Facebook is shutting down its Live Shopping features on October 1, the company announced, as investment capital is pouring into platforms dedicated to the new ecomm format. While Facebook sellers will be able to broadcast live events, they will no longer be able to create product playlists or tag products in videos as of that date. Facebook is instead routing its sellers to Reels on Facebook and Instagram.
Facebook will have some serious competition for its offerings on Reels. Live shopping platform Whatnot announced last month that it raised $260 million in a Series D financing round co-led by DST Global and CapitalG (the growth fund of Google owner Alphabet). The funding comes on top of a $150 million Series C round less than a year ago in September 2021. Yes, that’s $410 million in new capital in less than a year. The new round brings Whatnot’s valuation to $3.7 billion, up from $1.5 billion after the September 2021 raise. The company was formed in 2019.
Whatnot sales have been growing rapidly, tripling its monthly sales this year after increasing its sales by 20X in 2021.
Whatnot competitor NTWRK has also raised significant capital, announcing a $50 million round last September.
The money is flowing because investors believe that ecomm sales in America may follow trends in China, where live shopping is a $600 billion market and is doubling annually.
Independent retailers have been using Facebook Live as a selling platform since at least 2018 (see “Reach a New Customer Base on Facebook Live“), but the numbers grew as retailers across categories expanded into live selling during Covid shutdowns in 2020 and 2021, using whatever platforms were available. While Whatnot and its competitors are focusing on influencers, following trends established in China, hobby retailers were nurturing relationships with their customers by communicating with them about their curated product offerings via live (and recorded) video.
It’s unclear whether live shopping trends in North America will mirror the Chinese development pattern or take off in their own direction, but with the amounts of money flowing into the field, it seems that ecommerce is about to change dramatically.
Source: ICV2
