Marketplace idea arose from Indonesia
Activities of Facebook (FB) users in Indonesia gave the social media giant an idea for a new product: Marketplace—a consumer-to-consumer local buying and selling platform.
“Marketplace is a great example of where we saw people using our product in another part of the world that we didn’t expect and then behind that, ended up building a product about it,” said Facebook’s chief marketing officer, Gary Briggs, when he spoke at a recent technology conference organized by Wells Fargo.
Facebook saw that its users in Indonesia were buying and selling items within groups, so it decided to create a product around that activity, giving way to Marketplace.
A $165.6 billion industry
Facebook has scaled out its Marketplace service to markets such as the US (SPY), the UK (EWU), Australia, and New Zealand. Marketplace allows Facebook gain a foothold in the social commerce industry, which research firm TechNavio predicts could be worth $165.6 billion by 2021.
According to business intelligence firm eMarketer, Facebook accounts for the vast majority of US social commerce purchases. In an October 2017 study, 47.7% of respondents said they made their most recent purchase from Facebook, compared with 8.6% of respondents citing Instagram and 4.5% of respondents citing Alphabet’s (GOOGL) YouTube.
Facebook carefully scaling Marketplace
Briggs noted that the company has been slow to grow Marketplace, which doesn’t point to a weakness but careful execution to ensure that users have a great experience with the service.