How is Facebook’s New Shop Feature Going to Affect Shopify? Let us See!

Facebook on May 19th had announced the much-anticipated rollout of Facebook shops. This feature will be available for both the Instagram and Facebook platforms. The new feature shops will allow the users to display their products in a virtual storefront.

The company mentioned in its press release that it would be looking at strengthening its collaboration with other eCommerce platforms such as BigCommerce and Shopify Inc. While collaborating with both of these parties, one must wonder if being another player in the eCommerce industry will be enough for Facebook's gaols.

Now let’s have a look at Shopify vs Facebook shop

There is no doubt that Shopify is one of the most successful eCommerce platforms out there. The company has been growing continuously ever since it has been launched and Shopify Developers around the globe trust Shopify for building great websites and applications.

So, the question here is, how is Facebook shop feature going to affect Shopify’s growth? We will put forward some points that will make it clear to you.

Let’s know more about the specifics of the products.

Let’s talk about the fees first. Shopify has a monthly payment plan starting at $29, and it goes as high as $2000 for Shopify Plus. Shopify also charges transaction fees ranging from 2-0%, Shopify reward you with 0% transaction fees if you are using their payment gateway. On the other hand, the Facebook shop is free to use, but the company charges a flat 5% sales fee

when it comes to ease of use, both of these platforms are incredibly friendly. Shopify also offers some valuable solutions to big enterprises; Facebook shops seems to be suitable for small businesses and merchants. Both of these platforms are easy to set up, and no programming skills are required. In both the platforms, you have to create the main page, upload your products with all the details and you are ready to sell. The main setup is simpler and easier on Facebook, but Shopify offers more when it comes to webpage design and back-end management.

Shopify is built as a one-stop-shop for businesses and merchants who are looking to sell their products online. This makes Shopify unmatched in terms of flexibility and features. If you are ready to pay for Shopify Plus Development, there’s no limit to what you can do with it.

However, Facebook beats Shopify when it comes to reaching. Facebook has over 2.5 billion active users and a lot more organic traffic than Shopify. Having your shop on Facebook’s platform should also improve the effectiveness of Facebook and Instagram ads as all the data is in one place.

So, who will win this race between Shopify and Facebook’s shop?

Facebook shops can be seen as a complement to Shopify. Facebook shops are only the beginning, and the tech giant is not going to stop growing. Shopify might lose its charm because the main components of eCommerce are traffic and sales. In both of these areas, Shopify will face difficulties.

Shopify holds a strong position in the domestic eCommerce market. The company is the second-largest platform in the eCommerce Development industry.

On the other hand, the traffic comes from search engines, ads and social media. Instagram and Facebook are the best social media platforms for online marketing. Shopify uses social media for the ads and for the marketing of their products. As most of the traffic comes from these platforms, the shopping experience will become fully integrated into the platform.

Shopify can aggregate all the functionalities at one place. This feature is perhaps one of the biggest appeals as it allows you to keep a check on the sales on different platforms such as Facebook and Amazon from one place.

Finally, it would be easy for Facebook and Amazon to push Shopify out by not allowing integration and by not allowing people to link their ads to the Shopify store.

Now let’s talk about the valuation

Shopify has a market of up $86.85 billion while Facebook’s market cap is $ 657 billion. Shopify has 1 million merchants and $135 billion in yearly sales, whereas Facebook has 2.5 billion monthly active users, and Amazon has $335 billion, active users. Now when we compare this data, we can say that Shopify stands last in the valuation. The worse is that most of the sales in Shopify come from social media and Facebook/Instagram ads.

Now Facebook has entered the space, which will result in a decrease in the growth of Shopify, and its price will come crashing down. When it comes to valuation, Shopify is priced for huge success. This new shop feature of Facebook will take many Shopify investors by surprise, and it is definitely going to affect the growth of Shopify.

Final words

The shop feature of Facebook is going to be successful for Facebook as it already has a huge number of users which is a plus point for Facebook. The shop feature could drive $30 billion in revenue, and it is believed that Shopify is has a lot of downside than upside potential. This is the reason why Facebook’s new shop feature can be a reason to worry about Shopify.

Shopify faces too much competition from its competitors. Facebook shops and Facebook ads, on the other hand, can serve as a complement to Amazon, which is why it is an incredibly positive development for Facebook.