Facebook is moving further into the fast-growing e-commerce space with the launch of Facebook Shops across its Facebook and Instagram platforms, as well as additional integration for products like WhatsApp and Messenger intended to improve communication between businesses and customers.
“This is the biggest step we’ve taken yet to enable commerce across our family of apps,” said CEO Mark Zuckerberg in a video post announcing the new capabilities on Tuesday. Zuckerberg, who said he has been personally working with Facebook’s engineers to accelerate its efforts in the space, said that Shops will be “uniquely valuable” to small business owners.
The launch of Facebook Shops comes as small businesses around the world face an uncertain future created by the coronavirus and the resulting economic shutdown. According to the Canadian website SmallBusinessInCrisis.ca, which tracks threatened small businesses across the country, 581 business owners say they are likely to close by June 30, 642 say they are “very likely” and 107 say they have permanently closed.
At the same time, e-commerce could be a possible lifeline for many of these businesses, with the recent Salesforce Q1 Shopping Index noting 20% growth in online revenues, 16% growth in digital traffic and 4% growth in shopper spend versus the comparable quarter last year.
Facebook Shops, which includes a partnership with Canadian e-commerce giant Shopify on back-end functionality including product inventory, orders and fulfillment, will enable small businesses (and global brands) to use the social media company’s massive global footprint to expand their reach. Shopify has been a Facebook partner on its e-commerce solutions since 2015.
“Shopify powers more than one million businesses that are transforming the direct-to-consumer landscape and changing the way we shop,” said Shopify CEO Tobi Lütke in a release. “With Facebook Shops, we’re bringing the tech industry together to help entrepreneurs succeed at a critical time. By pairing Shopify’s platform and commerce capabilities with Facebook’s reach and scale, we are reducing the barriers to entrepreneurship and advancing the future of commerce.”
Facebook is promising small business owners free and easy set-up for their online storefront, while providing consumers with the ability to ask questions, get support and track deliveries via WhatsApp, Messenger or Instagram Direct.
“We want to give people a place to experience the joy of shopping versus the chore of buying,” said the social media giant in a blog post announcing the product launch. “And we want to help small businesses adapt and make it easier for people to discover and shop for things they love.”
During Tuesday’s announcement, Zuckerberg acknowledged the uphill battle faced by small businesses during the current health pandemic. “This isn’t going to make up for all the lost business, but it can help,” he said.
Facebook Shops is free for businesses to use, with Facebook saying it plans to monetize the program through advertising. Small businesses account for the “vast majority” of Facebook’s ad revenue, said Zuckerberg, noting that an estimated 160 million small businesses around the world use some of its services.
“Our business model here is ads,” said Zuckerberg. “We know that if Shops are valuable for businesses, they’re going to want to pay more for ads and we’ll eventually make money that way.”
In addition to Shopify, Facebook listed BigCommerce, WooCommerce, ChannelAdvisor, CedCommerce, Cafe24, Tienda Nube and Feedonomics as the other e-commerce companies it is working with on Facebook Shops.