Is Facebook’s Marketplace a threat to local e‑commerce players?

If you use the Facebook app often enough, you may have noticed the new icon flanked the friend request and notifications buttons. The social media behemoth on January 23 announced that the Philippines was already among the 47 countries where this feature—Marketplace—is enabled.

Marketplace allows users to buy and sell items directly through their Facebook account, and filter through products that are near their location. It was launched in October 2016, but was only made available in U.S., U.K., Australia, and New Zealand.

In a country like the Philippines—which takes the global lead in time spent on social media according to the report Digital in 2017 with an average of 4 hours and 17 minutes per day on social media sites like Facebook, Snapchat an Twitter—this could mean that users will now buy items without leaving the app, avoiding sites that are dedicated to e‑commerce.

The local e‑commerce industry is putting up a brave face in the anticipated fight to retain traction, as Facebook unveils the service, at the same time taking it as a “positive development.”

“[With] 97% of [Filipinos] online being in Facebook, this will allow the Philippine market [to be] more aware of alternative options for online shopping, and make them (market) more familiar [with] how online shopping works,” Mark Joseph Panganiban, executive director of the Digital Commerce Association of the Philippines (DCOM), told SparkUp in an email.

DCOM is a private non‑stock, non‑profit organization whose founders and members include the top e‑commerce players in the country such as Shopinas, Sulit.ph, Multiply, Ensogo, and CashCashPinoy.

Panganiban said existing e‑commerce platforms does not see Marketplace as a threat as they “already had it coming.”

“Understanding the varying business models and setups, each platform/provider has their own unique online selling and/or value‑proposition to its users,” he said.

Marketplace, he added, could actually help grow the industry “as user experience in the Philippines mature and develop.”

“You cannot discount the popularity of Facebook, especially in the Philippines. Facebook has the mass market, the tools in identifying potential customers, and touch‑points among customers and brands/businesses.”

Raising the game

While Marketplace may affect e‑commerce platforms selling their own products, the direct blow is seen to go towards online classified platforms that share the same business model of generating tractions from outsourced listings.

Singapore‑based Carousell, for one, does not see Facebook’s Marketplace as a threat.

A relatively new player that entered the Philippines in 2016, Carousell already boasts of having 4.1. million listings at present.

“At Carousell, we’ve been anticipating the Marketplace launch in the region for some time,” a spokesperson of the company said in an email. “We look forward to see how it grows around the world and in the markets that we operate in.”

To remain in the game, the company is currently looking into new features powered by new technologies like machine learning and blockchain technology, all aimed at “[improving] the overall classifieds experience” in the platform.

The initiative came after the company launch artificial intelligence (AI)‑enabled features last year, including Smart Listings, which make all information about items sold in the platform more organized and easy to be searched. The AI feature using data also allows the company to know what users buying under each categories will most likely search for.

“To make the buying and selling process even simpler and safer, we are now exploring how we can make deal arrangements even more frictionless for our users by taking away the hassle of arranging for transactions to take place safely and efficiently.”

Consumer protection

Facebook has yet to implement a systemized way of filtering through the posted products in Marketplace—one thing that existing platforms like OLX Philippines and Carousell already have, with the former forming an anti‑fraud team that checks all sellers and items posted on the website in 2015.

Instead of the competition that Marketplace’s presence may cause to the industry, Panganiban said the limelight should be on the implementation of regulations and protection of consumer rights.

He said government institutions such as the Department of Trade and Industry, Philippines National Police, or National Bureau of Investigation’s Cybercrime Division must come up with “creative and user‑friendly way” of resolving disputes that users may experience in using the platform.

“It’s an interesting times for the government and the industry. Hopefully, we [can] continually catch up with regulation while improving the overall e‑commerce ecosystem,” he said.