Facebook announced a new product called Facebook Shops last night, its latest online shopping feature which lets small businesses set up an online shop.

Facebook Shops at a glance

• Businesses can create a Facebook Shop for free
• Businesses can have collections based on the type of products they sell
• The look and feel of the shop is customisable by the businesses
• Touchpoints for Facebook Shops could be the business’ Facebook Page or Instagram profile and can also be discovered by Stories or Ads on Facebook platforms.
• You can save products you’re interested in, place an order and checkout (provided sellers have enabled Instagram Checkout and Facebook Pay) all within the app.
• WhatsApp, Messenger and Instagram Direct to be customer care platforms for businesses. Future updates will even let you shop on these messaging platforms.
• Live Shopping feature to be added soon to Facebook Live and Instagram Live – sellers or influencers can tag products before going Live.
• Loyalty Programs to be connected to Shops in the future.

But wait, Facebook already had Marketplace, so what’s new here?

Well, unlike Marketplace which was only on the Facebook platform (and Instagram, which has its own version of e-commerce outlet called Shop), Facebook Shops has ambitions to be a one-stop shopping interface, across all its platforms such as Facebook and Instagram. You can set up a Shop on Facebook and Instagram simultaneously, although Instagram Shop is expected to debut in a few months.

“We are seeing that many of the small businesses are moving online. We want to make it easier for them to do that too. So Facebook Shops allows a small business to easily set up a shop inside our apps. It will be a very fast experience for people to discover their products and be able to buy things directly,” said Mark Zuckerberg in an interaction.

Privacy measures upfront

It is rare to see Facebook announce a new product and at the same time release a privacy-focused article around it at the same time.

Having burned its reputation by displaying user shopping history on their profile page in the past (we all know THAT engagement ring purchase story), Facebook said it will not let your friends know what you have bought on Facebook Shops. If you choose to share it, then it will be allowed.

Facebook says it will only share aggregated data with the business to give it an idea of the traffic its Shop is getting. While this may sound great, remember Facebook is still monitoring your Shops behaviour and it will influence what shows up in your personalised ads or even the other way round. Your Facebook and Instagram behaviour could determine what Shops are presented to you in ads. At the end of the day, Facebook is still getting insights to improve its adtech platform.

“Our business model here is ads, so rather than charge businesses for Shops, we know that if Shops are valuable for businesses they’re going to in general want to bid more for ads,” Zuckerberg had said in a livestream post the launch. Not to mention, if anyone uses Facebook’s Checkout feature, Facebook gets a cut of the transaction.

User information will only be known to the business once you purchase an item on the Shop “using Facebook Pay on Facebook or checkout on Instagram.” Both of these features aren’t available in India, yet. The shopping tab on Instagram takes you to the website from where you make purchases. In India, Facebook is pushing for WhatsApp Pay to be official. Who knows, that could be a check out option too for Shops in India, whenever Shops and WhatsApp Pay debut here.

Capitalising on the pandemic?

In her book, The Shock Doctrine, author Naomi Klein talks about how crises are exploited to establish controversial practices, while the population is emotionally and physically distracted to really fathom any response.

In its blog post, Facebook has referred to a State of Small Businesses Report, and the job losses and small businesses shutting down due to Covid 19, as one of the major reasons for creating this platform. Having covered Facebook all these years, there’s no way this integrated Shops platform wasn’t in the works. The lockdown just gave Facebook the opportunity to double down on the development cycle and a perfect time to launch it.

Marketplace on Facebook and Messenger; Shops in Instagram; WhatsApp Business are three separate shopping experiences. Given Facebook’s ambition to integrate all the messaging apps in the future to have a unified privacy-first messaging interface, this integrated Shops announcement also has all the hallmarks of a Facebook-focused product in the making.

With an emotional peg such as ‘we are helping small businesses get back on track, by having this unified approach across our platform’, will policymakers be as aggressive to ask Facebook to break up?

Facebook’s ad platform is among the best out there. Already many small businesses operate on Instagram, Facebook, WhatsApp Business. Will they be forced to also open a Shop interface or will they be seamlessly transitioned? Every third or fourth post on Instagram is an ad. Will Instagram Shops intensify those ads. Will Shops-related ads get more priority over mere Sponsored posts?

Closer home, Reliance’s Jio Mart app is going to be integrated into WhatsApp Business to power 3 crore small Indian kirana shops, enabling digital transactions. Given that WhatsApp Business already has a well-oiled headstart in peer to peer transactions, will it remain a separate product or will see a future integration with Facebook Shops?

At launch, Facebook Shops looks like a US-centric product. It will be interesting to see if it launches any time soon in India, especially now that Jio Mart has promised a WhatsApp-powered business proposition.