(Editor’s note: Scot Wingo, founder and chief executive officer of global e-commerce services provider ChannelAdvisor, blogs frequently about e-commerce trends.)
MORRISVILLE, N.C. - On September 28th 2012, Facebook launched Facebook Gifts (which we’ll call FBG for this post). In this post, we wanted to take a deep dive into this development because we believe it has some interesting ramifications for both the worlds of e-commerce and social commerce. This post covers these topics:
- Marketplaces will eat the e-commerce world
- FBG – A new category of marketplace is born: curated social gifts
- FBG – will it work? 872m reasons why…
Marketplaces Will Eat the e-commerce World
One trend we watch closely at ChannelAdvisor is the emergence of new marketplaces, because we believe that (tip of the hat to Marc Andreessen), marketplaces will eat the e-commerce world (a topic for another day, and another blog post).
Here’s a quick overview of some of the categories of existing marketplaces:
- Old school – eBay is the grand-daddy of marketplaces – started as an auction site and is still chugging today.
- Retailer-based marketplaces – Amazon started the trend and now we have Wal-mart, Sears, NewEgg, Buy.com, Tesco and Marks and Spencer.
- B2B marketplaces – These are marketplaces that are used for selling in industrial verticals (like construction equipment @ IronPlanet), or liquidation plays like liquidation.com.
- CSE marketplaces – Many of the top CSEs are being re-imagined with marketplace capabilities (where you check out on the CSE vs. the retailer) including Shop.com, NextTag and PriceGrabber.
- International marketplaces – You have the Asian-based mega-powers (Rakuten and Alibaba), Mercado Libre in Brazil, a plethora of players throughout Europe and TradeMe in New Zealand.
- Mobile marketplaces – The top mobile apps are converting into marketplaces such as ShopSavvy and Redlaser – where you can buy right from the phone. Amazon and eBay both live in this bucket as well as the ‘old school’ and ‘retailer-based’ categories.
- Niche marketplaces – These are interesting long-tail niches where pockets of consumers are looking for a certain products from a variety of vendors. We put Etsy in here as almost a network of marketplaces. You also have some interesting niches like OneStopPlus which is focused on plus-sized apparel.
- Deal marketplaces (curated) – Groupon Goods started this new type of marketplace that is an ‘inch wide and a mile deep’ and now LivingSocial and others have launched with their take on a deal-focused marketplace.
- Social marketplaces – Copious, Fancy and (hopefully soon) Pinterest live at the intersection of social and marketplaces.
The launch of Facebook Gifts has created a new category of marketplaces we believe warrants some monitoring by retailers.
Facebook Gifts – A New Category of Marketplaces Is Born: Curated Social Gifts
Facebook has all the right ingredients needed to grow a healthy marketplace:
- 950m active users
- Mobile
- Lots of data on those users (Like when their birthdays, anniversaries, etc. are)
- The social graph which causes new features to spread like wild fire.
- With those two foundations in place, I believe Facebook Gifts are very interesting for the worlds of both e-commerce and social because it is the birth of a new type of marketplace: Curated Social Gifts Marketplace.
Shortly after it’s IPO, Facebook acquired a mobile gift startup called Karma for a reported $80m – Karma was an iOS app that did some basic gifting. Facebook has taken the basic premise of Karma and really re-imagined it as a native FB feature.
The launch offering has about 100 merchants including Starbucks and 1-800-flowers.
Facebook Gifts – will it work? (Read Scot’s full blog.)