Facebook to compete with Amazon and Etsy, as it launches shopping feature

Facebook is launching Shops, a service that will allow businesses to display and sell products on its platforms, it was announced on Tuesday.

The new service, which Facebook CEO Mark Zuckerberg rolled out in a Facebook Live appearance is designed to improve the online shopping experience and help businesses that have suffered amid the coronavirus pandemic.

“Our goal is to make shopping seamless and empower anyone from a small business owner to a global brand to use our apps to connect with customers,” Zuckerberg said.

Facebook currently allows sales on the platform through Marketplace, which was launched in 2016 and allows users to sell personal belongings to each other

The service will also benefit Facebook by moving more online shopping inside the company's family of apps, translating to users spending more time with Facebook and sharing more data about their consumption habits.

Shops will be aimed primarily at businesses, allowing them to sell to customers on the app and potentially posing a challenge to commerce rivals such as Etsy and Amazon, which have profited from the increased online sales that have come with Covid-19 lockdowns.

While Facebook has boasted about how many small businesses are on its platform, it has struggled to break into e-commerce despite previous efforts.

The new product will provide business owners with the ability to create a central "Shop" that is accessible from Facebook, Instagram, WhatsApp.

Facebook Shops will tie at least some of those efforts together, enabling businesses to set up a single online store accessible via both Facebook and Instagram. A checkout feature will enable in-app purchases.

Zuckerberg said he believes Facebook Shops could become the primary online presence for many small businesses, including more than 160 million small businesses that already use Facebook to market their products.

Later this summer, Facebook will launch Instagram Shop, a service that will allow the platform’s users to browse products from their favorite brands and creators in one tab

Facebook is also rolling out a tool to connect loyalty programs and a shopping feature showing product tags underneath live videos, allowing viewers to make purchases directly while watching.

Zuckerberg also said that the company is looking to tap into artificial intelligence(AI) to help companies set up their shops.

"Shops are going to be able to use our AI to create better more personalised experiences than you’re going to have almost anywhere else," Zuckerberg said.