KKW / Kylie Cosmetics / Instagram
- Facebook CEO Mark Zuckerberg said Wednesday that its shopping and payment services across Facebook, Instagram, and WhatsApp would become leading revenue drivers in the future.
- The company plans to build more commerce-related features and add additional tools that allow people to buy products directly through its platforms.
- It also plans to expand the ways in which customers can pay businesses via its messaging apps.
Facebook is betting on its shopping and payment services to drive growth in the future.
In a call with investors on Wednesday, after reporting first-quarter 2019 earnings that beat Wall Street’s expectations, CEO Mark Zuckerberg laid out the company’s plans to drive growth in the future. Zuckerberg was quizzed by analysts on whether Facebook, which also owns Instagram and WhatsApp, would look to its shopping and payment features to do so.
Read more: Instagram’s big bet on shopping could be worth $10 billion in 2021
Zuckerberg explained that while advertising will continue to be its leading revenue driver, this will be boosted by its plans for e-commerce and payment.
"It’s really a continuous spectrum and they’re not two different things," he said.
Facebook will build more commerce-related features on Instagram, Facebook, and Facebook Marketplace and tools that allow people to buy products directly through these platforms. As more users make in-app purchases, brands and businesses are likely to purchase more ads. These apps will also become more valuable to these businesses, which gives Facebook better leverage to charger higher advertising fees.
Instagram recently rolled out a new checkout button, which allows customers to easily buy products in its feed without leaving the app. A group of analysts from Deutsche Bank estimated that this new feature could draw in $10 billion in revenue in 2021 alone.
Zuckerberg is building the West’s version of WeChat
Zuckerberg also announced his plans to expand the ways in which customers can pay businesses.
That will involve paying companies directly through Facebook’s upcoming, giant messaging platform, a little like China’s messaging service WeChat.
‘I think what we’re going to end up seeing is building out Payments…The goal would be to have something where you can do discovery through the broader town square-like platforms in Instagram and Facebook. And then you can complete the transactions and follow up with businesses individually and have an ongoing relationship through Messenger and WhatsApp," he said.
Zuckerberg said that these apps lend themselves well to these transactions. "Everything there is very intimate and private [on messenger platforms] so it feels like a more natural space to be interacting with a business in a private way for doing transactions."
In the near-term, Facebook plans to keep fees on payments low or free, he said, but this could change long-term.
NOW WATCH: Watch Apple debut its own no-fee credit card
See Also:
- Mark Zuckerberg says Facebook will spend the next 5 years carving its business in two
- Instagram is mulling a new feature that would hide from others how many likes you get on your posts
- Federal investigators could go after Mark Zuckerberg personally in a legal escalation after massive privacy scandals
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Source: Business Insider – feedback@businessinsider.com (Mary Hanbury)