CollinsFacebook Inc introduced Tuesday Facebook Shops, that is intended to make it easy for small businesses to sell their products online, starting in the U.S. this summer. The social media company said to create a Facebook Shop is free, and makes it simple to set up a single online store for customers to access both Facebook and Instagram.
And customers can message a business through Facebook Messenger, WhatsApp, or Instagram Direct to get support and track deliveries. The stock rose up to 3.2% in afternoon trading, putting it on track for a 4-month high. It has now gained 7.3% year to date, while the S&P 500 SPX, -1.04% has lost 8.3%.
Facebook announced on Tuesday that it is launching Shops, a service that will allow businesses to display and sell products on its platforms.
Mark Zuckerberg, Facebook’s CEO, is positioning Shops as a tool for small businesses, many of which have had to close their doors and move online due to the COVID-19 pandemic.
Facebook Shopping App
Facebook currently allows sales on its platform through Marketplace, which was launched in 2016 and allows users to sell personal belongings to each other, much like Craigslist. Shops will be aimed primarily at businesses, allowing them to sell products to customers on the app and potentially posing a challenge to commerce rivals such as Etsy and Amazon, which have profited from the increased online sales that have come with Covid-19 lockdowns.
The move to build up e-commerce offerings follows Facebook’s launch last year of limited shopping options on the photo-sharing app Instagram and the messaging app WhatsApp. Facebook also announced that its digital currency project Libra launched in 2019, could be used for in-app purchases.
Facebook Shops will also tie at least some of those efforts together, enabling businesses to set up a single online store accessible via both Facebook and Instagram. A checkout feature will enable in-app purchases.
“Our goal is to make shopping seamless and empower anyone from a small business owner to a global brand to use our apps to connect with customers,” Zuckerberg said in a video announcing the new product.
As with Facebook’s other e-commerce features, Shops will be free for businesses to access, with the expectation that the tool will boost consumer engagement and ofcourse ad sales.
“Our business model here is ads,” Zuckerberg said. “So rather than charge businesses for Shops, we know that Shops are valuable for businesses. They’re going to in general bid more for ads and we’ll eventually make money that way.”
Facebook is also rolling out a tool to connect loyalty programs and a shopping feature showing product tags underneath live videos, allowing viewers to make purchases directly while watching.
Facebook Shops will be available in some locations starting on Tuesday and roll out globally over the coming months.
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