Home > News content

Facebook's e-commerce ambitions and business opportunities

via:博客园     time:2019/3/21 16:34:25     readed:233

This article comes from the WeChat public account & quot; stated the sea & rdquo; (ID: Chen_thoughts), the author stated the sea

According to foreign media reports, starting today, American consumers can directly purchase more than 20 different brands on Instagram, including Zara, H&M, Outdoor voice and Uniqlo. At present, this service has not been opened to the public. Only a few brands accept the invitation to test. Users can purchase products in the app by clicking the product label on the post. Previously, the shoppable posts service provided by Instagram, after clicking the product label, will guide users to visit external websites.


Instagram shopping example

This is the latest e-commerce attempt by the global social media giant, but it is definitely not the first time. Today we will talk about the social empire Facebook company's many attempts in the e-commerce field, and future business opportunities. In this way, we can analyze the identity and perspective of China's cross-border e-commerce partners, and get a share of Facebook's e-commerce ambitions.

Facebook's past and present

Although it has become one of the duo in the digital advertising field, Facebook has only been established for 15 years.


Facebook According to the latest financial report, Facebook's advertising revenue in 2018 reached 55 billion US dollars, an increase of 38% over 2017. Among them, Q4's net income reached US$6.88 billion, an increase of 61%, and revenue reached US$16.9 billion, an increase of 30%. This eye-catching transcript seems to have briefly diluted the scandal of 2018 and the data leaks around Facebook all year round.

Although it has become one of the duo in the digital advertising field, Facebook has only been established for 15 years.

On February 4, 2004, Zuckerberg launched a book called “The Facebook” in Harvard's dorm room, which was born in Harvard University and evolved from a self-entertaining private website to the world's largest social networking site. . From teenagers to seniors, almost half of the world's Internet users are using Facebook to socialize.


Facebook's app family, with more than 1 billion active users per app

Similar to many of today's Internet unicorns, there was no profit plan when Facebook was launched. Until 2007, Facebook began to offer free classified ads. At the end of 2009, Facebook managed to make its advertising model profitable. In 2012, Facebook acquired Instagram for $1 billion. At the end of the same year, Facebook achieved more than one billion active users for the first time. The latest financial report shows that Facebook's monthly active users have reached 232 million.

Information flow advertising promotes e-commerce growth

According to a study by The Wall Street Journal and Pivotal, Facebook earned $5 billion to $7 billion from Chinese advertisers in 2018, accounting for about 10% of Facebook's 2018 revenue.

Like Google, another big Internet giant, Facebook’s main revenue comes from its advertising business. Mainly information flow advertising. That is, in the friend information browsed by the user, some sponsored content is appropriately interspersed.

Since its launch in 2009, this service has been favored by advertisers. According to Facebook COO Sheryl Sandberg, the company's Facebook, Instagram, WhatsApp and Messenger serve a total of 7 million advertisers. Among the 7 million advertisers, there are also a small number of advertisers from China. According to a report by the Wall Street Journal and a research report by Pivotal, it is estimated that Facebook has earned about $5 billion from Chinese advertisers. This figure accounts for about 10% of Facebook's 2018 revenue.

Having a large amount of user data is a core resource for Facebook advertising. Advertisers match the right ads by using a large amount of data about users in the Facebook product ecosystem. Facebook's huge user data allows advertisers to accurately target ads to their target audience, enabling thousands of ads to be created. The information flow advertisement, in a form very similar to the original content, minimizes the interruption to the user. For example, its Facebook Dynamic Advertising product enables advertisers to upload their entire product catalog and make targeted recommendations based on customer interests, habits, and product visit records for the site.


Facebook's stream ad form

The ads on the Facebook platform are mainly of the following categories:


2. Mobile app

3. E-commerce website

4. Brand advertising

According to the author's experience in managing Facebook's top agents in China in 2015-2017, Facebook's share of e-commerce ads is about 25-30%. The super-selling of China's export e-commerce independent stations, including Global Easy Buy, Stick Valley, Shein, etc. are also the main advertisers of Facebook in China. Global e-commerce companies are expected to bring more than 100 – $15 billion in advertising revenue per year to Facebook.

