On Tekedia Live tomorrow, 11-11.30am Lagos time, connecting via Week 15 of Tekedia Mini-MBA digital board, I will focus on the implications of Facebook Shop on the African ecommerce and fintech ecosystems. If all business profiles on Facebook and Instagram become stores, and Facebook already a “continent” of itself, I expect a major dislocation in the world of digital ecommerce.
Facebook is expanding into the world of e-commerce, announcing a new service that puts it in competition with Amazon and eBay. Facebook Shops will allow businesses to set up free “storefronts” on Facebook and Instagram…
Facebook is a website where most people spend a significant amount of their online time, and if they can buy most of the things they need therein, the value propositions for other ecommerce platforms will diminish.
As that happens, I see a disintermediation for the world of fintech. If Facebook can help me process that payment, why do I need a fintech to waste 1.99% since Facebook direct fees will naturally be lower? We will examine the implications and two articles I have in Harvard Business Review on this redesign.
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The biggest risk to Amazon, from Facebook Shop, is that the commission it takes on sales from vendors is the business. Commission on sales is not Facebook’s business and Facebook plans to waive that commission for businesses that sell on its platform. If you sell books on Amazon, you will pay Amazon say 10% as commission on gross. But on Facebook, that is your money to be kept. Facebook does not need the commissions as its core business is advertising but Amazon needs that money as that is the business of the merchant aggregator. Facebook Corp is a “continent” with an excess of 3 billion people, well ahead of Amazon’s forest. On logistics, provided you are not promising same day delivery, most economies with functioning postal services will serve these Facebook vendors.
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Well, it’s not always easy to pull those who live uptown to downtown, just with the lure of cheap rent, less spending on grocery and co; if it were to be so, Apple would be out of business by now.
If Facebook likes, it can shout from now till another decade, yet it will never gain the attention of some class of merchants and shoppers, it’s a perception game.
Again, there will be law of association in play: Amazon = ecommerce; Facebook = socialising. If you think to do major mind shift capable of making most big time online shoppers see Facebook not Amazon as shopping destination, then think again. What is in play goes beyond commission and logistics, but a way of life and perception!
Game on…
Good equations – “Amazon = ecommerce; Facebook = socialising”. Yes, someone has to give us social commerce
This is a wise comeback. Social-Ecommerce is inevitable
Yes indeed – social commerce
In the rapidly evolving world of business and tech, innovation and change have remained constant. Sometimes they happen overnight, other times it may take a while. Facebook may not gain the attention of some class of merchants and shoppers right away but they potentially can cause a significant enough disruption to the e-commerce ecosystem with the tools and resources at their disposal to at least deliver a clear statement of intent. I would say – never say never.
An interesting write up . An average consumer is interested in value and prompt delivery of services. Yes Amazon is currently dominating the logistics globally , however nothing is permanent .
There is huge savings to be made in a 10 % savings in transacting with Facebook vis avis Amazon.
I see a lot of economic sense in saving 10% of gross sale by a publisher who has been selling through Amazon.
Of course 10% of $1 billion is One hundred million Dollars. It’s enough to compensate for other pains.
In the current digitized world any thing is possible and the customers will remain the winners. We are watching!
We hope the best on composite value to win. The fact is simple: Amazon won physical stores by abstracting 8% sales tax which it was not required (originally) to collect, Facebook can waive its commission and do to Amazon what it did to physical stores. When it gets to 10%, big things happen. After all, people waited for 5 days to get their items from Amazon via US Post just to save the sales tax.