On Dec. 11, Adam Mosseri, CEO of Facebook’s photo and video sharing service Instagram, declared that the short video app TikTok (ShakeYin overseas) is the company’s strongest competitor ever.
In response to the fast-growing TikTok, Instagram announced on Thursday, local time in the U.S., that the company will combine its two top priorities, online shopping and Reels short-video feature. Now, merchants and creators can tag products in their Reels videos, and consumers can click “view product” to buy it immediately or save it for later.
The purpose of incorporating shopping features into videos is to make Reels more attractive to consumers and creators, and also to increase the effectiveness of ads by allowing consumers to buy the advertised products immediately, which in turn allows Facebook to charge more for those products. In the long run, this could also lead to a new source of e-commerce revenue for Facebook, which will eventually collect commissions from each transaction.
Morselli is convinced that Instagram has a huge long-term opportunity in shopping over the next five to 10 years, although it is much more complicated than its traditional advertising business.
In response to the antitrust lawsuit filed by the Federal Trade Commission (FTC) and a coalition of 48 state attorneys general against parent company Facebook, Mosseri believes TikTok can be used as a rebuttal to the argument that “Facebook is suppressing the view of its competitors.
He said, “TikTok is an incredibly strong competitor, if not the strongest competitor we’ve ever seen. They’ve always been focused, determined, and executed really well. We’re trying to catch up in a lot of ways and build complete experiences for creators to inspire them to use our platform more, because without engaging content, there’s no reason for them to go to Reels in the first place.”
Mosseri also mentioned a possible outcome of the lawsuit, which would force Facebook to divest itself of Instagram, which Facebook acquired for $1 billion in 2012.
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