Facebook Is Going Into E-Commerce


Facebook Inc. announced on Monday that it is testing different ad formats so that more than one billion of its users can buy items from businesses. Users will be able to shop for clothes and other products from their mobile phones without ever leaving its app. This move is seen as Facebook’s further foray into e-commerce to compete with Amazon Inc’s (AMZN.O) retail offerings.

The company’s mobile advertising revenue now stands at 76% of its total ad revenue, which is $2.9 billion. They are hoping to combine advertising and commerce to potentially boost these numbers even further. Almost half of users on Facebook look for clothes, electronics, and other items to buy in their news feed. It gives us a unique opportunity, the company said.

However very few users buy on mobile phones as the process is slow and cumbersome. Facebook hopes to smoothen up this process and make more ad dollars. Mobile purchases make up less than 2% of all retain sales at this time, according to research firm eMarketer. Emma Rodgers, Facebook’s head of product marketing for commerce said, “We’re looking to give people an easier way to find products that will be interesting to them on mobile, make shopping easier and help businesses drive sales”.

Among the new features are advertisements that will take a user through a specific brand’s products without redirecting them to another site. In this new format, users will click to visit a Facebook page where many of the retailer’s products will be displayed. Only after a user wants to purchase an item does he or she have to click through to the retailer’s own website.

Last year, Facebook introduced its carousel ad format, where advertisers could use several product images and links in a single advertisement.

Facebook will also create a central hub on its network for users to shop for products. Under the “Favorites” section, where users can access the News Feed or Events sections, they will see a new section – “Shopping”.