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Facebook buys customer service startup Kustomer, aiding its social commerce play

  • Facebook is acquiring customer service startup Kustomer.
  • And this acquisition could provide businesses with more data and help build consumer confidence as social commerce slowly gains traction.
  • Insider Intelligence analyzes this industry and several others to provide in-depth analyst reports, proprietary forecasts, customizable charts, and more. Learn more about what we offer.

On Monday, Facebook announced it would buy Kustomer, a customer relationship management (CRM) startup that will provide services to businesses that use Messenger and WhatsApp for communication with customers.

A mockup shared by Facebook of the Facebook Shops feature.FB

While Facebook has been pushing heavily into social commerce over the past few months, its investments thus far have generally been centered around improving discoverability and adding new features to Shops on Facebook and Instagram. The Kustomer acquisition, meanwhile, focuses less on the public-facing Shops and more on private communication.

There are two reasons the focus on customer service may be beneficial for Facebook's push into social commerce:

  • Building consumer confidence for those who aren't ready to shop on social media yet. Only 35% of US online shoppers had used social media to shop as of October, per a Bizrate Insights survey conducted for eMarketer. Though that's up from the 27% who said the same in April, it still shows that the majority of consumers aren't ready to complete the entire purchase process on a social media platform, even if they regularly shop online. Engaging with a business via a social messaging platform could be a soft introduction into social commerce for those who may not have otherwise considered it. For example, a business that's integrated with Facebook Shops could answer a customer's questions on Facebook Messenger and then link directly to a product.
  • Accessing consumer data that goes beyond Facebook's owned and operated properties. Kustomer will allow businesses using Facebook to track customers across different channels, including WhatsApp or Messenger, email, and a company's website. For example, a business that receives a message from a customer on WhatsApp could see that the customer completed a return on its website a month ago. For businesses considering setting up shop on Facebook, the ability to track their customers' communications even outside of the platform could be a useful selling point.

But the deal could add to the antitrust scrutiny that Facebook is already battling. Facebook's acquisition of Giphy earlier this year—which it also tried to integrate with its messaging services—prompted an investigation from UK regulators that caused Facebook to pause the integration.

And in the US, federal and state authorities are only days away from filing a suit against Facebook, The Wall Street Journal reported on Monday. Though those government actions aren't related to the platform's ecommerce ambitions, the social media giant's continued acquisitions could draw further ire from antitrust watchdogs.

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