Why ‘Buy’ Buttons Will Pose Big Challenges for Google, Facebook, Pinterest and Twitter

by Nikhil Joseph 0

One of the big news stories this year for those tracking social media space is the introduction of ‘Buy’ button that would allow native commerce to happen on platforms like Facebook, Twitter, and Pinterest. Google, too, has for some time now included product listings from local merchants in relevant search results. As Recode reports, there are significant hurdles before these internet giants can realize their vision of seamless commerce for consumers without leaving their website.

“A new battleground for the consumer Web has come into sight and these players are coming for your wallet. But for the ones like Twitter and Facebook that have been conducting public tests for some time, progress is hard to find. And for Google and Pinterest, there are significant hurdles that will stand in the way of their goal of convincing searchers and Pinners to become buyers next. Among the challenges these Goliaths face is integrating inventory and payments systems from retailers big and small that have little experience selling stuff outside of their own storefronts.”

This kind of social ‘on-platform’ commerce has only really succeeded in China. Chinese social media platforms like WeChat, Weibo and Qzone are at least 5 years ahead of the likes of Facebook and Twitter when it comes to getting users to make native buying decisions. WeChat (comparable to Whatsapp or Facebook Messenger), for instance, not only allows users to send messages and share pictures but also buy products from verified brands, order a taxi or book a hotel room. All of this is powered by WeChat’s payments API, and millions of users have signed up to link their bank accounts to their WeChat wallet.

It’s tough to say if the likes of Facebook and Twitter will manage to replicate Chinese-style social commerce success here in the US; they’re both fundamentally different markets in terms of demographics, consumer preferences and regulations. Unlike in the US, young social media users in China tend to have greater disposable income than older demographics as they came of age during a time of far greater economic growth.

American users also seem more comfortable with having single-use apps built for specific purposes (Instagram for photos, Twitter for micro-blogging, Amazon for shopping and so on). That said, for specific brands, say, a high-end apparel merchant, integrating commerce to a platform like Pinterest or Instagram can be a great way to drive sales among specific segments.

Overview by Nikhil Joseph, Analyst, Emerging Technologies Advisory Service at Mercator Advisory Group

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