By CultureBanx Team
43% of black adults are on Instagram
African American possess $1.2T in spending power
Facebook’s (FB +0.58%) popular Instagram app is vying for the outsized spending power African Americans possess. The picture first platform is working to develop a standalone “IG Shopping” app, it would allow users to browse and purchase goods, according to The Verge.
Why This Matters: A recent Pew study found Black adults are the biggest user group on Instagram at 43%, followed by hispanics at 38% and 32% of white people. By creating a separate app dedicated to shopping, Instagram would open up a new revenue stream for Facebook. Their largest active users have $1.2 trillion in spending power, according to Nielsen.
Eventually Instagram may even be able to challenge e-commerce competitors like Amazon (AMZN -0.38%) and Shopify, if Facebook creates more paid merchant business tools. Facebook COO Sheryl Sandberg stated on their Q2 earnings call that more than 25 million businesses already have Instagram accounts, and 2 million of them are advertisers. At least 80% of Instagram users already following one business account.
Independent designers have built cult like followings on IG, with the influencers who help push their products out to the masses. Digital research firm Avionos noted 55% of today’s consumers have purchased something via social media.
What’s Next: If you’re eager to begin shopping on Instagram, the app is currently testing a feature that lets users shop from IG Stories. It’s unclear when the stand alone shopping app is going to launch. Another possibility out there is that the app never even makes it to beta testing and gets cancelled.
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