Ok the moment has arrived - Instagram has launched native in app e-commerce functionality. We have discussed this before and I see this as a negative others the inverse.
The announcement has mixed messages. On one hand it says Kylie cosmetics is one of the participants (a leading Shopify plus customer) on the other it says they will allow e-commerce platforms like Shopify to link to it.
Need to work out whether this is more opportunity or threat.
Already has one analyst RBC warning a concern today.
Clearly Shopify payments will take a hit. But merchants would still need Shopify for all other back office needs including shipping etc. So, net is a small hit for Shopify, limited to payments as far I can see. Also, note that Instagram payments will be processed by paypal. Looks like Square missed out there…
The announcement has mixed messages. On one hand it says Kylie cosmetics is one of the participants (a leading Shopify plus customer) on the other it says they will allow e-commerce platforms like Shopify to link to it.
Need to work out whether this is more opportunity or threat.
I suppose it depends on how the order is passed from Instagram to the merchant? Assuming Shopify is not just a pretty face (website) then wouldn’t the order pass from Instagram to Kylies e-commerce platform to be processed? Of perhaps it bypasses the e-commerce platform and directly to their ERP. Is there any requirement from those merchants on which backend platforms they run?
Will try to understand what is different then doing it directly through Shopify vs signing up directly with Instagram which seems to do something similar (in my 2 mins of reading before work)