On Tekedia Live tomorrow, 11-11.30am Lagos time, connecting via Week 15 of Tekedia Mini-MBA digital board, I will focus on the implications of Facebook Shop on the African ecommerce and fintech ecosystems. If all business profiles on Facebook and Instagram become stores, and Facebook already a “continent” of itself, I expect a major dislocation in the world of digital ecommerce.
Facebook is expanding into the world of e-commerce, announcing a new service that puts it in competition with Amazon and eBay. Facebook Shops will allow businesses to set up free “storefronts” on Facebook and Instagram…
Facebook is a website where most people spend a significant amount of their online time, and if they can buy most of the things they need therein, the value propositions for other ecommerce platforms will diminish.
As that happens, I see a disintermediation for the world of fintech. If Facebook can help me process that payment, why do I need a fintech to waste 1.99% since Facebook direct fees will naturally be lower? We will examine the implications and two articles I have in Harvard Business Review on this redesign.
The biggest risk to Amazon, from Facebook Shop, is that the commission it takes on sales from vendors is the business. Commission on sales is not Facebook’s business and Facebook plans to waive that commission for businesses that sell on its platform. If you sell books on Amazon, you will pay Amazon say 10% as commission on gross. But on Facebook, that is your money to be kept. Facebook does not need the commissions as its core business is advertising but Amazon needs that money as that is the business of the merchant aggregator. Facebook Corp is a “continent” with an excess of 3 billion people, well ahead of Amazon’s forest. On logistics, provided you are not promising same day delivery, most economies with functioning postal services will serve these Facebook vendors.
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