Stock Analysis & Ideas

Facebook Launches Live Shopping to Attract Small Businesses

With the growth of the creator economy, Meta Platforms, Inc. (FB) is taking strategic steps to better monetize its userbase while supporting small businesses, making the most of favorable macroeconomic trends.

On October 11, the company announced its decision to host daily live shopping experiences on Facebook and Instagram. Live Shopping Events will be the next big step in the company’s efforts to penetrate the fast-growing E-commerce industry.

I am bullish on the prospects of Meta Platforms, as I believe the company’s focus on the Metaverse and the booming online shopping industry will fuel earnings growth going forward. (See Analysts’ Top Stocks on TipRanks)

Facebook Is Positioning Itself as a Top Choice for Small Businesses

Facebook is launching E-commerce-focused events, including live shopping and BuyBlack initiatives to encourage the use of Facebook and Instagram shops.

The company first launched live shopping in May to provide real-time engagement between buyers and sellers, which is likely to result in increased spending. TikTok tested this strategy successfully with the launch of live shopping in collaboration with Walmart, Inc. (WMT) in December 2020.

Live shopping events kicked off November 1 on both Facebook and Instagram. It included brands like Benefit Cosmetics, Cocokind, Macy’s, Paintbox Nails, Tanya Taylor, Ulta Beauty, Vuori, and Walmart that educated shoppers and provided exclusive deals.

In addition, Facebook is offering a discount program that includes gifts and free shipping for buyers who purchase directly through its apps. The company intends to provide additional support to Black-owned businesses with the launch of the BuyBlackFriday show.

The BuyBlackFriday show commenced on November 5 and will run every Friday in November. Live Shopping segments from Black-owned businesses such as Shaquanda’s Hot Pepper Sauce, House of Takura, and Obia Naturals will be featured on the show. Users can check out the BuyBlack collection, which will be available weekly.

According to a Facebook survey, women-owned businesses and under-represented communities were severely affected by the pandemic. The company continues to launch additional programs, tools, and resources to assist small businesses, including the launch of a program called Boost with Facebook: The Good Ideas Season.

The company is focused on providing small companies with free resources and training to help them succeed during the holiday season. Facebook is also opening Good Ideas Shops in local areas across the U.S. as part of the Good Ideas Season.

Additionally, Facebook is enhancing its Marketplace with new tools to ensure the safety of both buyers and sellers, such as improved processes for scheduling meetups. The additional tools also include a new saved search option that will notify users when new listings that match their search criteria become available.

Facebook has more than 200 million businesses using the platform every month to create virtual storefronts and connect with customers. The new initiatives introduced by the company are aimed at helping businesses efficiently launch their products and services. It also helps them with community building and tailored programs to guide business owners on how to grow and survive in a competitive market.

These initiatives are likely to attract many new businesses to Facebook’s platform in the coming years. In addition, they will help the company report stellar earnings growth as businesses are likely to spend aggressively on marketing their products and services.

Macroeconomic Tailwinds

The Global Social Commerce Industry was valued at $475 billion in 2020 and is expected to grow at a stellar compound annual growth rate of 28.4% through 2028 to become a multi-trillion-dollar industry.

The increasing time spent on social media, coupled with the expansive tools introduced by social media companies to connect buyers with sellers and to process payments, is expected to drive this industry forward. The use of the latest technologies such as artificial intelligence, machine learning, and virtual reality will also play a key role in the growth of this industry.

Facebook, as the world’s leading social media platform with over 2.9 billion monthly active users, is well-positioned to benefit from this favorable industry outlook.

Wall Street’s Take

Turning to Wall Street, Meta Platforms has a Strong Buy consensus rating, based on 29 Buys, six Holds, and one Sell assigned in the past three months. Based on 36 Wall Street analysts offering 12-month price targets for Meta Platforms stock, the average price target comes to $405.59, which implies an upside of 22.3% from the current market price.

The recent decline in stock price has widened the margin of safety for those looking to invest in Meta Platforms.


Facebook’s Marketplace is evolving, and the holiday season appears to be an opportune time for the company to launch and test its latest tools, which is exactly what the company is doing. Despite the regulatory risks faced by the company, Meta Platforms is likely to reward long-term shareholders handsomely.

Disclosure: At the time of publication, Dilantha De Silva had an ownership stake in Meta Platforms.

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