Facebook with 2.6 Billion Members Enters Online Shopping... Will It Become a Rival to Amazon?

Online Shopping 'Facebook Shops' Launched

CEO Zuckerberg: "Considering Entry into Food Delivery Market in the Future"

[Asia Economy Reporter Kwon Jaehee] Facebook, the world's largest social networking service (SNS) platform, has announced its entry into the e-commerce market. It expressed its ambition to provide a 'one-stop service' for shopping, payment, and delivery tracking all within a single application (app). The company is also considering offering delivery services in the future. With an enormous user base of 2.6 billion worldwide, Facebook's market entry is drawing attention as it may cause significant shifts in the online retail market dominated by established players like Amazon and eBay.

According to local media such as CNBC on the 19th (local time), Facebook launched the 'Facebook Shops' service, allowing online shopping through its platforms Facebook and Instagram starting that day. Products can be introduced and easily registered through features like Facebook Pages, Instagram profiles, and Stories. Additionally, customers and sellers can inquire about and sell products via chat functions on these SNS platforms, including WhatsApp, Messenger, and Instagram Direct.

Mark Zuckerberg, Facebook's Chief Executive Officer (CEO), explained, "Seeing the explosive increase in online shopping demand due to the novel coronavirus disease (COVID-19), we accelerated plans to promote Facebook Shops. Based on our data, we will also improve personalized advertising, which will help increase advertising revenue."

CEO Zuckerberg added, "Our business model is 'advertising.' We know that if shops find value in their business, they will want to advertise more, and ultimately, this is how we will generate revenue."

Going further, Facebook revealed its intention to enter food ordering services similar to 'Uber Eats.' It also mentioned plans to provide transportation and logistics services. CEO Zuckerberg stated, "In the long term, it would be great if restaurants could also utilize Facebook Shops services and have delivery services in place."

Facebook plans to initially launch Facebook Shops in North America and Europe and then expand the service regions in the future.

Facebook's entry into the e-commerce market is interpreted as part of efforts to strengthen its dominance in the online market. Facebook has experienced several incidents involving personal information leaks, and the leaked information has been exploited to expose posts showing political bias. Because of this, many have assessed that the company suffered a critical blow as an information technology (IT) firm.

There is a prevailing view that Facebook's new business entry will cause significant waves in the market. Given that strong security is essential in e-commerce, Facebook can dispel the security issues that have been controversial so far and simultaneously retain its 2.6 billion global customers. There are also expectations that the virtual currency Libra, scheduled to launch within the year, could be utilized.

Rich Greenfield, a researcher at consulting firm LightShed Partners, said, "Users do not have to go through the hassle of opening another window to access Amazon or eBay websites and make payments while using Facebook. The 'one-stop service' provided by Facebook Shops will be that powerful."

Deborah Williamson, a researcher at global market analysis firm eMarketer, analyzed, "Facebook appears to have a long-term ambition to imitate a 'super app' like WeChat (China's representative SNS), where users can send messages, purchase products, and even transfer money all within the single platform called Facebook."

This content was produced with the assistance of AI translation services.