For some time now, the big social networks have known that social commerce could be a major revenue generator, as well as an important way to diversify their revenue streams outside of the traditional world of digital advertising. In Asia, networks like WeChat and Line have made huge revenues from facilitating commerce on their platforms. But many social media users, particularly in Europe and North America, remain either unaware or ambivalent about the potential benefits of social commerce, which has hampered attempts to roll out true social commerce options on Facebook, Twitter or Pinterest.
The launch (or re-launch, depending on your point of view) of Facebook Marketplace in the US, UK, Australia and New Zealand last week marked another effort by the world’s biggest social network to expand into some of the biggest e-commerce markets. And it’s easy to see why Facebook is committed to making social commerce work. If we take the US as an example, GlobalWebIndex’s research shows that over 30% of adult Facebookers in this country turn to social media when they are researching products online. And with 8 in 10 US Facebookers purchasing products online each month, there’s clearly a huge opportunity to bring some of these purchases inside social networks.
However, only 6% of adult Facebookers say being able to purchase directly via social media would encourage them to buy online. And even among the Facebookers who are most enthusiastic about online commerce - the 25-34s - only 13% see the appeal of social commerce. These figures amply illustrate the challenge that faces Facebook, and other networks, in its mission to popularise true social commerce options among digital consumers. While many people are comfortable integrating social media into their purchase journey, when it comes to final shopping, most will turn to traditional online retail sites.
Within this context, Facebook Marketplace could bridge the gap between research and purchase on social media. Although the platform does not yet support a native transaction system, it could be an important step in educating Facebookers about the benefits of social commerce. Although it may take some time before we see the flourishing social commerce platforms of Asia replicated in Europe and North America, we could look back at Marketplace as a big step in this evolution.