Facebook, the world’s most popular social media site, will enable buyers and sellers to transact on Marketplace-its proprietary trading platform. Retailers will be able to offer delivery options for their wares on Marketplace. On the other hand, buyers will pay for merchandise via its app or site. This unprecedented move by Facebook is giving eBay and Craiglist a run for their money.
How Strong is the Competition?
Facebook Marketplace with nearly 0.8 billion MAUs (monthly active users) is offering stiff competition to eBay, a multinational e-commerce giant. Craigslist, a reputed classified advertisement portal is also facing stiff competition. Facebook recently declared that sellers registered on US Marketplace could use the platform for offering shipping & delivery options throughout the continental US. On the other hand, buyers could pay for their consignments on its website or app via PayPal or payment cards.
Hitherto, only firms having a Facebook store were allowed to use the Marketplace platform to sell goods. eBay will feel the heat as traders and consumers start exploiting payment and shipping opportunities. The US-based e-commerce site derives a substantial portion of its revenues from listings of independently-owned businesses and smalltime traders.
Other Players to Face the Heat
That Amazon.com may also face competition from Facebook’s Marketplace could be a case in point. Nevertheless, Amazon can fall back on Prime for staving off competition. It’s worthwhile to note that Facebook is not charging a selling fee from the traders for promoting their items on Marketplace.
In sharp contrast, selling an item (for the majority of categories) on eBay attracts a local fee equivalent to 10% of the product’s selling price. So, will there be a massive exodus of traders from eBay? It’d be a tad premature to predict the outcome.
Meanwhile, market analysts are avidly watching as to how the strategy will impact Craiglist’s traffic. Going by common sense, Craiglist will not be affected much as the site does not heavily depend on transactions.