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Social Shopping Is Taking Off, and Facebook Is the Biggest Beneficiary

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The percentage of users shopping directly in social media apps increased 69% last year.

People are getting used to the idea of shopping on social media.

22% of consumers say they bought something directly from a social media app or website in the fourth quarter, according to a CivicScience survey. That’s up from 13% in the fourth quarter of 2018.

Much of that growth seems to be driven by Facebook (NASDAQ:FB), which continues to invest in its Marketplace platform and shopping on Instagram, and is also working on a nascent mobile payments platform in WhatsApp. Instagram, in particular, with the introduction of Checkout, new features in the Explore tab, and the ever-expanding presence of “influencers,” has had a big influence on shopping habits.

While other social media platforms like Snap‘s (NYSE:SNAP) Snapchat and Pinterest (NYSE:PINS) have tried to edge their way into consumers’ shopping patterns, Facebook has been the biggest beneficiary so far.

Three screenshots depicting Checkout on Instagram.

Image source: Instagram.

The biggest effect so far

Two Facebook products have had the biggest effect on social shopping so far.

Facebook Marketplace, which is Facebook’s answer to Craigslist, launched a little over three years ago, and it’s now available in over 100 regions. Founder Mark Zuckerberg says Facebook sees millions of interactions between buyers and sellers every day on the platform.

Facebook is continually taking steps to improve Marketplace, from tools that help local sellers list items and buyers find them to expanding the platform to include inventory from e-commerce companies. The moves have made shopping on Facebook Marketplace a much different experience from Craigslist or other online classified advertisement sites.

Facebook’s big push into shopping on Instagram may be even more noticeable. Instagram is one of the social media platforms users go to specifically to discover new products. Influencer advertising has become an entire sub-industry of digital advertising. And influencers on Instagram have more … influence … than most other social media platforms. 42% of daily Instagram users have made an influencer-based purchase, according to another CivicScience survey. That’s up from 34% in 2018.

There was a noticeable increase in respondents saying they’ve shopped directly on social media after Facebook introduced Checkout on Instagram. Checkout enables Instagram users to seamlessly buy items they see on Instagram without navigating to a merchant’s website. The product is still limited to select retailers, which means there’s a lot of potential for growth as the number of participating merchants expands.

Competitors in social shopping

Facebook’s biggest competitor in social shopping may be Pinterest. Many Pinterest users use the platform exclusively for discovering things to buy.

There’s strong potential for Pinterest to copy Instagram Checkout. It already offers retailers Shopping Ads (as does Facebook), which provides users with details about items and then sends them to a checkout page on the retailer’s website. Developing a more seamless checkout process like Instagram Checkout could help Pinterest increase the value of those ads through higher conversions and increased engagement.

Meanwhile, Snap has been trying to edge its way into social shopping by using its advanced camera and image recognition capabilities. It partnered with Amazon in 2018 to offer visual search capabilities within its app, sending users to Amazon’s marketplace whenever they Snap an item they’re interested in buying out in the wild. Pinterest offers a similar feature, as does Amazon’s app.

Importantly, Snapchat’s user base doesn’t use the app to discover items they want to buy like they do on Instagram or Pinterest. As such, the company has wisely shifted to investing in areas where its users have already made a habit of opening Snapchat — consuming content and connecting with friends.

Facebook, with its massive and highly engaged user base and head start in social commerce, sits in the catbird seat when it comes to capitalizing on the growing trend of shopping directly on social media apps.

As always, management is thinking long-term. “We are optimistic on the timeframe of years, right, not driving next quarter’s business,” Zuckerberg said on Facebook’s third quarter earnings call. And with just 23% of social media users actually shopping directly in apps like Facebook and Instagram, there’s good reason to take the approach of expanding the reach of its products instead of trying to monetize them quickly.

Adam Levy owns shares of Amazon and Facebook. The Motley Fool owns shares of and recommends Amazon, Facebook, and Pinterest. The Motley Fool has a disclosure policy.