Challenge from Amazon

The latest data shows that Amazon's digital advertising business grew much faster than expected, becoming the third largest market share company and becoming a potential rival to Google and Facebook.


Although the transcript is very eye-catching, the threat from the outside has never been interrupted. For social media competitors, Facebook usually relies on its acquisition to resolve it. For example, in 2010, Facebook acquired Instagram for $1 billion, which turned the latter into a super social application for more than 1 billion active users.

In 2014, it spent $1.9 billion to bring the instant messaging application Whatsapp to the world. Today, the number of users worldwide is over one billion. However, in recent years, a threat has directly targeted one of Facebook's most profitable core businesses —— advertising business from e-commerce. This challenge comes from another Internet business giant ——Amazon.

In the past two years, Amazon has also launched paid advertising products for e-commerce sellers, helping e-commerce advertisers recommend products to nearly 300 million Amazon users. Currently, Amazon has three forms of advertising: Sponsored Products, Headline Search Ads, and Product Display Ads.


The latest data shows that Amazon's digital advertising business grew much faster than expected, becoming the third largest market share company and becoming a potential rival to Google and Facebook. According to a recent eMarketer report, Amazon's advertising revenue is expected to increase to $15 billion by 2020, or 10% or more of the US digital advertising market share.


Amazon's AMS digital ad growth

While Google and Facebook are still much larger in the digital advertising space, the tech giant has a bigger advantage over Google and Facebook in e-commerce advertising: it has a huge amount of user buying data and knows exactly what shoppers need. And you can complete the closed loop of sales through your own e-commerce platform. And Facebook only knows "what you want your friends to think about what you like".

Just as Amazon continues to erode the share of Facebook e-commerce advertising, in fact, Facebook has long been eyeing the big cake of e-commerce transactions.

E-commerce efforts and attempts

Facebook has never stopped trying to get users to accept the concept of “shopping on social networks”. Since 2007, in the field of e-commerce, Zuckerberg's Facebook team has been defeated and defeated. The latest attempt, from Instagram.


As early as 2007, Facebook tried to reduce its excessive reliance on advertising revenue and began selling products directly through major websites. For Facebook, analysts and industry experts who were still social network rookies at the time, the term “Fcommerce” was used to describe I believe that e-commerce is a new way for Facebook.

Try the project: Marketplace

Start time: 2007-2014

Current status: restart after stopping

As early as 2007, Facebook launched an application called Marketplace with the business platform Oodle. Through this application, Facebook users can easily create, share, and respond to categories such as “Furniture”. Similar to “free fish”, but transactions are often generated between acquaintances.

Ideally, according to Oodle CEO and founder Craig Donato: “It's more important to find good homes for items we no longer use than to sell them at a higher price. ” But at the time, Marketplace did not show satisfactory results. In 2009, Control of the Marketplace was transferred to Oodle in full, and in 2014, the application was closed.

Try the project: Facebook Shop Page/ Facebook Store

Start time: 2009 to present

Current status: To be activated

In 2009, Facebook tried to provide store entrances in the brand homepage as a new attempt for e-commerce.


By 2011, many big brands have set up online stores on Facebook, such as GameStop, Gap, J.C. Penney, Nordstrom and more.

From the perspective of the seller's expectations, the Facebook platform makes it very easy for sellers to target users with specific interests. This makes sharing and even viral marketing easier on the Facebook platform. Therefore, we expect Facebook shop to help their business grow quickly. However, the ideal is full and the reality is very skinny.

Because the Facebook shop page only has the simple function of displaying goods, there is no natural traffic support, and there is no rich e-commerce management function like other e-commerce platforms. Third, it does not support transactions. This e-commerce attempt ended in failure.

For Facebook's embarrassing career in e-commerce, some people joked: "Facebook is like a private party, but there are brands that let you pay for this buy, of course, no one is willing to take care of it; also preliminary verification, Facebook community ecology, E-commerce is not as simple as adding. ”

Try the project: Facebook Gifts

Start time: 2012-2014

Current status: stop service

In September 2012, Facebook launched the Facebook Gifts project test in the United States. This project is based on the gift application Karma. Karma is a very popular online store on the Facebook site. With Karma, users can buy chocolate, teddy bears, wine, gift cards and more for their friends. The specific steps for using Facebook Gifts are as follows: First, Facebook will automatically post a wrapped gift to the system wall of the buyer's friend. When a friend opens, they will see the purchaser's personal information. At the same time, the system will also ask them to provide a shipping address.

