What You Need To Know About Instagram's Redesign

Instagram's app remodel places more emphasis on its TikTok clone Reels and its growing e-commerce business, CNBC's Julia Boorstin reported on "Squawk Alley."

What Happened: The Facebook, Inc. (NASDAQ: FB)-owned social media property added new shortcuts on its main page for Reels and shopping.

Instagram not only takes "a cut of transactions" on sales, but it represents a new advertising venue for brands, platform head Adam Mosseri told CNBC in a statement. 

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"Showing ads in a shopping space is going to be theoretically more valuable because you're showing ads in a space where people have a higher intent to actually purchase or buy," the statement said.

Over time, Reels short videos will feature ads, although it is in a "catch up" phase right now, the exec told CNBC.

E-commerce has been identified as a new opportunity for Facebook, and investors celebrated previous announcements. The social media platform's launch of Shops in May helped send the stock to new all-time highs.

Why It's Important: Facebook's emphasis on e-commerce shopping with its platforms represents an opportunity for small-and-medium-size businesses to diversify their selling exposure, said "Squawk Alley" co-anchor Jon Fortt. 

Instead of a small business selling almost exclusively through its own website or Amazon, it can now sell across the core Facebook platform and Instagram.

Photo courtesy of Instagram.