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Winners of our first Facebook Online Hackathon announced

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Expanding on our annual Developer Circles Community Challenge and the in-person hackathons we held across North America last year, we were excited to launch our brand new Facebook Online Hackathon series for global developers earlier this month.

We know that building opportunities like hackathons are a great way for aspiring and experienced innovators to develop new skills, grow their networks and ship breakthrough solutions – whether they’re creating their first-ever coding project to showcase in a job interview, or bringing that advanced engineering idea to life.

We also know that providing special access to product resources, mentoring and trouble-shooting helps set developers up for success when applying new technologies to solve challenges. That’s why we’re committed to supporting the journey and experience of all developers on our platform.

For our first hackathon in this new series, we opened up three tech tracks for participants – Artificial Intelligence (AI), Augmented Reality (AR) and Messaging – and offered up to $21,000 in cash prizes, as well as the opportunity to join us at our annual developer conference, F8 2021.

Given the many social issues currently arising around coronavirus (COVID-19), we were also inspired to see developers ship a range of projects aimed at addressing some of the challenges being experienced as a result of this global pandemic.

Our winners

Artificial Intelligence (AI)
Creating intuitive solutions using PyTorch

First place ($3,000 + an invitation, flights and accommodation for F8 2021):
Torch Drowsiness Monitor
A drowsiness and attention monitor for driving featuring PyTorch’s Computer Vision

Second place ($2,500):
PneumoScan
A radiology tool built on PyTorch supporting the COVID-19 pandemic

Third place ($1,500):
hep-recommender
An AI-based system for recommending scientific articles

Augmented Reality (AR)
Building immersive solutions using Spark AR’s World Effects

First place ($3,000 + an invitation, flights and accommodation for F8 2021):
Rabbit Coder
An AR solution teaching programming concepts in the form of a puzzle

Second place ($2,500):
COVID-19 Coronavirus
An educational AR experience on the virus, its impact, and prevention measures

Third place ($1,500):
RollercoastAR
A gaming experience enabling users to customize and create an AR roller-coaster simulator

Messaging
Empowering conversations using Messenger

First place ($3,000 + an invitation, flights and accommodation for F8 2021):
ReWise: AI-powered revision bot
An interactive Messenger bot to help students revise their coursework

Second place ($2,500):
Sign Language Dictionary Bot
A Messenger bot enabling users to upload to sign language videos for dictionary definitions

Third place ($1,500):
MathPhysy
An online tutoring service for maths and physics delivered through Messenger

Congratulations to these inspiring innovators and thank you to everyone who participated!

New hackathons coming soon

Remember, this is just the beginning. Keep an eye out for the next online hackathon in our series by signing up for our Facebook for Developers email newsletter.

For those keen to continue building, I also wanted to let you know about another special hackathon announced yesterday.

#BuildforCOVID19 Global Online Hackathon

We’ve seen time and time again that our developer ecosystem is passionate and purposeful about leveraging technology to deliver software that builds community and solves real-world problems.

As we all consider the timely and meaningful action we can take to tackle issues related to COVID-19, there’s never been a better time for our community to ideate and innovate together.

I’d therefore like to take this opportunity to encourage as many of you as possible to join the new #BuildforCOVID19 Global Online Hackathon that is being supported by Facebook alongside other companies and platforms in the tech industry, as well as partners including the World Health Organization and the Chan Zuckerberg Biohub.

Submissions for the hackathon officially open on Thursday March 26; however you are welcome to register now to start brainstorming.

Thank you again to all of our hackathon participants around the world!

Together we can achieve more.

Facebook Developers

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Pausing Individual Verification

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In response to the coronavirus (COVID-19) outbreak, Facebook has been supporting the global public health community’s work to keep people safe and informed. We’ve announced a number of actions we’re taking to make sure everyone has access to up-to-date, accurate information, as well as steps to stop misinformation and harmful content while supporting global health experts, local governments, businesses and communities.