To promote the Facebook Gifts app, Facebook cuts the user's purchase price and completes the sale through its own warehouse.


However, this app was announced to close in August 2014. The official statement states that we will use everything we learned from Gifts to explore new ways to help businesses and developers drive sales on Facebook.

Fourth attempt: Facebook buy and sell group

Start time: 2015

Current status: in service

Facebook buy and sell group This was launched in 2015. To this day, many users still use this app to buy and sell second-hand goods.

The use of Facebook buy and sell group is very similar to any other group. Users can comment on posts of interest at any time, or send messages to other users in the group.

Specifically, users can find nearby buying and selling groups by clicking the “Buy and Sell Groups” link in the left menu of Facebook. The user thus enters the home page of the sales group. Some local trading groups that may be of interest to the user are displayed on the home page. Each group has a join button next to it, click to enter the group of interest.


Facebook buy and Sell group

Fifth attempt: Relaunch Facebook Marketplace

Start time: 2016 to date

Current status: in service

At the end of 2016, Facebook once again entered the field of e-commerce. On October 3, 2016, the world's largest social networking site announced the relaunch of the Marketplace app to help users trade merchandise on Facebook's mobile app. However, Facebook only offers trading platforms and does not support payment and logistics services.

The Marketplace service is actually an extension of the previous Facebook buy and sell groups service. Previously, users could post sales information by buying and selling groups. The Marketplace automatically displays items for sale in nearby areas based on the user's location. At the same time, users can also find specific products by location, category, price and other options through the App's search bar.

If the user wants to post the item for sale, they need to upload a photo of the item, set the item name, description, price, and confirm the location and selection category. Buyers can send messages to any seller to discuss specific transaction details.


According to the Facebook Marketplace homepage, more than 800 million people trade here every month. Users can buy and sell goods anytime, anywhere without paying a platform usage fee. On the Marketplace platform, buyers and sellers achieve seamless trading, and customers and goods are also connected. With visual merchandising, Marketplace is attracting more and more customers to browse and shop.


In fact, Marketplace can be said to be a test of Facebook's real start of e-commerce business.

According to FACEBOOK, in the half year or so of the product's landing, 18 million items on the Marketplace were put on the website by post, and the market coverage of the market was also accelerating, from the initial British, American, Australian, Canadian, New Zealand, Chile, and Mexico have increased their 17 countries in Europe by August 2017, and now in more than 70 countries, the monthly users have reached 800 million.

Unlike many e-commerce platforms, Marketplace is at best a product information display platform, and Facebook does not support payment and logistics services. Therefore, some media believe that this has increased the risk of trading in the Marketplace to some extent.

Try the illustrations from Facebook's e-commerce above, and you'll find that Facebook never stops trying to get users to accept the concept of “shopping on social networks”. From 2007 to the present, in the field of e-commerce, Zuckerberg's Facebook team has been defeated repeatedly, but has been defeated. The latest attempt, from Instagram.

Facebook's e-commerce attempts may be successful

Beijing time March 20, 2019, today, this feature has begun to support some brands of on-site payment. This is a milestone for Facebook's multiple e-commerce attempts.


A recent attempt by Facebook e-commerce, in addition to restarting the Marketplace, another big move is to launch a shopping feature on Instagram “shoppable posts”, which was launched in the US in 2016 and is only available to Instagram business users. Subsequently, the shopping function was launched in the UK, Australia, Brazil, Canada, France, Germany, Italy and Spain. Last year, the function was extended to Hong Kong, Taiwan and Southeast Asia.


Instagram“shoppable posts” is designed to allow brands to tag items in published posts, creating a “seamless experience” from post to purchase.

Shoppable posts allows brands and merchants to tag up to 5 items in a post that consumers can click to get more information and buy.

Instagram's e-commerce can be described as a matter of course. Users on the platform have long been accustomed to advertising: the posts posted on brand accounts are advertisements, and many posts published by NetRed are also advertisements.

