Seeking to tap its e-commerce potential, world's most popular social networking site Facebook rolled out a new service, "Gifts" on Thursday.
The new service will allow the 955 million active users on Facebook to deliver real gifts to each other, cutting down the amount of time spent on gift selection. Users just need to click the new "gifts" icon on the Facebook page to view the presents they would like to send to loved ones.
The service was initially launched in some parts of the US and will be made available to the whole country once it picks up speed.
"Today people use Facebook to talk about and share sentiments about important life moments - a birthday, a baby, an anniversary. And we think this is a great extension of how people can celebrate those moments on Facebook," Lee Linden, the product manager of Facebook Gifts, told ABC News. "We built an end-to-end gifting service; you never have to leave Facebook to send a gift."
The launch of the new service marked Facebook's long-delayed entry into e-commerce and followed the acquisition of Karma, a San-Francisco based startup which creates gifting applications.
Facebook had previously tried its hand in gift-giving services before, but this is the first time it came up with the service that would send real presents, giving rise to new competition with other tech giants like Amazon and EBay.
According to LA Times, Susquehanna Financial Group analyst Herman Leung estimated that the Facebook Gifts could generate up to $872 million revenue per year by 2014.
How does 'Gift' work?
The number one social networking site has come up with several tie-ups to offer a wide range of product to its users. Starbucks, Uber cabs, Warby Parker glasses are among Facebook's 100 retail partners that users can choose their gifts from.
"We partner with companies, curate the companies' gifts, and we put their product in front of people on Facebook. As part of that we take a percentage of each transaction," Linden told ABC News.
The "gifts" icon is placed in the "Birthdays and Life Events" section on the right side of the user's homepage.
After choosing the specific gift, the user will get an option to attach a personalised message to it. Users also have the option to send the message as private or on the wall of the recipient and can choose to pay for the gifts immediately or right before shipping.
The recipient will get a notification message asking to inout shipping address details. Following the receipt of the notification, the recipient can unwrap the gift to see what is inside. If the gift is not of one's liking, the recipient can swap the gift with another item of the same price range.