Market Overview

Facebook Expands E-commerce Features Across Platforms, Shops To Debut On Main App

Facebook Expands E-commerce Features Across Platforms, Shops To Debut On Main App

Facebook Inc. (NASDAQ: FB) announced Tuesday it's adding a shop feature to its main social media app as well as expanding live shopping on Instagram Direct and other messaging platforms, to help people "find products from familiar businesses."

What Happened: Facebook Shop will be added to the Mark Zuckerberg-led company's main app as a pilot in the United States, the company said in a statement.

The California-based company also announced a slew of new e-commerce features for businesses that run Facebook Shops, like new design layouts for products, the ability to see a real-time preview of collections as they are designed, the ability to automatically create new shops for new sellers, and new insights feature.

Facebook said that eligible sellers in the U.S. would be able to start using checkout on Instagram, as long as they have Shops, and use the company’s Commerce manager or its partners Shopify Inc (NYSE: SHOP) and BigCommerce Holding Inc’s (NASDAQ: BIGC) services.

The social media giant is also adding a messaging button on Shops that will make it easier for customers to connect to businesses via Messenger, WhatsApp, or Instagram Direct.

A feature called Live Shopping is now available to all businesses in the U.S. on Instagram, which the company has already been testing on Facebook. This feature will allow sellers to use video to make sales, the company said.

Why It Matters: Facebook Shops is a free service that can be used by businesses to sell products on Facebook Page, Instagram Profile, Stories or in ads.

The social media behemoth had announced the launch of Shops in May, which, according to BofA analyst Justin Post could help improve its user monetization rate across both Facebook and Instagram. Morgan Stanley analyst Brian Nowak placed monetization of Instagram to be worth $4 billion of year incremental ad revenue, beginning 2021. 

Price Action: Facebook shares closed nearly 3.5% higher at $280.82 on Tuesday and gained almost 0.5% in the after-hours session. 

Photo courtesy: Facebook Inc.


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