YouTube may soon allow creators and other users to sell their merchandise and other products directly on the platform. YouTube has begun testing tools for channel creators to tag various products featured in their videos in a bid to sell them directly through the video-sharing platform, according to a Bloomberg report. The report notes that the move aims to “convert YouTube’s bounty of videos into a vast catalogue of items that viewers can peruse, click on and buy directly." Further, YouTube is reportedly testing integration with Shopify to achieve this goal.
Speaking on the development, a company official told the publication that creators would have full “control" over the products that they are planning to sell. The move could potentially pose threats to leading e-commerce giants like Amazon and Alibaba as YouTube has over 2 billion users. However, the development appears to be in its early stages, and the company official described the move “as an experiment." It is possible that the shopping experience on YouTube could be limited to premium users at first and later reach regular users. At the moment, it is also unclear how YouTube will generate revenue from these sales directly from the platform.
But it is likely that YouTube would introduce a cut from these in-app purchases, similar to Google’s next plan on levying 30 percent fee from in-app purchases on Android devices. Currently, YouTube revenue largely comes from ads; however, the new feature would allow the company to generate extra bucks. The company generated $3.81 billion from advertising alone in the last quarter, as per Alphabet’s Q2 2020 earnings report.
Meanwhile, Instagram is also planning to monetise Reels by introducing a shopping feature that would allow creators to sell products. The shopping feature will likely reach IGTV as well by the end of this year. The move will essentially allow users to click on merchandise in the video in order to purchase them. Instagram users already have the option to purchase goods via the Shopping tab on the Explore page.