Apple's Fancy e-commerce could trump Facebook's

Buying up social e-commerce site The Fancy may prove to be a good bet for Apple.
Written by Spandas Lui, Contributor on

If Apple expanded its e-commerce footprint by acquiring New York-based company, The Fancy, it would have much more success at e-commerce than Facebook has had, according to analyst firm Telsyte.

Business Insider reported that Apple is currently in talks to buy the social e-commerce website The Fancy, although Apple Australia declined to comment on the report.

Similar to Pinterest, The Fancy helps users make wish-lists of things, but The Fancy also enables users to buy some of the items able to be purchased through its site. The site, which is backed by co-founders of Facebook and Twitter, takes a 10 per cent cut from purchases.

The objective for Apple could be to market more products to its user base, beyond just applications and accessories, through its iTunes and Apple stores.

Apple wouldn't be the only technology company diving into e-commerce. Facebook facilitates retailers to set up shopfronts on its social media website, for example. But even with hundreds of millions of users worldwide, 'F-commerce' has yet to yield encouraging results.

Telsyte research director Foad Fadaghi saw Facebook and Apple as two very different animals. While Facebook had a strong and growing user base, its average revenue per user (ARPU) is much lower than Apple's.

"Social networks, themselves, try to monetise their user base, but I think it's interesting if Apple starts dabbling there, as well," Fadaghi told ZDNet. "People are used to spending money with Apple, and not so much on Facebook."

"Facebook is a social platform for interacting with family and friends, not somewhere you'd think off the top of your head to go purchase something from; and that is one of the biggest differences."

But even so, users of iTunes and Apple's App Store are more familiar with micro purchases that can be less than a dollar. Will they be comfortable with making bigger purchases through the same route?

To Fadaghi, the jump from micro to macro purchases is not difficult. After all, that loyal user base may already be forking out money for expensive Apple hardware and accessories.

"Utilising that high density and billing relationships that Apple has, to sell you other products and services, is potentially quite powerful," Fadaghi said.

With just 20 staff under its wing, The Fancy is significantly smaller than its rival, Pinterest. But Fadaghi believes it might be a worthwhile bet, especially since tiny e-commerce sites can grow very fast. The Fancy may be on the cusp of becoming insanely popular. If not, it might have something worthwhile that Apple can exploit, develop and turn it into something profitable.

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