Will Facebook ‘Shops’ give smaller stores a new dimension?

Although Facebook Shops is not available in India yet, industry players say when introduced it will give a boost to the domestic e-commerce market

e4m by Dipali Banka
Updated: May 29, 2020 8:51 AM
Facebook Shops

Facebook Founder Mark Zuckerberg announced the launch of Facebook ‘Shops’ last week, a platform that small mom-and-pop stores across the world could leverage to sell things directly across its apps, WhatsApp, Instagram and Facebook. This move is being pegged as a major push by Facebook in the e-commerce market.

Facebook plans to begin a phased roll out of Shops to all businesses globally on Facebook and Instagram Shopping over the next few months. Facebook India has, however, confirmed that Facebook Shops is not available in India right now. Also, there is no definitive word when each region or business will be able to access Shops. Facebook will let Page managers know, over time, as it brings them on board.

Sandeep Pandey

“With the launch of Shops, Facebook is creating a native e-commerce experience for the user,” explains Sandeep Pandey, President - Product & Strategy at Wavemaker India. “Customers would not have to click an ad and lead to a brand website that might load slow or just be a broken link. The native experience will add to customer trust and directly impact conversions. Consumers will be able to browse a product on Facebook and checkout via Instagram seamlessly. Future integrations will also include shopping via Facebook Messenger and WhatsApp Chat screens. Business owners will be able to leverage Messenger and WhatsApp as a CRM tool. It will definitely alter and grow the e-commerce influence for the better. The channel will no more be looked at as a “good to have” one. Finally, businesses will be forced to re-evaluate their channel strategies, now that customers too have been primed and ready to transact,” Pandey explained.

Hareesh Tibrewal

“After Google, the Facebook universe comprising of Facebook, Instagram and WhatsApp has access to the largest digital population on the planet. Hence allowing a small business owner access to this market could be a game changer for all the three parties in this new ecosystem: the store owner, the consumer and Facebook. For Facebook, this is clearly a monetisation opportunity. The store owner gets access to a large consumer base. And the customer gets a buying opportunity without having to leave his social network, where in any case he is spending a lot of his time,” says Hareesh Tibrewal, Joint CEO, Mirum India.

In order to best facilitate the new on-platform shopping experience, Facebook will also make it easy for customers to message businesses from their shop listings, via WhatsApp, Messenger or Instagram Direct. And in the future, customers will also be able to view a business’ shop, and make purchases from within a messenger stream. With the launch of FB Shops, businesses, especially SMEs/boutique brands, will be able to get ready for e-commerce faster and with much lesser resources.

G D Prasad

“Facebook Shops could potentially become a marketplace for small businesses, perhaps even giving tough competition to the likes of IndiaMart. India’s largely unorganised sector could become organised with Facebook’s initiatives. The smaller players that are accessing the internet through Jio or 4G mostly, operating a nimble enterprise (making masks, t-shirts, packaging material, food/snacks) will be willing to exploit any channel that makes sense to them, with minimum investments,” says G D Prasad, AVP, Client Services & Leader- Corporate Strategy, Dentsu Webchutney.

Sharing further insights, Prasad said: “Merely by listing on FB, they become discoverable in an instant and they will reach out to a much larger audience (one that’s outside their core geography). Also, if Facebook manages to train and support them with advertising (even a Rs 2,000 welcome credit like Google does), they will see a definite jump in revenue. For consumers (other small businesses or end users), the purchase experience could be seamless without having to exit to another website or app and if the feature rolls out to Insta, Messenger and Whatsapp (like Facebook claims it will), consumers could end up browsing on one app and completing the transaction on another seamlessly. It’s unsure now as to how Facebook will make money off this – perhaps they will go the Shopify route and take commissions on every sale, but this will definitely put the small business owner in control of his enterprise.” 

Vishal Chinchankar

Talking in the context of the present economic conditions, Vishal Chinchankar, Chief Digital Officer, Madison, said: “With the economic fallout, many small businesses are struggling, and with stores closing, more are looking to bring their business online, clearly hyperlocal e-tail looks promising for small business.” 

How will this alter the e-commerce scenario in India, when launched? “Firstly, I am not sure if India is on the immediate cards, but whenever they launch social commerce it will definitely give a boost to the e-commerce industry in India. Having said that Amazon and Flipkart have already been onboarding local kirana shops. This should only lead to a rise in the Indian e-commerce market,” says Chinchankar.

With Facebook’s investment in Jio Platforms last month, for Rs 43,574 crore, the social media giant will be hoping to use its newfound presence in the local market to fuel more business activity via WhatsApp and Facebook, which will incorporate a broader expansion of Indian eCommerce platforms like Meesho that Facebook acquired last year.

“While all eyes are presently on the JioMart-Facebook (WhatsApp) move, which involves ordering groceries and essential products from your nearest kirana shop, I’d like to call this as SKU shopping, which is clearly the hyperlocal e-tail. I would tend to believe that the business models will be different. If you hear Mark Zukerberg carefully, he clearly says that their business model is advertising, to promote partner shops. While it’s a wait till they announce their India strategy, I feel this partnership may not overlap but should bring in synergies to complement each other,” adds Chinchankar.

With regards to the present players of the Indian e-commerce market, Tibrewal says: “So far, the e-commerce battle in India was being fought between Amazon and Flipkart. Now, we will see one more strong entrant in this space comprising of the troika of FB-Jio-Kirana store. Jio has time and again emphasised that its platform will be a great digital enabler for kirana stores. Also the COVID-19 and lockdown situation that we have all faced in the recent months has revived our faith in the local kirana store. Thus, we should be seeing the battle for e-commerce supremacy becoming a 3-cornered one now.” 

It is still early days for FB Shops and its impact in India as it has not been rolled out officially. But these developments and investments will only help the industry grow and develop a more scalable and sustainable ecosystem for both businesses and consumers.

Throwing in some other interesting aspects, Prasad further said, “Honestly, this is a bit of a grey area as we aren’t sure of the specifics of the deal. Now, if this means that JIO will get access to Facebook’s data and vice-versa, we are talking about both these companies taking things to another level on every front – entertainment, e-commerce, education, you name it. Reliance’s footprint will increase manifold and so will Facebook and its products. This could potentially open up India 3.0 and 4.0 and bring them all onto the digital ecosystem. And more people is always better for any business. We may also see a rise in “Made for India” features that could benefit both Jio and Facebook in the long run.”   

Pandey believes the launch of FB shops should not impact the FB-Jio deal in any way since the business models are not connected. "The FB-Jio deal is more about how Jio Mart will be leveraging WhatsApp as a platform to help consumers connect and transact with Kirana stores across the country. While the FB Shops platform helps business across all categories get online and not just kiranas or a particular category, I think still early days for FB Shops and its impact in India, not rolled out officially. Though I think all these developments and investments by large players like FB will only help grow industry and develop a more scalable and sustainable ecosystem for both businesses and consumers.” 

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