On May 19 Mark Zuckerberg, CEO, announced the launch of Facebook Shops, an online store on Facebook and Instagram. Given the size of its user base, its global footprint, and its host of apps, it's not surprising that sooner or later Facebook would realize that they have a huge, untapped opportunity to drive revenue. This isn't Facebook's first foray into e-commerce. In 2016, it introduced Marketplace, a destination within the app for peer-to-peer buying and selling. Two years later, Instagram began working on a standalone shopping app, though it was later abandoned. Instead, last year, Instagram added in-app checkout. The recent surge in online shopping due to the shut down of physical stores created the perfect storm for introducing the new e-commerce platform. <ul> <li>Businesses can set up free shopfronts on the Facebook Shops platform.</li> <li>Facebook Shops will be powered by third-party services, including Shopify, BigCommerce, and Woo, in an effort to turn the social network into a top-tier shopping destination.</li> <li>Shops will be available on Facebook's business pages and on Instagram.</li> <li>There are currently more than 160 million small businesses using the company’s apps.</li> <li>The company reported 1.7 billion daily active users (DAU) in March, up 11% year-on-year.</li> <li>Monthly active users (MAU) for the month ended March 31, 2020 reached 2.6 billion.</li> </ul> <h3><strong>Where Facebook Makes Money</strong></h3> <ul> <li>Facebook makes about 98% of its revenue from advertising on its platform. </li> <li>For the quarter ended March 31, 2020, advertising revenue was $17.4 billion, up 17% year-on-year. </li> <li>Operating expenses for quarter ended March 31 were $11.8 billion. </li> <li>Net income for the quarter was $4.9 billion.</li> </ul> <img src="https://insidefashionlive.net/wp-content/uploads/2020/05/Facebook-shops-laptop.png" alt="Facebook Shops laptop" srcset="https://insidefashionlive.net/wp-content/uploads/2020/05/Facebook-shops-laptop.png 629w, https://insidefashionlive.net/wp-content/uploads/2020/05/Facebook-shops-laptop-300x169.png 300w" sizes="(max-width: 629px) 100vw, 629px" width="629" height="354"> <h3><strong>Key Advantage of Facebook Shops</strong></h3> One of the next big <a href="https://insidefashionlive.net/suddenly-everyone-is-looking-to-cross-border-sales/">growth opportunities is cross-border trade</a>. Aliexpress has been developing an international platform for Alibaba giving both sellers and buyers even in less developed nations a platform. Amazon has added more sites outside of its main U.S. platform. However, as a social network, Facebook already has an extensive global reach. This could prove to be an incredibly valuable strategic advantage - one that competitors will find difficult to replicate. <h3><strong>Services</strong></h3> <ul> <li>Businesses can handle customer support issues through Messenger, Instagram, and WhatsApp.</li> <li>The company plans to let users browse store catalogs and make purchases directly from the chat window.</li> <li>Facebook Shops also plans to enable shopping from live streams, allowing brands and creators to tag items from their Facebook catalogs so that they appear on the bottom of live videos.</li> <li>Facebook is working to integrate loyalty programs with shops. Sellers can create loyalty programs and buyers can track points on their Facebook accounts.</li> </ul> <img src="https://insidefashionlive.net/wp-content/uploads/2020/05/Facebook-Shops-mobile.png" alt="Facebook Shop mobile" srcset="https://insidefashionlive.net/wp-content/uploads/2020/05/Facebook-Shops-mobile.png 629w, https://insidefashionlive.net/wp-content/uploads/2020/05/Facebook-Shops-mobile-300x169.png 300w" sizes="(max-width: 629px) 100vw, 629px" width="629" height="354"> <h3><strong>E-commerce Top Competitors</strong></h3> <strong><a href="http://www.amazon.com" target="_blank" rel="noopener noreferrer">Amazon.</a></strong> The platform has gone from strength to strength and leveraged its massive customer base that brings revenue and scale. Amazon has so many businesses under its umbrella and it doesn't breakout e-commerce. However, it's no secret that its e-commerce revenue is huge. Traffic to Amazon was 6.9 billion visits in 2019 <a href="https://www.tmall.com/" target="_blank" rel="noopener noreferrer"><strong>Tmall.</strong></a> China's rapidly growing consumer market has provided the fuel for Tmall. Like Amazon, its parent company Alibaba has used its huge customer base to launch a wide range of services including creative financial services. Increasingly foreign brands are opening shops on Tmall to sell into the China market. The Alibaba group had revenue of $56.1 billion in 2019, up 43.6% from 2018 . Traffic to its sites reached 17 billion in 2019. <strong><a style="color: #000000; text-decoration: underline;" href="http://www.etsy.com" target="_blank" rel="noopener noreferrer">Etsy</a>.</strong> Who would have thought that crafts could be a such a big business? In 2019 Etsy, which sells mainly crafts and vintage items reported revenue of US$4.7 billion. This was a nearly a 26% gain over the $3.93 billion reported in 2018. The site has 2.6 million active sellers. <a href="http://www.ebay.com" target="_blank" rel="noopener noreferrer"><strong>eBay.</strong></a> The orginal re-sale site, eBay now sells mainly new products from sellers who use the platform much like they would Amazon. eBay's revenue reached $10.83 billion in fiscal year 2019. Traffic to the platform reached 2.57 billion visitors. It has 174 million active Marketplace buyers worldwide. Revenue for Q1 2020 was $2.6 billion. International eBay Inc saw revenue increase 65% in Q1. <strong><a href="https://www.rakuten.com" target="_blank" rel="noopener noreferrer">Rakuten.</a></strong> Japan's version of Amazon and Tmall is called Rakuten. Revenue reached around $11.7 billion in 2019, with traffic to the site at 417.6 million visitors. <a href="http://www.flipkart.com" target="_blank" rel="noopener noreferrer"><strong>Flipkart.</strong></a> India's Flipkart of one of several fast growing e-commerce platforms. It sells mainly to its domestic market - however that market is comprised of 1.3 billion people. Revenue in 2019 was estimated at $6 billion, up 42% year-on-year. The Flipkart app is said to have about 50,000,000 downloads.