Meta’s in-app e-commerce play, referred to as Facebook Shops, has been offered only in the U.S. so far, and generated $2 billion on an annual run-rate basis in the fourth quarter, according to Mizuho’s note. That’s before an international launch that is expected to accelerate growth, the analysts said in the note.

“We believe the partnership with Amazon for in-app purchase could be a major inflection point for social media to become a commerce engine, which could shift more retail media dollars onto the META platform,” the analysts said. “Based on our checks, Meta is testing its user interface to meet high requirements set by Amazon for real-time inventory availability and pricing, and payments using Prime membership.”

Meta’s Facebook social media platform had about 3 billion active monthly users worldwide as of the end of last year, according to the company’s most recent earnings presentation.

News of the partnership between Menlo Park, California-based Meta and Seattle-based Amazon first broke last November, according to a report from technology news outlet TechCrunch. 

When asked about the partnership, an Amazon spokesperson emailed a statement the company gave last year. “For the first time, customers will be able to shop Amazon’s Facebook and Instagram ads and check out with Amazon without leaving the social media apps,” the company said in the statement.

In addition to the Meta-Amazon partnership, Mizuho analysts pointed to the company’s WhatsApp messaging service, with about two billion users, as a “significant opportunity” for future revenue growth. The note pointed to India, which comprises about 30% of all WhatsApp users, as a “meaningful opportunity.”

“In India, WhatsApp’s largest market, META has partnered with PayU and Razorpay to add support for payments via cards and online banking,” the note said. “ We believe the enhanced payment support in WhatsApps’ largest userbase could boost revenue as more users shop and attract more businesses on WhatsApp.”

Meta’s efforts on partnerships for payments come after a string of failed attempts to enter the space. The company had experimented with a live shopping feature on Facebook, but shut that project down two years ago. It also tried to enter the world of cryptocurrency in 2019 with its Libra project, later referred to as a Diem Association effort, but after facing pushback from lawmakers it shut that down in 2022. Meta also tried to launch a digital wallet known as Novi in 2021, but that effort fizzled a year later.

Meta did not immediately respond to questions about its partnership with Amazon.

By James Pothen on March 20, 2024
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