Facebook Gifts Tip of the Social Gifting Iceberg This Holiday Season

Facebook’s entry into social commerce with its new Gifts feature has been highly touted, but is just the tip of the social gifting iceberg.

According to MediaPost, this holiday season not only is the social network pitting itself against retail giants such as Amazon, eBay and Walmart (via its Shopycat app), but against a host of startups like Wrapp and Gyft. Wrapp allows users to give gift cards to their Facebook friends, while Gyft offers a mobile app that enables users to send gift cards through Facebook, email or text.

The question is, will Zuckerberg and company be content to remain just the tip?

“Facebook Gifts has a chance to take a healthy bite out of Amazon’s wallet,” said Yariv Dror, CEO of Facebook store platform provider Storeya, who credits the under $50 price limit imposed by Facebook as a key factor. “Fifty dollar deals sound like a small portion of the e-commerce market,” said Dror, “but our numbers show that 57 perent of the millions of products that have been imported into Facebook using our platform match this figure of $50 and below.”

Dror suggests that the low price point would allow network users to “test the water” without incurring too much risk, which, for Facebook, could result in a positive outcome. “Without irritating large online commerce companies like Amazon and eBay, Facebook is actually taking a nice bite from their market, and considering its annual $1B profits from ads, this is certainly a market it needs to be in,” Dror added.

Others, such as Wired senior editor Ryan Tate, view Facebook’s move into social commerce as comparatively benign. “The launch of Facebook Gifts is modest: Facebook is emphasizing sub-$50 products like socks, cupcakes, teddy bears, and Starbucks gift cards,” said Tate.

But, with 1 billion users and counting, is anything that Facebook does benign? Even though Gifts puts Facebook on the very edge of a territory where Amazon reigns as king, will Zuckerberg be content to stay there? To further quote Tate: “If anyone is better positioned than Amazon to recommend products to people, it’s Facebook, and the company is off to an auspicious start. It’s a small start, but then so was Facebook itself.”

Is Gifts a shot across Amazon’s bow? Is Facebook testing the social commerce waters, and do you expect more to come? It’s anyone’s guess, but I would like to hear your viewpoint, so please leave a comment.

(UPDATE: No sooner did I write this post than Facebook announced the launch of a new e-commerce feature called Collections, which it is testing with a few select brands. All Facebook reports that Collections enables Facebook users to not only like, but collect, want, or buy products that brands share through images on the social network.

If Gifts is Facebook’s way of treading on Amazon’s turf, then Collections is certainly the network’s way of doing something similar with Pinterest. So, in answer to my question, “Do you expect more to come?,” I guess the answer is resoundingly yes. What’s next?!)

[hr] Today’s article is sponsored by Payvment: The #1 Social Commerce Platform
Written by
Paul Chaney
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  • It’s definitely an interesting space to be in. I started doing some research this summer and while I saw a lot of competition, nobody is quite doing it just right thus far. I’m planning to launch my own gift website soon that will focus on providing customized recommendations and working for friends that don’t even use Facebook at all.

    • Thanks for the comment. I’d be interested to know your thoughts on what these others are doing wrong. And, do let us know when you get the site up and running Brett.

  • It is interesting to see how Facebook has integrated Karma into its offering and time will tell how successful it becomes, but clearly it’s not the end point since there are some major drawbacks.

    1. It’s Costly. The Karma model, which Facebook has adopted, is to offer expensive products from a limited selection…you still have to pay shipping and handling. The costs add up quickly!
    2. It’s Not Social. There’s no option for a group to contribute to an individual gift, which means I have to pay the full amount. For close friends and family, I might spend $30 or more….but not on all my Facebook friends.
    3. It’s Limited. Granted I can choose a gift from their catalog….and the receiver can change it. They may be trading just to get something better, but it doesn’t mean that’s what they really want…just better than what you selected.
    4. It’s Facebook only. What if I have friends on LinkedIn, Google+, or even people who don’t use Facebook (yes, there are some)?

    If you want a truly inexpensive, social, and cross platform gifting solution that lets the recipient get exactly what they want, then check out http://www.zPerfectGift.com. You can chip in as little as $5 towards any gift….invite friends and make it a group gift. The recipient transfers the funds onto a gift card of their choice and buys exactly what they want. It’s completely free too and works across Facebook, LinkedIn, Google+ or with any email address. A much, much better gifting solution!

  • Great article Paul. I feel Facebook can monetize that leverage point by engaging with eCommerce on their platform, specifically with gifts, but only if it addressed the core need of the social gift buyer. I would say that in order to nail the social gifting element on Facebook, there will need to be social interaction amongst friends while buying the gift – this will match more closely the comparison of the gifting potential to social games being played on Facebook.

  • Because the world are prefering at stily amazon and the gifts are totalmently came back for stily sport will be that a news model diferent of the time pasting to hot model where will go with this history with this sumer eath once more hot and apereance that no there is nothing at done them the business is biribol in the heart and in the alm or spirit.

Written by Paul Chaney