Much of Facebook’s latest earnings call followed the expected script. Earnings and revenue performance came in strong, across properties (Facebook, Instagram and WhatsApp); the social media giant claims 3.45 billion users, or slightly less than half the planet’s total population; and it makes an astonishing amount of revenue selling ads.
But one detail dropped by CEO Mark Zuckerberg for the first time during his call with investors has been turning heads. Facebook Marketplace, launched with little fanfare in 2016, has gotten massive and is becoming a springboard for Facebook’s larger commerce ambitions.
“We built Marketplace into one of the world’s leading services for people to buy and sell, and I am pleased to share today that more than 1 billion people visit Marketplace each month,” Zuckerberg told investors during the earnings call. “And now, we’re investing in building for the future of commerce. We launched Shops last year. And as I recently shared, there are now more than 1 million monthly active Shops and over 250 million monthly Shop’s visitors.”
And judging by COO Sheryl Sandberg’s remarks, Facebook’s commerce efforts are still very nascent. The company has launched a lot of shopping tools, and has broad business adoption, she said, which are both encouraging signs — but Facebook still has a lot of work to do, both in developing its suite of commerce tools for merchants and in developing a superior consumer experience.
She told investors that Facebook has made a good start with more and more people looking for and finding products on the site, but now must build the funnel from the crowded top down. It’s going to take work and time to bring people along, she said, though Facebook is “very optimistic about our opportunity here.”
Facebook is far from the only player in the social media space is committing to doing that work of late. Though social commerce efforts have historically struggled in the U.S. market, the combined punch of the pandemic and recent super-app push among big tech players has reignited interest in expanding social commerce offering from a lot of big players.
In the last year, Snap’s social commerce ambitions have been increasingly on display, albeit quietly. It moved to acquire Screenshot, the so-called “Shazam of fashion,” is allowing musicians to license their music on Snap, and has pursued tie-ins with the NBA as it has expanded its social commerce ambitions of the last year and sought to derive revenue from streams wider than online advertising alone.
“As the shift to online shopping continues to accelerate, we believe there is a massive untapped opportunity for AR-driven product innovation in eCommerce, and that our young audience will continue to be early adopters of these new technologies and shopping experiences,” Snap CEO Evan Spiegel told investors. “One of the key verticals we are tailoring our solutions for is apparel and accessories, which is the largest shopping category by far among U.S. teenagers. We believe that helping buyers find the right size, fit and styles will reduce friction in their online shopping experience, which in turn will improve revenue and margins for our business partners.”
And in fact souped-up offerings from social media players have been rolling out since 2021 kicked off, with both Pinterest and Twitter capturing headlines in the early spring for their advancing social commerce offerings.
Pinterest has paired up with Shopify, which has drastically increased the goods inventory on its site. The firm has also been looking to upgrade its technology to better support shopping journeys, developing things like augmented reality (AR) and image recognition to make it easier for users to search the site for goods. The AR tech is enabling users to do things like virtually try on things like cosmetics before a purchase is made.
Twitter meanwhile purchased Revue, a newsletter platform that allows users to create, customize and distribute newsletters to a proprietary list of email subscribers and get paid for their efforts. Revue also offers Twitter a chance to diversify its revenue streams, according to a report in The Wall Street Journal, with the social platform recently speculating about the possibility of “identifying subscription opportunities.”
The social commerce bandwagon, powered by dream of building super apps in the U.S. something like the powerhouses defining the market in Asia, is apparently alive well and on the rise in the U.S., pushed by platforms increasingly turning their massive user bases into powerful commerce engines.
And with a billion users pursuing the marketplace, it’s fair to say Facebook as made a good start — though it is notable that it has publicized how many visitors are showing up, not whether they are buying, how much they are spending on how often they are repeating the experience. Facebook’s commerce ambitions are as good as its ability to get consumers to do more than come and hang out in Facebook’s stores but to actually transact in them.
But there are far worse starting points than a billion sets of eyeballs eying the goods every month — and Facebook’s ambitions are clearly much bigger than that.