Technology

During its Q2 earnings conference, Facebook says that its current focus is messaging commerce and payments

The company registered $18.7 billion in revenue, an 11% year-over-year growth - its slowest revenue growth since 2012 IPO

Facebook CEO Mark Zuckerberg Press conference at the summit G8/G20 about new technologies - Deauville, France. Photo: Shutterstock

This Thursday afternoon, Facebook reported $18.7 billion in revenue, an 11% year-over-year growth – its slowest revenue increase since its 2012 IPO, as pointed out by CNBC, but, still, positive considering the COVID-19 pandemic and the 7.9% expectation from analysts.

Above, the main numbers:

  • Total revenue: $18.7 billion – 11% YoY ($18.3 billion from advertising);
  • Total costs/expenses: $12.7 billion – 4% YoY
  • Net income: $5.128 billion – 98% YoY

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Facebook has now 3.14 billion monthly users across its family of apps (in the previous quarter this number was 2.99 billion). This metric is used to measure Facebook’s total user base across its main app, Instagram, Messenger, and WhatsApp. From this total, 198 million are in the U.S. and Canada, and 305 million in Europe.

During the conference call conducted this evening, the company’s co-founder and CEO Mark Zuckerberg said that investors, analysts, and experts, in general, should look at Facebook as a “business of serving small businesses”. He also said that the trends that are driving the company’s new products and services right now are focused on small businesses, and more specifically, on messaging commerce and payments.

Zuckerberg quickly talked about the WhatsApp usage in India, the app’s largest market, emphasizing that the company wants to explore its new products and services there, especially when it comes to messaging commerce.

READ ALSO: Pinterest, Instagram, Facebook and the challenges on what it takes to be an e-commerce platform

In June, WhatsApp Pay was launched in Brazil. The system, which was being tested in India, allows people to send and receive money using the messaging app.

The initial plan, revealed in January by Zuckerberg was to launch WhatsApp Pay in India, but the company had problems convincing the monetary authorities to allowed the launch as planned. The solution was to move on to the second most important WhatsApp market: Brazil.

Just a few days after its launch, though, WhatsApp Pay was suspended in Brazil by the country’s Central Bank and Administrative Council for Economic Defense. According to the monetary authority, the decision was taken to assess the risks involved in the new operation.

With an initial phase of the country’s instant payments new system set to begin in September, analysts think that WhatsApp Pay will also be authorized to operate in September or October, as a participant of the new system. They also expect that soon after Brazil, WhatsApp Pay will be launched also in Mexico.

Seeking to surf the wave of digital payments transformation in emerging markets, Facebook’s choice for these countries is hardly a mere coincidence: besides being leaders in WhatsApp usage, those are places with plenty of room for growth when it comes to digital payments, due to a large unbanked population and inefficiency of traditional institutions.

Sheryl Sandberg, Facebook’s COO, said that the company’s final goal is to “close the loop”, that is, enabling small businesses to make the entire commerce process within Facebook’s apps, from attracting customers to payments.

Facebook Shops features. Photo: Facebook/Courtesy.

Facebook Shops is a sign of how shopping features are gaining ground in the company. Launched in May, Shops is a free feature that allows businesses to set up a single online store, with some level of customization, for customers to access on both Facebook and Instagram. At the launch’s occasion, Zuckerberg said that Facebook has been working with partners like Shopify and BigCommerce “so that small business can easily integrate into a strong, open ecosystem of tools to help them manage their customer journey end-to-end, and it’s up to the business to decide what level of integration they want.”