Meta Sets Priority on Facebook, Instagram Shopping, Competing With Shopify
Written by Luck Wilson on December 18, 2021
Facebook parent company Meta is prioritizing investments in on-site commerce and shopping in 2022, with a company-wide push to sell products more directly on Meta’s family of apps, including Facebook, Instagram, and Messenger, according to leaked documents obtained by Insider.
Dan Levy, who has been running the combined Ads and Business Platform team since 2019, on Nov. 1 shared a document viewed by Insider called “Commerce Guidance and Priorities for 2022” in which he identified selling goods from businesses (particularly US lifestyle brands), such as through digital storefronts like Shops on Instagram and Facebook Shops, as the company’s top commerce priority.
“This is our highest priority and largest investment area,” Levy wrote. “We need to make progress against our vision of our apps being a primary destination for commerce.”
Facebook, which recently changed its name to Meta, has been experimenting with ecommerce since at least 2015 when the company introduced buy and sell groups and in 2020 introduced digital storefronts for Facebook and Instagram as its advertising business took a hit. Now, as the company plots its next chapter as Meta, ecommerce is becoming an even bigger part of its revenue model.
It’s unclear exactly which payment methods Meta has or will offer through its digital storefronts, but it’s possible the emphasis on on-site sales could divert some business from Shopify, which one Meta insider referred to as the company’s “frenemy.” Overall, this person said, the goal of growing on-site sales is to get businesses to spend more on advertising.
“Shopify is a frenemy to Meta, but that’s putting it generously because Shopify is way ahead of everybody in commerce,” the insider said.
A Facebook spokesperson confirmed the company had been investing in commerce and sent a transcript of Meta’s latest earnings call in which CEO Mark Zuckerberg said: “Our next product priority is commerce, helping people discover new products that they’re interested in, and reach customers inside our apps. We’re going to unlock a lot of opportunities.”
The company will call 2022 a success, according to the document, if on-site shop ads are performing better than ads that direct users off its sites to buy products — which Levy said will be the “best and fastest indicator that our end-to-end commerce ecosystem is beginning to ‘work’” — and if the number of people buying products directly on Facebook or Instagram significantly accelerates.
The documents indicates Meta wants to extend what Levy called “strong existing buyer activity” on Facebook Marketplace, intended for consumer-to-consumer sales, into more on-site sales of products from businesses, and to get more people to do so by discovering shops and products through its Feed, Stories, and Facebook Groups. Notably, Meta plans to combine the Marketplace and Shops tabs on the Facebook app in 2022.
Additional priorities in commerce include “maintaining” its investment in its consumer-to-consumer marketplace, i.e. Facebook Marketplace, investing in building messaging commerce experiences on WhatsApp in Brazil and India, and digital commerce, which it defines as “digital goods/services like tips, stars, etc.” though it said the team will not be investing in this last priority in 2022. Shop Ads will focus on large and medium online and “online-leaning” lifestyle businesses.
In order to focus on these goals, Levy said Meta will explicitly not prioritize expanding new markets like the UK until at least 2023, nor investing in commerce partners past the ones it currently works with (including Shopify, Bravado, and Spring), nor expanding to new business segments other than US lifestyle merchants. The document also says Facebook will not invest in digital commerce for the metaverse until at least 2023.
Meta’s focus, Levy wrote, has changed in 2021 to emphasize growing products purchases made directly on Meta apps like Facebook or Instagram.
“Our offsite ecosystem remains critically important, not least because we will have US offsite sellers that decide never to upgrade to onsite and a large international presence of offsite Shops for quite some time,” Levy said. “That said, we are explicitly not prioritizing work aimed at growing our offsite ecosystem.”
This change is partly due to Apple’s iOS privacy changes, which limited the amount of information apps could collect on users, and which Facebook said has negatively affected its business during its most recent earnings call. Growth in on-site purchases will “help commerce merchants that are feeling the pain from Apple’s iOS change,” Levy wrote.
During that earnings call, Zuckerberg said “solutions that allow big businesses to set up shop right inside our apps will become increasingly attractive and important to them” following Apple’s changes.
Other internal documents show Meta is placing an emphasis on aligning the teams responsible for its commerce work. On Nov. 22, Levy shared the “Commerce Terminology Playbook,” which he defined — “extreme clarity on the words we use to describe our commerce work” — to help align what Levy said are thousands of people now working on its commerce products.
The document defines the new “Meta Commerce” (which it cautions is a term that should not be used externally) as its portfolio of commerce products and platforms including seller platforms like Facebook Pay, paid distribution such as Shop Ads, app-specific services like Facebook Shops and Marketplace, and new and emerging features like shopping in augmented and virtual reality.
Do you work at Meta or have insight to share? Contact the reporter Ashley Stewart via the encrypted messaging app Signal (+1-425-344-8242) or email ([email protected]). Check out Insider’s source guide for other tips on sharing information securely.
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