Facebook's prospects: 650 million user shopping conversion rate up to 6%

Lead: online edition of Forbes magazine, USA Today, analyzes the current situation and trends of direct e-commerce business through the Facebook platform.

The following is the full text of the article:

Market situation

With 650 million users worldwide using Facebook as a communications and information-sharing tool, the platform has become an alligator in advertising and virtual goods. But does the enthusiasm of the user clicking the "Buy" button on Facebook match the "Share" button?

Although Facebook has become a standard advertising and marketing channel for retailers, its development is still at an early stage as an e-commerce platform. However, companies are exploring various channels to entice users to shop on Facebook.

So far, the biggest E-commerce app on Facebook has been to attract traffic through advertising, or to post discounts or new information on Facebook. Retailers also deploy the "like" button on their websites, providing users with a convenient channel to automatically create links on Facebook. They also use powerreviews and other services to post product reviews on Facebook. In addition, retailers can integrate Facebook's open graph technology with their own web site, showing users a birthday buddy list and reminding them to buy gifts.

Moreover, startups such as 8thBridge and Payvment also help companies sell their products directly through Facebook, so that users do not have to visit Third-party websites to do their shopping. Companies that are willing to sell their products directly on Facebook are growing in number.

But the latest report by Forrester Research, a US market researcher, shows that Facebook is better suited to small retailers, niche products or discounted goods, while most e-commerce retailers find it hard to profit from Facebook. Sucharita Mourproux Sucharita Mulpuru, a Forrester analyst, said that for most large retailers, Facebook's best interests remain the so-called "funnel top"--for branding, But it can't attract real buying behavior.

A Facebook spokeswoman pointed out that the company is an important source of traffic for online retailers and that the importance is still rising. In October 2010, Facebook's referral traffic to Amazon grew 328% per cent year-on-year, while Google slipped a 81% increase in 2%;facebook's referral traffic to ebay, and Google slipped 3%.

Facebook can also offer a variety of social networking tools to help companies boost sales. For example, sponsored stories can show whether a user's buddy likes a company or a product. The 1-800-flowers.com website offered 50 Facebook credits virtual coins and 15% flower discounts to Facebook users during Valentine's Day promotions, thus attracting 4000 deals from Facebook.

Shopping directly on Facebook

While the recommendation of friends can prompt users to shop through Third-party websites, shopping directly on Facebook has become a common cause.

8thBridge has helped companies such as 1-800-flowers, Hautelook and Brooks Brothers sell their products on Facebook. The company can get a lot of attention by allowing users to do their shopping directly in the news feed stream through their Facebook storefront.

With this service, the enterprise can display a video-like element in the news feed, and when the user clicks on the "play" arrow, they can quickly understand the product and complete the purchase process. Wade Gerten, the 8thBridge CEO, Wede Gotten that users will be 18 times times more likely to shop directly in the news feed than to go shopping on a third-party web site. In addition, opening a store in news feeds can significantly increase the willingness of users to share products with their friends.

"The trend is that more people are listening to their friends on Facebook and fewer people are listening to the brand." "Gotten said.