Pinterest, one of the most widely utilized photos sharing platforms for content creators, artists, and casual users, has filed its S-1 form to conduct an initial public offering (IPO). In its post-IPO era,
Pinterest is reportedly planning to expand into the e-commerce market, competing against the likes of Instagram, Amazon, and Walmart.
Depending on the success of its initiative to create an e-commerce-enabled platform, Pinterest may be able to secure a new source of revenue it is yet to touch upon.
“We are in the early stages of our monetization efforts, and there is no assurance we will be able to scale our business for future growth,” the company stated.
In 2017, the company was valued at $12.3 billion. Since then, the revenue of Pinterest has increased by $482.8 million to $755.9 million, securing a user base of 265 million last year.
Earlier this week, Instagram integrated a new feature into its platform for users in the U.S., allowing users to purchase products directly from the app.
Through machine learning, Instagram detects products featured in photos uploaded by users on the platform, simplifying the process of users in searching and purchasing the products.
“From a consumer perspective, we’re out to build a complete shopping experience,” Vishal Shah, Instagram’s head of product, said.
According to Michael Kors social media director Linz Shelton, ever since the inception of Instagram, users have been using the platform to discover and purchase products such as clothes and other fashion-related items.
“Allowing for direct purchases is a natural extension of how the social-media platform has been used. Since Instagram came out, people have been using it as a shopping platform whether it was conceived in that way or not,” Shelton added.
Analysts have suggested that the introduction of Instagram’s new feature would provide an additional source of revenue for the social media giant, increasing the stability and sustainability of the company.
Pinterest is eyeing a similar result with a similar strategy and it is in an ideal position to appeal to users as an e-commerce platform due to the popularity of the platform amongst users interested in fashion and design.
From food to furniture, as shown in Pinterest’s top 100 interests in 2019, the topics users have shown interest towards throughout the past year have been truly diverse.
Hence, Pinterest may be able to sufficiently differentiate its business model from Instagram by pivoting to an e-commerce feature for a wide range of products in areas including food, interior design, fashion, and many others.
In the near-term, Instagram is said to be focusing on clothing products and working with companies like Nike.
Amazon has diversified its revenues across a variety of services including Prime, Amazon Web Services, and daily grocery delivery.
Many companies in both the technology and retail market are betting big on machine learning and artificial intelligence to compete against Amazon and acquire some of the market share in the e-commerce sector.
While it remains uncertain whether the demand for online shopping on social media platforms could rise to an extent in which it begins to affect online sales of Amazon, Pinterest and Instagram are both eyeing to secure a niche market that is certainly scalable in the months to come.
Last modified: September 23, 2020 12:36 PM