Facebook launched a gift store interface last week. Its 1 billion users will soon be able to select gifts from a store to send to friends. It’s not the retailer’s first attempt to make money through retail. The social network allowed retailers to have store fronts on the site last year, but those stores were closed because of a lack of demand.
Facebook also had an unsuccessful gift-giving business several years back, but many of the gifts were virtual goods and social games.
There are three big reasons to be pessimistic about Facebook’s latest gift shop, Sharon Edelson at Women’s Wear Daily reported.
The roadblocks in front of Facebook could keep its commerce business from being successful:
- Facebook faces a ton of competition, especially from Amazon and eBay. Those brands have had year to build credibility, attract vendors and perfect their business models. Google also got in on the game Friday, launching its Google Shopping site.
- People don’t see Facebook as a place to shop. “Right now, people go on Facebook to trade pictures,” Victor B. Anthony, an analyst at Topeka Capital Markets, told WWD. But, he conceded, “as consumers learn that they can do a lot more on the platform than look at someone’s status, they’ll shop.”
- Facebook is charging a fee to shop. That’s the “deadly concern,” Forrester researcher Sucharita Mulpuru told WWD. “Facebook is such a nominal source of sales right now. According to all of our data, any social network links are not terribly effective.” she said.
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