Two things: Facebook unveiled Facebook Shop, and Google partnered with Ecobank to “offer timely and relevant solutions, including Google My Business and Google Ad products” to the bank’s customers.Both solutions from the ICT utilities go back to my warning call in a Harvard Business Review article where I examined the future of African tech in a world dominated by Google and Facebook.The Google product will abstract what many African tech firms offer for largely free and Facebook Shop will become a mortal threat to many ecommerce companies.By the time Facebook adds Libra and an evolved payment system, turning Facebook, Messenger and Instagram into a global market platform, African fintechs may struggle.Practically, if you can buy from a Facebook Shop and pay therein, you will not see any incentive of clicking out or launching another app.Starting today, you’ll be able to browse and buy products directly from a business’ Facebook Page or Instagram profile.
Both Facebook and Instagram already supported a degree of e-commerce — for example, Facebook has its Marketplace and will likely make a bigger push through its Libra cryptocurrency initiative, while Instagram allows users to buy products featured in posts and ads.
But the company’s new tools go further, enabling businesses to create a full-fledged Facebook Shop.
Yet, this can also be good for small companies especially those with solid digital game plans.
Simply, all you need is to have a Facebook Shop or Instagram Shop, and by doing that Facebook helps you run a digital platform.Yes, there is no need to hire a web developer and maintain a website since you can sell right on Facebook.This service will knock out many tech services and make some fintech solutions irrelevant especially not selected as integration partners.
People may even send you to Facebook to process their payments form their websites.
Those businesses will be able to create a Facebook Shop for free — they just upload their catalog, choose the products they want to feature, then customize it with a cover image and accent colors.Visitors can then browse, save and order products.
Facebook’s vice president of ads Dan Levy said that while the company will charge “small fees” on each purchase, the real monetization will come from driving more advertising.(Shops can also be featured in ads and stories.)
Yet, there is nothing new here.Facebook has since become the #1 ecommerce operator in Africa.
In January 2018, I wrote on what was to come: “This has been expected.I have predicted that by 2022, the ecommerce platforms we may have are really Facebook, Instagram and WhatsApp in Africa.I expect these ICT utilities to add store features in their platforms to make it easier for people to list and sell things.That also means that people can get paid easily”.According to Mark Zuckerberg, Facebook CEO, Covid-19 pandemic accelerated the evolution of this product in a video stream to Facebook users.
According to Geopoll, a polling company, Facebook group is growing massively, threatening companies like Jumia and Konga on ecommerce.The informal groups in Facebook are now ecosystems of digital commerce as users use them to shop without going to the traditional ecommerce companies.
..Yet, this goes beyond Facebook; Instagram would be the best show room most businesses would have in Africa.
That is already happening in the continent as photographers, designers, and artists are abandoning traditional websites to focus on their Instagram engagements.As ICT utilities like Instagram put store features, in their platforms, many things would happen: they will disrupt the traditional nexus of ecommerce.What To Expect
The dominance of Facebook group as an ecommerce ecosystem, especially for marketplaces, would be driven by the following as noted in that Jan 2018 piec e:
Free Internet: When you shop on Facebook, under the Internet Free Basics, you do not waste mobile credit.
This means that more people will increasingly adopt it.It puts the traditional ecommerce players on clear disadvantage.
Trust : Facebook deals with the issue of trust in African ecommerce.Both the buyer and seller have clear linkages with others as the accounts do not just appear.So, it makes the bonding better.
You would see a seller account with 2000 likes and that boosts your confidence level that the seller is genuine.Traditional ecommerce companies do not enjoy that since accounts are not socially associated in their platforms.
Commission: We expect Facebook commission to be lower compared with traditional ecommerce.The implication is that more people will flock to Facebook group.The Facebook group has an element of entrepreneurial freedom since the sellers can “build” the stores themselves.
Network effect: While a company like Konga is hosting about sub-500k active users in its platforms, Facebook has largely everyone that is online in Nigeria.That is a huge advantage.That can move sellers to operate accounts there.
Facebook Groups To Become Africa’s #1 Ecommerce Platform -.
