Trading is anchored in the DNA of human beings and this is exactly what Facebook found out the last few years. The social media giant saw a major increase in people that sell or buy products to or from each other via their platform. This mainly happens in social groups, where people who are interested in certain products gather together to buy a 2nd hand or new product.
When you are a social platform, like Facebook, with 1.5 billion users and 450 million people that are already trading, you see a possibility to extend the features of your platform to attract even more users.
And so does Facebook who introduces Facebook ‘Marketplace’ to enter the market of electronic markets.
With the new feature people are now able to sell and buy products in a more structured way than before. With the ‘market’ button that is from now on integrated in the Facebook applications, people can see and bid on what is sold in their environment and are enabled to filter on price, category and location. Besides this a seller only has to make a picture of the product, give a description, decide on a price and share their location to upload their product to the new marketplace.
The new feature sounds great and easy, however the question is if Facebook Marketplace is able to compete with the established electronic markets like Ebay or for example Marktplaats in the Netherlands.
When we compare the first version of Facebook Marketplace, with these existing electronic markets, Facebook definitely has a chance of succeeding in competing.
First of all Facebook starts this electronic market with a huge user base linked to their platform. With Facebook Marketplace the user can have more activities under one roof and going to an external application for selling or buying on a marketplace will be history.
Secondly Facebook creates a certain trust with the link between the seller or buyer and his or her Facebook profile. Trust is an important issue for electronic markets and existing markets are trying to improve this aspect for many years. However the users of their platform will never have such a personal page as the users of Facebook.
Thirdly Facebook Marketplace has a focus on location. On the homepage products in the direct environment will be shown and this distinguishes their electronic market from the existing markets. In which it is possible to filter on location, but they do not focus or stimulate the user to buy or sell a product in the direct environment.
Obviously the established electronic markets have more experience in the market and their own user base that comes to their platform to actually sell or buy something, which is not the case for Facebook, where only 450 million people are buying and selling now.
However this looks like a strong extension for a social media platform that has to be innovative to remain interesting for their current and new users.
Sources:
http://newsroom.fb.com/news/2016/10/introducing-marketplace-buy-and-sell-with-your-local-community/
