Facebook e-commerce is becoming the new trend over social media, as more and more consumers are looking forward to have social shopping and also companies are jumping over this F-commerce market.
Some e-commerce start ups, backed by some tech financiers, are betting confidently that Facebook Inc can be the future of e-commerce overtaking Amazon.com Inc and eBay Inc.
Reports say the social networking giant is heading towards a $5 billion IPO, and is now under pressure from Wall Street to find some new source of profit apart from relying on advertisement, which has accounted revenue of 85% last year.
F-Commerce, which is a pet name for Facebook e-commerce, is considered to be the right answer for generating income. Startup companies like BeachMint, Yardseller, Oodle and Fab.com are coming up with new ideas that would persuade Facebook users not only to connect with friends, but to shop as well.
Last year SortPrice, shopping search engine and e-commerce leader, released some exciting statistics about the growth of F-Commerce. This stat was based on retailers that used company’s Store Application for Facebook Platform in 2010, which includes Addidas Soccer, Golfsmith and such other companies.
According to a study, apparel and home & garden are top industries which are making good money from F-Commerce.
“E-commerce is a huge category with very strong tailwinds and it’s a natural move for Facebook,” said Sam Schwerin of Millennium Technology Value Partners, which owns Facebook shares and has a stake in BeachMint.
He also said that Amazon Inc. revolutionised online shopping by crunching lots of customer and purchase data to come up with relevant personalised recommendations. In the same vein, Facebook’s combination of data analytics and payment technology could fuel the next generation of e-commerce.
David Fisch, former executive at eBay’s StubHub online ticket business, said: “People have always shopped with their friends, now they expect it online. Companies who think differently about social will find success,” wrote in his December blog.
Big brand, long way
With Facebook crossing 845 million users worldwide, there could not be any better place for online shopping. Earlier, big retail companies like J.C Penny, Gap and Nordstrom had opened their online stores on Facebook but later had to shut down due to low sales.
However, this hasn’t stop companies to still venture for F-Commerce and think that they have cracked the code.
Fab.com has attracted around 3 million users who broadcast purchases via “bought” button that advertises shopping habits to friends. The website generated lot of buzz among its users by offering $5 a month to those who agree to share their purchase and favoyrites on Facebook.
On the other hand, BeachMint co-founder Diego Berdakin said his company had set up a live video event naming StyleMint.tv last holiday season which featured Facebook CEO Mark Zuckerberg’s sister Randi Zuckerberg.
As this video hit the site more than 50,000 users watched and half the portion even bought the product, which according to Berdakin was the “biggest day in the history in terms of sales.”
Oodle, another start-up headed by Craig Donato who runs Facebook’s official marketplace, has boosted 3 million monthly users. “When buyers and sellers post items, their Facebook identities are attached giving users more confidence in the transactions, “said Donato.
F-Commerce for Small Sized Business
According to the recent report from Ecwid, an e-commerce software company, F-Commerce has helped in increasing revenue for small sized business.
The company is known for its store-building application for Facebook users and currently belongs to small and medium size business. The company also determined that 15% of total revenue came from Facebook stores.
As per the report, large-size retailers do not intend to invest more in F-commerce model, as many customers purchase from their official website stores. So this has helped small-sized businesses to tap their audience from Facebook.
On money making path
Presently, Facebook is generating money by selling ads to merchants that target potential customers. But experts believe it is just a matter of time as later the social network will ask for a commission on shopping transactions.
Facebook’s relationship with Zynga Inc, an online games developer is the best example, as networking site takes 30% of revenue that is generated from the sales of good that is used for playing games.
Christian Taylor, Chief Executive of Payvment said: “Facebook has a huge opportunity to monetise e-commerce. They have the infrastructure and team to pursue that.”
Payvment is yet another startup that operated thousands of Facebook stores. If F-Commerce takes off then world’s biggest social network will find new ways to make enough money from it.
Sources: Reuters, thenextweb, socialtimes