Is Social Shopping the Next Big Thing? Venture Capitalists Think So.
Posted by Nick O'Neill on January 30th, 2008 10:11 AMCaroline McCarthy has posted a couple articles over the past week about a number of social shopping sites that have raised new rounds of funding. As McCarthy wrote, StyleFeeder raised $2 million and then today ThisNext raised $5 million in a second round of financing from Anthem Venture Partners and Clearstone Venture Partners. This news emphasizes the increasing popularity of social shopping with venture capitalists and rising expectations of a future social shopping boom.
We have previously covered at least two social shopping sites and a search in Google for “social shopping” yields a wide array of competing sites vying for a piece of the pie. I would argue that most of these sites are going to crash and burn because they are missing one key component: sizable communities. A few of the sites, including ThisNext have attracted a relatively large audience but I would argue that they aren’t large enough to compete with the mainstream social networks that will eventually enter the social shopping space.
Facebook has clearly stated their intent to get involved with the social shopping market by providing developers access to their existing payment system: wallet. Once Facebook extends their payment system API to developers we are going to witness a massive spike in social shopping activity. Ultimately Facebook Beacon was the beginning of the site’s push to conquer the social shopping space which unfortunately for Facebook, resulted in a P.R. disaster rather than a technological revolution.
Over the next 12 to 24 months I would expect competition to heat up in this space as Facebook (and eventually MySpace and other social networks) begin to open their platforms and integrate e-commerce features. Do you think social shopping is the next big thing? Do you even know what social shopping is?
January 30th, 2008 at 12:39 pm
Thanks for providing that link!
Yes, I would agree with you. Social shopping will probably take off sometime in mid 2008. Especially amongst teens and amongst women.
The foundation of it will have to be organic though. No intrusive concepts like Beacon.
You nailed it.
February 9th, 2008 at 4:12 am
Well social shopping has come forward with the promise of a satisfactory alternative to brick and mortar shopping. Though it has taken up speed but according to the latest researches there is a lot more to look forward to. I mean it has been seen that a negligible percentage of Internet users go for shopping and a more less population wants to repeat the experience of online shopping.
I can think of some of the reasons though. Well, to start off with, most of the shopping portals have the problem with earning trust if the users. Most of the users are not sure weather their demand would be properly met by the portals or if they would get the product they ordered for in the right time and right place. The mode of shipment is one another big issue that has posed a problem in this respect. I mean their aren’t many options for shipping and most of the portals charge a high sum for shipping. This is the reason why e-commerce is yet to gain momentum in Asia and most of the American sites are not doing good in the Asian
continent.
Then comes the cluttered layout of the portals…one can hardly find out the desired things. I mean c’mon there has to some way. And what can it be…? .. Let me know…
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What do you