What’s Facebook Inc (FB)’s Future in the World of E-Commerce?

Facebook Inc (NASDAQ:FB) tested its buy-button in July this year in an attempt to even further increase the company’s revenues. The popularity of this strategy has led Twitter Inc (NYSE:TWTR),  which has been beleagured by a falling stock price of about 20% for this year, to try its own version of the buy-button.  Evan Niu, who is a Contributing Technology Analyst at Motley Fool, discussed on CNBC the prospects of e-commerce for these companies.

“[…] Generally speaking, there is this whole idea of social commerce, which, I think, in the US is very underdeveloped and I think that in that sense it’s a big opportunity for these companies to really  explore the social aspect of e-commerce, whereas in markets like China social commerce is much farther along […],” said Niu.

Facebook Inc (NASDAQ:FB) which has recently hit 100 million users for Africa alone accounts for about 8.1% of the global digital sales. Although Africa might be low on the monetary aspect as compared to the Western market, but it is very mobile centric with about 80% of these Facebook users accessing the website through their mobile devices. Facebook Inc (NASDAQ:FB) only has to apply the same business model in a different continent to fatten its top line.

Niu also commented on the possible effects that the Alibaba IPO, which is the world’s biggest liquidity event of sorts being valued at around $20.1 billion, could have on Facebook. He explained that as Facebook Inc (NASDAQ:FB)’s business model is sound, the company doesn’t have to care too much about short term fluctuations in its stock price, since as the term suggests they will only be ‘short-term’.

These fluctuations are very much in the picture as Facebook Inc (NASDAQ:FB)’s price is at an all time high and with the hype that Alibaba’s IPO has received, there are certainly going to be stock rotations.

Disclosure: none