Facebook is adding Shops to let businesses sell products through the social network
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Facebook is adding Shops to its social network and Instagram in its biggest move into e-commerce yet.
The Silicon Valley-headquartered social-networking firm announced on Tuesday it was adding shop fronts for businesses to list their wares, along with a host of other e-commerce functionality across its apps. The new features move Facebook further than ever from its roots as a purely advertising-focused business — and also take it more squarely into competition with far more established online shopping platforms like Amazon, eBay, and Etsy.
In an interview with Business Insider, Dan Levy, Facebook's vice president of ads and business platform, said the company had sped up its work on its shopping tool to help support businesses that might make use of it and are under immense strain because of the pandemic and associated economic crisis.
"We knew this was the future of where we were going, supporting online commerce," he said. "Now it's just happening a lot faster."
Facebook Shops allow businesses to create digital storefronts on the social network, where they can host "catalogs" of their products, and will either link out to places to buy the products or allow users to purchase them directly on Facebook.
It will live inside both Facebook and Instagram, and there are plans to add it to the messaging apps WhatsApp and Messenger. Instagram is also creating a dedicated shopping destination where users can find products to buy — and in a sign of the emphasis the company is now placing on e-commerce, Instagram Shop will be made a permanent button on users' navigation bars on the app home screen later this year.
Facebook is also letting brands and creators who use its livestreaming tools tag products in their videos, allowing for the possibility QVC-style shopping channels on Facebook and Instagram and letting influencers plug their sponsors when they go live.
The company is also exploring ways for users to link loyalty programs they have with businesses to their Facebook profiles.
In recent years, Facebook has been throwing more and more weight behind the potential of e-commerce as an area of growth for the business, with previous efforts including a checkout feature and ways for brands to tag products in posts on Instagram. In mid-2019, Deutsche Bank analysts estimated e-commerce on Instagram alone would net $10 billion in revenue a year for the company by 2021.
With lockdowns forcing hundreds of millions of people to stay home, adding deeper shopping functionality to Facebook gives it an opportunity to benefit from the vast increase in online shopping suddenly occurring.
"We're seeing a lot of small businesses that never had online presences get online for the first time," CEO Mark Zuckerberg said in a livestream announcing Facebook Shops on Tuesday. "For a lot of small businesses in this period, this is the difference between staying afloat and going under."
Similarly, e-commerce may help to diversify Facebook's extremely advertising-revenue-reliant business model. The coronavirus has caused economic devastation around the globe, and that has translated to plummeting ad spend by advertisers. Facebook has fared far better than some media businesses — its revenues in early April were roughly flat compared with the same period in 2019, rather than declining — but e-commerce offers more stability in case of future crises, as well as opportunities for growth.
Facebook has launched a flurry of new features and initiatives in response to the coronavirus, seizing the crisis as an opportunity for redemption after years of scandals and crises. It has added group chatrooms called Rooms to let isolated users video chat with one another and promoted reliable information about the pandemic through a new Coronavirus Information Center (though falsehoods about COVID-19 and vaccines still flourish on the site). It is also giving away $100 million in grants to support small businesses that have been affected.
On Monday, Facebook published a survey indicating that one-third of all small businesses in the US have stopped operating because of the coronavirus.
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Rob Price was a senior correspondent at Business Insider, based in San Francisco. He wrote investigations and long-form features about platforms, people, and power in Silicon Valley.His stories variously led to attorney general investigations, large-scale internal reviews at major tech companies, high-profile personnel departures, citation by state and federal lawmakers, and the closure of a well-funded startup. His 2022 story on the Bitfinex hack is being adapted into a feature film, and in 2024 he received an SPJ NorCal Excellence in Journalism award for his reporting on AI and relationships.Rob's scoops and exclusive stories were cited by The New York Times, Bloomberg, the BBC, Associated Press, Reuters, CNBC, Politico, The Guardian, Axios, and many other national and international publications. His writing has also been published in or syndicated by The Washington Post, The Independent, Vice, Slate, and elsewhere, and he appeared on CNN, the BBC, CBS, Reuters, ABC Australia, and other broadcast media to discuss technology, business, and culture.He worked for Business Insider from 2015 to 2025. Prior to joining the features team, Rob covered Facebook and Silicon Valley, and before that wrote about tech business, policy, and the gig economy in London. Between September and October 2019, he was acting executive editor for Business Insider's UK bureau. He also sat on the board of directors for the San Francisco Press Club, the leading non-profit media advocacy group in the Bay Area, and was a volunteer crew member at the Marine Mammal Center, the world's largest animal hospital for marine mammals. You can contact Rob Price via email at robaeprice@gmail.com, or +1 650-636-6268 (Signal / WhatsApp / Cell). Selected stories:— They spoke out against their employer. Then they were hit with trade secrets suits.— The rise of 'shadow stand-ins'— App, Lover, Muse: Inside a 47-year-old Minnesota man's three-year relationship with an AI chatbot— Deel Speed: The inside story of a $12 billion HR startup's breakneck growth— Private islands, flying cars, and psychedelic parties: Inside the wild post-Google lives of Larry Page and Sergey Brin— 'I want your Instagram account': First came the threatening texts, followed by the SWAT teams. Then someone wound up dead.— Inside Iconiq: How Mark Zuckerberg's banker built a secret Silicon Valley empire and made billions— Gaia was a wildly popular yoga brand. Now it's a publicly traded Netflix rival pushing conspiracy theories while employees fear the CEO is invading their dreams— A drunken late-night assault allegation has roiled the secretive world of Mark Zuckerberg's private family office. Personal aides are speaking out about claims that household staff endured sexual harassment and racism from their colleagues.
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