Whether e-commerce will flourish on Facebook is a moot point. It’s already happening. By some accounts, Facebook users already have well over $3 billion worth of merchandise available for purchase.
So with the Facebook user base nearing 650 million, Facebook Credits gaining traction as a virtual currency, and everyone from Warner Brothers, to JC Penney, to Brooks Brothers setting up shop, 2011 appears to be the year that social commerce reaches the tipping point.
Social Times Pro dug into the data behind the hype to give subscribers a first look into this emerging market for retailers of all sizes. Research yielded the following trends:
Social commerce is inclusive of Facebook storefronts, but the larger revenue opportunity extends beyond the social network to retailers’ own sites, mobile devices, as well as startups launching new content and commerce platforms.
Facebook sales represent less than 10 percent of monthly revenue for a majority of retailers currently operating storefronts on the platform. There are still significant risks and barriers that will prevent that percentage from reaching double-digits within the next 12 months.
Industry experts suggest that the volume of transactions for physical goods on Facebook will top $250 million in 2011.
Projections for retail revenue generated from Facebook commerce in 2011 are closer to the $75 million to $100 million range.
The most bullish estimates of 2011 consumer spending on physical goods on Facebook go as high as $1.2 billion.
The writer of this post, Tameka Kee, is an analyst for Social Times Pro.