Facebook and eBay Partnership. Why it is Important?

Lately I have put quite reasonable amount of focus on Facebook and its developments. And it is definitely worthwhile – not only due to the fact that it is by far the biggest social network in the world by monthly active users (MAUs), but also since it has a lot of potential to become the most important commercial market in the world. Here we should note the phenomenon of seamless experience, where one could basically satisfy all his/her everyday needs within single app/network without even noticing it.

Facebook has a potential to become the most important commercial market in the world.

eBay, the e-commerce pioneer and giant, has realised that and thus it has launched a chatbot shopping assistant on Facebook Messenger. Called ShopBot, it is powered by the artificial intelligence (AI) that gathers information from questions it asks and users’ Facebook profiles. The idea here is obviously to help customers find more relevant items and hence drive up the conversion rates.

Why Messenger?

As seen from the graph above, popularity of Facebook Messenger has been growing steadily and at the moment it has more than 1 billion MAUs, which is a lot. Hence, partnering up with Facebook is an opportunity for eBay to unlock a huge pool of new customers.

Partnering with Facebook, eBay has an opportunity to unlock a huge pool of new customers.

As eBay declares, shopping bots can assist at times when consumers’ needs are not fully met by the conventional search engines, and can fill in the gaps where human specialists are not available.

However, as optimistic as it may sound, the true application of chatbots is questionable at best. At least for now. It might be good to chat with a slightly smarter machine, but the true conversation is still missing. Also, the effectiveness and efficiency of chatbots is rather uncertain, and in some cases it might be more simple and easier to search for stuff in the shopping websites yourself or just use Google. From the personal perspective, when chatting with bots, you definitely feel the AI behind of it, and for me, it is like a more advanced version of Google. Moreover, at the moment bots are rather limited and have a standardised scope, so no of your specific needs will be heard.

Messenger bots – to refresh the business?

As seen from the displayed data, eBay sold about $20 billion worth of merchandise during 2Q16. On year-over-year basis (YoY), it is 4% growth. Nevertheless, looking at the 2015, the e-commerce marketplace saw a 2% YoY drop during each of the first three quarters and plane growth in gross merchandise volume (GMV) during 4Q. To add, the company’s active buyer growth rate has been on a steady decline since 2Q14. Hence, incorporating the AI technology, eBay expects to level the playing field between its rivals and boost the business. Finally, the fact that it the mean time eBay has acquired SalesPredict, ExpertMaker and Corrigon (which are all related to AI) only strengthens this argument.

All in all, as for now I would not expect to see integration with Facebook driving higher revenues or GMV for eBay. However, it is definitely a fair and understandable move, which has the underlying potential. As chatbots will get better and the conversations will become more real, we may see some major shifts happening, which will only strengthen Facebook’s position and role in the global (e-)commerce.