Chennai: Social media giant Facebook, which kick-started the public messaging platform revolution has announced that it will be betting big on its shopping and payment services to drive growth in the future.
In a call with investors, CEO Mark Zuckerberg laid out the company’s plans to drive growth in the future and said while advertising will continue to be its leading revenue driver, this will be boosted by its plans for e-commerce and payment.
He said this in response to analysts’ questions on whether the firm which also owns Instagram and WhatsApp, would look to its shopping and payment features as major revenue generators. ‘It’s really a continuous spectrum and they’re not two different things,’ Zuckerberg said.
Reports state that Facebook will build more commerce-related features on Instagram, Facebook, and Facebook Marketplace, including tools that allow people to buy products directly through these platforms.
As more users make in-app purchases, brands and businesses are likely to purchase more ads. These apps will also become more valuable to these businesses, which gives Facebook better leverage to charge higher advertising fees, reports said.
It must be noted that recently, a new checkout button was introduced in Instagram, which allows customers to easily buy products in its feed without leaving the app. Analysts have estimated that the new feature could draw in $10 billion in revenue in 2021 alone.
In the call, Zuckerberg also announced his plans to expand ways in which customers can pay businesses which will involve paying companies directly through Facebook’s upcoming, giant messaging platform.
“I think what we’re going to end up seeing is building out payments…The goal would be to have something where you can do discovery through the broader town square-like platforms in Instagram and Facebook. And then you can complete the transactions and follow up with businesses individually and have an ongoing relationship through Messenger and WhatsApp,” he said.
“Everything there (on messenger platforms) is very intimate and private. So it feels like a more natural space to be interacting with a business in a private way for doing transactionsm,” he said, adding that Facebook plans to keep fees on payments low or free. “But this could change long-term,” Zuckerberg added.
The California-based company has seen its profit drop by more than half, to $2.43 billion, in the first quarter. It posted $15.08 billion in revenue, up 26 per cent from $11.97 billion in the year-agor period.
|Zuckerberg said he has been asked if the use of private social platforms such as WhatsApp will replace the more public platforms such as Facebook and Instagram.
“As private platforms have grown, in some cases we’ve seen some cannibalisation of the more public platforms in countries like India, where WhatsApp is very popular,” Zuckerberg said. “I believe building out this private social platform is a much greater opportunity than it is a risk,” he added.
“Over time there’s an even bigger opportunity with the digital living room to build a platform focused on privacy. I think we should focus our efforts on building this privacy-focused platform,” he told analysts.
According to reports, WhatsApp remains unprofitable five years after it was acquired by Facebook for $19 billion.
|On data localisationOn data localisation|
|Zuckerberg also reiterated his stand against data localisation. “You should expect that we won’t store sensitive data in countries where it might be improperly accessed because of weak rule of law or governments that can forcibly get access to your data. Our stance on data localisation is a risk. That is, if we get blocked in a major country, that will hurt our community and our business,” he said without mentioning India.|