What is F-Commerce and Why Should You Care?

If you’re one of Facebook’s 650 million active users, you’ve seen some changes implemented into the site during your tenure there. Apps that integrate your Facebook with your Twitter, your iPhone and other tech gadgets were a huge hit with Facebook users.  Zynga, getting ready for an IPO, has done so thanks to its domination of the Facebook games category.  Since the online poker crackdown, its version, Zynga Poker, will surely gain even more popularity.  However, the area of Facebook that’s garnered the most interest in recent times is its e-commerce platform – which is aptly referred to as “F-Commerce”, as it combines Facebook with traditional online selling. Nearly every type of merchant you can think of is using Facebook to sell or market their products – from the Mom & Pop stores up the street to national brands like Levis, Frito-Lay and Ford. So, why is Facebook so popular amongst merchants, both big and small?

Answer: Sheer numbers

A recent study conducted by GreenCrest Capital and data collected from other sources found that:

  • One of every thirteen people on Earth uses Facebook. Half of those are logged in on any given day.
  • 71.2% of US-based Internet users are on Facebook.
  • Each of those users have, roughly, 130 friends who spend a combined total of 700 billion minutes per month logged in to Facebook.

Simply “being logged in” isn’t the driving force behind the popularity of F-Commerce. It’s how these millions of users interact with each other and share information – like websites, items for sale and feedback on their online experiences. For example:

  • Over 30 billion pieces of information are shared between Facebook users each month. This includes links, fan pages, web stores, auctions, blog entries, photos, news stories and other Internet “happenings”.
  • Each user creates and shares about 90 pieces of information with their friends each month and is connected to around 80 different Facebook community events, pages and groups.

Not only is there potential for mass advertising, merchants who sell on Facebook have the opportunity to reach markets that were not accessible to them before, due to Facebook’s global reach. As it stands, 70% of Facebook users are located outside of the US and Facebook content is available in seventy languages in addition to English.

Trending data shows that the future of F-Commerce looks much like the present of F-Commerce – with growth being measured in leaps and bounds. Since the introduction of social plug ins that allow website owners to link their Facebook Fan Pages to their websites in April 2010, nearly three million websites have taken advantage of that option,  including over 80 of comScore’s U.S. Top 100 websites and more than 50 of comScore’s Global Top 100 websites. On average, ten thousand new websites link to Facebook each day, while nearly a quarter billion users interact with Facebook on those external sites.

Since its inception in 2006, Facebook’s user base has grown exponentially each consecutive year. In 2010, the number of US-based Facebook users jumped 145% over previous years, from 42M to 103M. The fastest growing demographic of people being turned on to Facebook is women aged 55 and older. This demographic saw an astounding 900% increase in users between 2009 and 2010, skyrocketing from 954,000 to 9.7M in just one year!

As Facebook continues to implement commerce-based features into its platform, like the Facebook Credits system (Facebook’s equivalent to PayPal) that was introduced at the end of 2010, interest and popularity of F-Commerce is only going to continue to grow. Analysts expect Facebook to generate nearly $5B in revenue for 2011. Given these statistics and the company’s current market value of $89B, it’s safe to assume that the F-Commerce bandwagon is on the right track and should remain so for the foreseeable future.

2 Responses to “What is F-Commerce and Why Should You Care?”

  1. Stuart Says:

    I have not used Facebook to buy any products. I think the e-press is hyping the use of Facebook. And saying that we, as a business, need a FB page.

    When in actual fact its not as important in business as people make out. Real people are still only using FB for photo sharing and friends contacts, nothing business like!

    I envisage FB to be not used as a real business tool for much longer.

  2. Helen Says:

    @Stuart – I agree that we still need to wait and see how viable F-Commerce will become. It is, however, something that a merchant should explore…especially if the solution is easy & free (like the Vendio Facebook app).

    I do argue that a Facebook fan page can be a very important marketing tool for your business. But, it’s definitely NOT for every business. In general, businesses need to calculate the ROI and see if it’s worthwhile to develop any of the social channels just as they would a new sales channel.