We also recently announced we’re temporarily sending content reviewers home. We want to make sure our platform remains a safe place for people to connect during this time, but with a reduced and remote workforce, we must make temporary changes to our operations.

As a result, we’ve paused individual verification for developers. We’ll resume verification as soon as we can. Business verification will still be available. We are continuing to monitor other impacts this may have on our processes, and we’ll provide updates as the situation evolves.

While we’re working to minimize disruptions, we anticipate that this change will cause inconvenience for our developer community. We appreciate your patience and partnership as we navigate through this unprecedented time together.

Facebook Developers

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Messenger Partners with Developers to Provide Government Health Organizations with Free Services to Respond to Coronavirus Pandemic

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Today, we’re announcing two initiatives to support government health organizations in combating the coronavirus pandemic. We’re partnering with our developer community to provide free services to government health organizations and UN health agencies to help them use Messenger to scale their response to the COVID-19 crisis. In fact, Argentina’s Ministry of Health and Ministry of Innovation is launching a Messenger experience today to provide timely and reliable information about coronavirus. We’re also creating an online hackathon and inviting developers to build messaging solutions that address challenges related to the coronavirus such as social distancing and keeping people educated and informed.

Free Developer Resources for Government Health Organizations

Communities around the world are dealing with quarantines and other disruptions to daily life because of the coronavirus outbreak. Our mission to help people connect and be closer together is more important than ever, and it’s critical we provide people with full access to the latest and most reliable information. As is common in any crisis, people are using digital channels like Messenger to stay connected and get information from trusted health authorities that are on the front lines fighting this global pandemic.

To that end, we’re launching a global program to connect government health organizations and UN health agencies with developers that can help them use Messenger most effectively to share timely and accurate information, and speed up their responses to concerned citizens. Our developer partners have offered to provide their services free of charge to these organizations during this crisis. Developers will help with things like automating responses to commonly asked questions, which can take some of the burden off of overwhelmed staff. They’ll also show these organizations how to share updates with their audience most effectively and how to seamlessly transition from automated conversations to chatting with a live person when necessary.

Today, Argentina’s Ministry of Health is launching a Messenger experience, with support from Botmaker.com, to answer questions from the public about the coronavirus, and to provide fast, reliable and official advice 24 hours a day. Organizations like UNICEF and Pakistan’s Ministry of National Health Services, Regulations & Coordination (NHSRC) are also using Messenger to ensure people have the latest information about COVID-19.

Dr. Zafar Mirza, the Special Assistant to Pakistan’s Prime Minister on Health, said, “Facebook’s support on the global coronavirus crisis will be crucial for strengthening public awareness and empowering our citizens with key health tips that will keep communities safe in Pakistan and around the world. The Messenger experience allows our Ministry to scale our support and serve citizens seeking up to date information on the coronavirus, while keeping our helpline open for more critical cases.”

Given the need to share timely information about the coronavirus is critical to keeping communities safe and informed, we are also making it possible for government health organizations and UN health agencies to proactively send important updates related to COVID-19 to people already messaging them.

Online Hackathon to Tackle COVID-19 Social Issues

We’re also partnering with hackathon provider Devpost to invite developers around the world to participate in an online hackathon leveraging the Messenger platform to build messaging solutions that address COVID-19 issues like social distancing and keeping people educated and informed.

Participants will be encouraged to build both global and local solutions and will receive unique access to Messenger-related content, including Facebook Live tutorials with product experts and a range of educational materials to support innovation. Winners will get mentoring from Facebook engineers to help make these solutions a reality. They’ll also receive invitations to attend F8 2021, including flights and accommodations, and will be given the opportunity to participate in the F8 hackathon.

Developers who are interested in participating can subscribe to the Facebook for Developers newsletter for updates.

We’re committed to leveraging our resources and Messenger’s reach, tools and technology to ensure government health organizations and UN health agencies around the world have the resources they need to share timely, accurate information on the coronavirus to keep people safe and informed.

Facebook Developers

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