Facebook Launches Virtual Shopping Mall, Saying It Will Help Small Businesses

Shannon Bond

May 19, 2020 / 11:30 am

caption: Facebook hopes to make commerce a bigger part of its business by letting businesses set up storefronts in its apps.

Facebook is making a big push into online shopping by letting businesses set up free storefronts on its social network and Instagram.

Businesses can feature items in their shops, advertise them to users, and communicate with customers through the company's messaging services. Shops will eventually be integrated across Facebook's apps, including WhatsApp and Messenger.

Shoppers can buy products either through links to the businesses' own websites or by using Instagram's checkout feature, which enables purchasing within the app. Checkout will become available on Facebook in the future.

The company has been looking to make commerce a bigger part of its business in a bid to capture users' time and new sources of revenue. CEO Mark Zuckerberg said those efforts have ramped up because of the coronavirus pandemic, which has left many of the 160 million small businesses that use Facebook's apps struggling.

"We're seeing a lot of small businesses that never had online presences get online for the first time, and we're seeing small businesses that had online presences now make them their primary way of doing business," he said in a live-streamed announcement on Tuesday. "For lots of small businesses during this period, this is the difference between staying afloat and going under."

Facebook will not charge businesses to create virtual storefronts, Zuckerberg said.

"We know that if Shops are valuable for businesses they're going to in general want to bid more for ads. We'll eventually make money that way," he said, noting that small businesses make up "the vast majority" of Facebook advertisers.

Facebook first launched the checkout feature on Instagram in the U.S. last year, letting people stay in the app to complete their purchases. Instagram takes a cut of each sale.