Facebook Inc could find revenue growth opportunities in the Asia-Pacific region where more than 30% of online commerce takes place through social media, Fox Business reported, citing consulting firm Bain & Co.
The social networking giant generates 50% of its revenue from the United States and Canada despite the fact the two countries account for only 13% of the company’s monthly active users. The U.S./Canada region is the social media company’s largest market by revenue and its average revenue per user is growing faster here than any other region. But, as the company plans to grow its advertising on Instagram and monetize Messenger and WhatsApp, there may be a chance in that trend in coming years.
Opportunities in Asia
Bain & Co believes that Facebook can be benefited from growing use of social commerce in Southeast Asia. More than 30% of e-commerce in the region takes place through social media, versus 7% in the United States.
Facebook looks to facilitate online commerce through all of its apps and the social networking giant could boost its average revenue per user in a region with a user base larger than the U.S. and growing much faster, according to the report.
In Southeast Asia, most social commerce is done through a messaging app like WhatsApp. Before placing an order, users use messaging app to learn about products they find on Facebook or Instagram.
The report claims that the amount of organic interaction between users and businesses on Facebook’s messaging apps is significantly higher than in other regions. For example, the number of messages users send to businesses on Messenger in Thailand is twice as high as the global average, according to Facebook. “That’s important to note because Facebook CEO Mark Zuckerberg says that’s a key step in monetizing its apps. Once users and businesses are interacting on their own, Facebook can monetize an app by releasing tools to reach more people,” the Fox Business article reads.
Facebook has 629 million monthly active users in its Asia-Pacific region. It’s a good bet most of those users are on either Messenger or WhatsApp as well. eMarketer estimates that Facebook’s ad revenues will grow to $33.76 billion in 2017.
According to a report by Retail Dive, small and midsized businesses that don’t have big advertising budgets are benefiting by building e-commerce-enabled social media sites. A study from Business Intelligence last year revealed that social media boosted its share of e-commerce referrals nearly 200% between the first quarters of 2014 and 2015. The top 500 retailers made $3.3 billion from social shopping in 2014, up 26% from 2013, according to the Internet Retailer’s Social Media 500.
Facebook Betting On E-Commerce Sector
Facebook Inc is trying to get a foothold in the e-commerce sector in a bid to steal market share from Amazon, which dominates the e-commerce scene in providing a B2C platform for businesses to sell directly to consumers.
The social networking giant is focusing on consumer-to-consumer (C2C) segment. The company in October 2016 announced a new food-delivery option on its social networking website, making online shopping easier for more than 1.5 billion users.
Users now can buy movie tickets, order food delivery and book salon appointments straight from the app. It also launched Marketplace to allow users buy and sell stuff within a local community.