesses to thrive on its platform, Facebook can attract more users to bid for ads for their products.
The addition of the new service comes just months after Facebook had experimented with offering limited shopping options on its other platforms, namely on its messaging app WhatsApp and its photo-sharing platform Instagram. Facebook originally intended to integrate its blockchain-based cryptocurrency Libra into the services. However, the project has since recently regulatory scrutiny, delaying its implementation.
