F-Commerce gaining momentum
Looking at the numbers, it’s obvious that Facebook is the promised land for e-retailers. With more than 845 million monthly active users by the end of 2011, its numbers are far away from the most well-known ecommerce sites like Amazon (164 million active accounts) or eBay (100 million active accounts). The main focus of Facebook is to connect friends, but as it has grown as a platform for any possible usage, by means of brand pages and applications, it has allowed the entrance of a group of interesting startups that want to revolution the ecommerce world by converting Facebook into a social ecommerce platform.
And there must be something interesting behind the concept of Facebook Commerce (or F-Commerce), when Venture Capital is starting to invest in those companies. In the last months, we’ve seen a lot of investment in Social Commerce companies (more than $300 million in 10 companies), such as:
- Beetailer, a spanish startup focused on helping retailers to import their storefronts to Facebook pages, received seed funding from Y Combinator.
- BeachMint, a series of suscription shopping model with personalized product recommendations, for several niches (Beauty, Jewel, Shoe and Style), has received a total of $73.5 million.
- Fab.com, a flash sales website really focused on Facebook commerce, has been able to raise more than $50 million since 2010, and has started its expansion to Europe by adquiring Casacanda, the 1st flash sales website in Germany and other north-europe countries.
- Wantful, a gift-giving service, that makes use of your Facebook profile to recommend gifts for your friends, has raised $5.5 million the last month.
- Buddy Media, a social enterprise software for social marketing, has raised $90 million since 2007 ($54 million in 2011).
All these movements make us think that Facebook Commerce is gaining momentum, but there are a lot of unresolved questions about using Facebook as a sales platform. First of all, Facebook hasn’t defined yet how’d they monetize the use of their platform as another e-commerce channel. In fact, when Facebook decided to monetize the use of Facebook as a videogame distribution platform, they created Facebook Credits and Facebook takes a 30% of the revenue generated by the sale of virtual goods using Facebook Credits. That’s a controversial model, and we are talking about virtual goods, which are near-zero cost, but Facebook need to develop a substantial different model for eCommerce, if they want to take part of the revenues generated within Facebook.
2012 is going to be a year full of movement within Social Commerce, and more specifically in Facebook Commerce, so it’s a good moment to take some risk and start using Facebook as an alternative ecommerce channel, or develop new Social Commerce models.
Facebook is already directly responsible for billions of dollars of 3rd party commerce transactions resulting in its social plugins and Open Graph API.
There are great examples for F-commerce campaigns like the launch of Heinz ‘Get Well’ Soup cans: 4 weeks, 2,127 sales – 1 sale per 8 fans – and a 200% (32,810) increase in Facebook ‘Likes’.
We at StoreYa (http://www.StoreYa.com), see an enormous traction, there’s an amazing daily growth of merchants, creating their own Facebook shops.
There’s no doubt that F-commerce is the next step in the eCommerce evolution!
Mia