- Shopping on Instagram is going to be huge, but it has barely gotten started.
- Just 12% of users currently use the Facebook-owned photo-sharing app for finding or shopping for products, according to new research from Cowen.
- By 2021, Instagram is predicted to generate $10 billion a year in new revenue from shopping.
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Shopping on Instagram promises to be the next big money-making hit for the Facebook-owned photo-sharing app - but it still has a long way to go.
New research from financial services firm Cowen found that just 12% of Instagram users currently use the app for shopping purposes - far behind better-established rivals in the space like Pinterest, with 45%.
The data illustrates the opportunity - and challenge - ahead of Facebook, as it attempts to diversify away from its core advertising business and to muscle in on the ecommerce space.
Instagram has been adding a bevvy of new features dedicated to helping users shop, including tags that highlight product costs and link out to websites to buy them, as well as an integrated checkout feature that allows users to buy goods without ever leaving the app. It has also become home to a new generation of direct-to-consumer brands that are sidestepping intermediary retailers and marketing directly to consumers via its traditional advertising tools.
Despite this push, only a little over one-in-ten Instagram users surveyed by Cowen said that they used the platform for finding or shopping for products, with the overwhelming majority - unsurprisingly - highlighting the app's photo-sharing functionality. (Cowen surveyed 2,500 US consumers for its Q4 2019 survey.)
Nearly half (45%) of Pinterest users, meanwhile, highlighted that social network's potential for finding and shopping for products - demonstrating that large numbers of users can become interested in shopping via social platforms, an encouraging sign for Instagram.
Analysts are, by and large, extremely bullish on Facebook's ecommerce prospects. Deutsche Bank estimates that by 2021, shopping on Instagram could generate $10 billion a year in new revenue for the company. A survey it conducted in 2019 found that "43% of survey respondents said they were either 'very likely' (18%) or 'somewhat likely' (25%) to purchase products on Instagram using the new checkout feature" - indicating a high level of general interest from users in shopping on Instagram.
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