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.