Currently, 80% of Instagram's 800 million users are following the “active shopping business” account. About 200 million users browse one or more business account pages every day, which allows them to shop naturally on Instagram. With new apps, Instagram makes it easier for merchants to reach customers than ever before. New features associate a merchant's product catalog with their account. As such, tagging a product is as simple as tagging a user in a post.



Instagram's Shoppable Posts app is an important step in making Instagram a more business-friendly platform.

When I prepared this article, Instagram shoppable was not able to make purchase payment functions. Beijing time March 20, 2019, today, this feature has begun to support some brands of on-site payment. This has a history of the meaning of Facebook's multiple e-commerce attempts.

What can China's cross-border e-commerce do?

The possibility of Facebook opening the mall is undoubtedly a very exciting good news for Chinese sellers who are accustomed to chasing the e-commerce platform dividend. However, things may not be as easy as our e-commerce platforms such as Amazon, Ebay, and Wish.

Although the functionality of the on-site store is still in the stage of some brand invitation testing, it is only applicable to 22 brands including high-end brands (Prada, Balmain, Oscar de la Renta) and fast fashion (H&M, Zara).

However, sellers interested in the Facebook Marketplace and having commercial entities in these countries can first enter the Marketplace and try to use the Shoppable post feature.

The author estimates that unlike Amazon, Ebay and other mature e-commerce platforms, as a new entrant, especially for Facebook that has experienced many unsuccessful attempts, it may be cautious in promoting e-commerce. The attitude is gradually advanced. It’s probably a long time since Facebook’s fully open brand and merchants have settled in.

Even so, I believe that the possibility of Facebook opening the mall is undoubtedly a very exciting good news for Chinese sellers who are accustomed to chasing the e-commerce platform dividend. However, things may not be as easy as our e-commerce platforms such as Amazon, Ebay, and Wish.

Facebook's current e-commerce trials are based primarily on the Instagram platform with beautiful graphics, fashion and design. The style, characteristics, and user activity of Ins itself are fundamental to Facebook. Therefore, Facebook should be very cautious in the opening of the target market, the screening of products and brands. Although Facebook does not have a lot of experience in e-commerce platform operation, based on the very mature experience and a large amount of data in e-commerce advertising, the screening of the market, products and brands may fully refer to the existing data, choice and platform style. , user preferences and other closest products and brands.

For many Chinese sellers who sell ordinary goods without brand recognition at a low price, it may be that Facebook will finally consider it. In particular, a small number of Chinese e-commerce merchants did not leave a good impression on the Facebook platform when they advertised. To a certain extent, it will also increase the difficulty of obtaining trust in Chinese products.

Therefore, for sellers who are interested in entering Facebook & Instagram, the world's largest social e-commerce platform, you can prepare as follows in advance.

1. Pay attention to the improvement of product quality, and truly work hard in products and supply chains to export high-quality products to the world.

2. Focus on brand building: including product design, packaging, image and user experience.

3. Focus on the operation and communication of Facebook and Instagram social media, and accumulate positive influence on social media.

In addition, although in the short term, Chinese sellers do not have the opportunity to directly enter the Facebook e-commerce platform. But Facebook and Instagram, the social media platform, still have a lot of bonuses to mine.

First, Facebook and Instagram, which have mature ad systems, are still one of the best channels for e-commerce new customer traffic. In addition, for example, brand cooperation with red people on the platform, and full consideration of consumer video consumption habits, began to focus on the output of video content, establish brand social media accounts and continue to conduct high-quality content marketing, etc. It is a social dividend that Chinese sellers can currently grasp.

In general, social e-commerce is indeed a big trend. And Facebook's latest e-commerce attempt is undoubtedly a huge boost to the development of social e-commerce. In my opinion, the fundamentals of social e-commerce are not only the channels of communication, but more importantly, the trust from users and the endorsement of brands. This is also the scarcity of Chinese export products and brands. Look forward to more Chinese sellers and brands to be able to do a good job, manage a good brand, serve customers well, let overseas consumers truly trust in China, and actively endorse Chinese brands. I believe this is the best posture to grasp the global social e-commerce business opportunities!

China IT News APP

Download China IT News APP

Please rate this news

The average score will be displayed after you score.

Post comment

Do not see clearly? Click for a new code.

User comments