According to MediaPost, this holiday season not only is the social network pitting itself against retail giants such as Amazon, eBay and Walmart (via its Shopycat app), but against a host of startups like Wrapp and Gyft. Wrapp allows users to give gift cards to their Facebook friends, while Gyft offers a mobile app that enables users to send gift cards through Facebook, email or text.
The question is, will Zuckerberg and company be content to remain just the tip?
“Facebook Gifts has a chance to take a healthy bite out of Amazon’s wallet,” said Yariv Dror, CEO of Facebook store platform provider Storeya, who credits the under $50 price limit imposed by Facebook as a key factor. “Fifty dollar deals sound like a small portion of the e-commerce market,” said Dror, “but our numbers show that 57 perent of the millions of products that have been imported into Facebook using our platform match this figure of $50 and below.”
Dror suggests that the low price point would allow network users to “test the water” without incurring too much risk, which, for Facebook, could result in a positive outcome. “Without irritating large online commerce companies like Amazon and eBay, Facebook is actually taking a nice bite from their market, and considering its annual $1B profits from ads, this is certainly a market it needs to be in,” Dror added.
Others, such as Wired senior editor Ryan Tate, view Facebook’s move into social commerce as comparatively benign. “The launch of Facebook Gifts is modest: Facebook is emphasizing sub-$50 products like socks, cupcakes, teddy bears, and Starbucks gift cards,” said Tate.
But, with 1 billion users and counting, is anything that Facebook does benign? Even though Gifts puts Facebook on the very edge of a territory where Amazon reigns as king, will Zuckerberg be content to stay there? To further quote Tate: “If anyone is better positioned than Amazon to recommend products to people, it’s Facebook, and the company is off to an auspicious start. It’s a small start, but then so was Facebook itself.”
Is Gifts a shot across Amazon’s bow? Is Facebook testing the social commerce waters, and do you expect more to come? It’s anyone’s guess, but I would like to hear your viewpoint, so please leave a comment.
(UPDATE: No sooner did I write this post than Facebook announced the launch of a new e-commerce feature called Collections, which it is testing with a few select brands. All Facebook reports that Collections enables Facebook users to not only like, but collect, want, or buy products that brands share through images on the social network.
If Gifts is Facebook’s way of treading on Amazon’s turf, then Collections is certainly the network’s way of doing something similar with Pinterest. So, in answer to my question, “Do you expect more to come?,” I guess the answer is resoundingly yes. What’s next?!)