Instagram threatens Amazon with its e-commerce plans

The current dominance of electronic commerce by Amazon could be threatened if Instagram, with its 1 billion users worldwide, moves forward its plans to enter this field, as advanced by the new head of the service, Adam Mosseri.

Although proportionally it still represents a small portion of global transactions, e-commerce grows year after year and in 2018 it already reached a value of 2.86 trillion dollars worldwide. Image: Pixabay
Although proportionally it still represents a small portion of global transactions, e-commerce grows year after year and in 2018 it already reached a value of 2.86 trillion dollars worldwide. Image: Pixabay

In his first public interview on the company's future strategy since he took office in October last year, Mosseri explained to The Financial Times that his project for the firm is "to connect conscientiously the nodes between buyers, sellers and a large number of influencers" on Instagram.

The idea of ​​the manager is that the platform of photographs, owned by Facebook and that has about 1 billion users, takes advantage of its eminently visual nature to become, in addition to a place in which to show images to other Internet users, in a portal of sales.

Among other measures, Mosseri defended the introduction in Instagram of e-commerce functions such as the "shopping cart" and the "native checkout", which allow users to store products before buying them and pay directly in the application, without having to go to third parties.

Although proportionally it still represents a small portion of global transactions, e-commerce grows year after year and in 2018 it reached a value of 2.86 trillion dollars worldwide, after having experienced an increase of 18% with respect to the year. above, according to Digital Commerce 360 ​​data.

The sector is still dominated by a few big players, mainly Chinese Alibaba and JD.com and Americans Amazon, eBay and Walmart.

The range of devices with available internet connections allow you to buy at any place and time. Some countries in Latin America and the Caribbean already sell their products online to Chinese netizens.

A hypothetical breakthrough with Instagram in this field would hardly have effects for Alibaba and JD.com, since Instagram, like Facebook, are banned in the Asian country, but Amazon, with an overwhelming dominance in the rest of the world, could suffer the consequences.

The company directed by Jeff Bezos has been, so far in 2019, the portal in which almost half of all online transactions in the United States have been carried out (47% according to eMarketer), a juicy portion of the pie that Instagram could threaten

The application of photographs, in fact, already began a pilot program of direct sales in March, although limited to just over twenty brands (including Zara, Burberry, Michael Kors, Nike, Adidas, Prada, Uniqlo, Dior, Oscar de la Renta and H&M) and in which the payment is processed with PayPal technology.

Mosseri explained that it will still take several years to convert Instagram into a sales platform, since you have to build the necessary infrastructure, such as partnering with payment service providers in each country where you want to operate.

"That world (that of electronic commerce) is extremely fragmented. So it will take us a long, long time. This is not a year, but a project between five and ten years," said the head of the social network in his interview with The Financial Times.

The subsidiary of Facebook follows in the footsteps of another internet giant, Google, which last May announced a redesign of its shopping portal "Shopping" which, as the main novelty, allows Internet users to purchase products directly without having to access the seller's website

Until then, the section of Google destined to commercial transactions (a tab that appears next to those of "images", "maps" and "videos") showed to the user photographs and information on different brands that commercialize the searched product, but to buy it you had to access the seller's website.

Source: EFE

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