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How good is Facebook as a platform for selling goods online?

Facebook has over 1.71 billion users with 31 million just in the UK. It’s the most popular social network worldwide. In the UK, the average user spends 1 hour 40 mins browsing their social media while Facebook Messenger is used by 11% of the entire population of the planet.

With equally boggling numbers, ecommerce (online trade) just in the UK is worth over £573 billion and is spread across all trading channels (C2C, B2C, B2B and eProcurement). It’s where over 20% of all trade now takes place. UK retail ecommerce is growing at around 17% for Q3.

Given that both Facebook and ecommerce sit centre stage on the Internet one would expect that the intersection between the two would be massive and with equally jaw dropping statistics. Almost surprisingly, it’s not.

In 2009 Facebook opened it’s first Facebook store. By any measure, the approach has been a flop. Facebook Gifts came and then went in 2014. Buy buttons on Facebook feeds have not generated significant traction while attempt number four is to add “buy now” capabilities built directly into the Messenger App. Early signs are not looking good. In its annual report, Facebook has said “a relatively small percentage of users have transacted …. Facebook has an uphill battle to get millions of consumers to trust them with their credit cards”. This problem may get even worse following this month’s launch of Facebook Marketplace where, it’s (possibly unfairly) claimed, unregulated trade could lead to widespread scams or the sale of illegal items.

At INDEZ we look after a large portfolio of ecommerce businesses who use us to build, maintain and market their ecommerce websites. This means that we have privileged access to the statistics of almost 40 businesses. These businesses all use a wide range of mechanisms to market and promote their products and across all the sites, the cumulative contribution of last-touch social channels (facebook + twitter + Google+ + YouTube + Pinterest etc) to product purchase is only around 5%.

To help understand the apparent disconnect between social media and ecommerce you have to go back to human psychology. Brands are based on propositions. When you think of Ferrari you think of red sports cars, When you think of eBay you think of secondhand consumer-to-consumer sales. When you think of JCB you think of big yellow diggers and Tesco is where you buy food. All of these brands will try to sell you very much more (JCB boots, Tesco Insurance, a Ferrari wristwatch and eBay products are over 82% new B2C items) but these ‘extra’ sales are invariably beyond the buying public’s first thought when they wish to buy something. The point here is when you think “Facebook” you think “socialise”, “friends”, “chatter”, “share” or “social status”. If you wanted to buy a chainsaw, Facebook would not be the obvious place to start the journey.

While the established social media brands have struggled to make electronic trade part of their proposition, their frustration has been amplified by the apparent success of their Chinese counterparts. For example, WeChat (think Facebook Messenger for the Chinese market) transacted over $46 Billion in just one month. I went to an event on Marketplaces a couple of weeks back where somebody explained how, in China, their partner had wanted to buy some packs of Brewdog beer. The first thing that popped into her thinking was to point her WeChat phone app camera at their last can. The app recognised the product, took the order, paid for it and the delivery arrived at the door a few hours later. So, is the reason for WeChat ecommerce success down to technology or is it down to proposition and branding? The truth is probably a bit of both. It’s also probably because in China they don’t have easy access to the ecommerce Juggernaut Google that dominates ecommerce everywhere else on the planet.