YouTube is testing a new feature that will allow content creators to tag products on their videos to let viewers buy their merchandise or sponsored items directly from the platform. The upcoming feature was first spotted back in October 2020, where the Google-owned platform extended the shopping-tag feature to limited creators in the US. Currently, it still limited to producers in the US, and viewers may find the shopping bag icon at the bottom left corner of the video. It is visible to users on both YouTube's iOS and Android platforms as well as the web client.
YouTube explains that creators can add "certain products" to their videos, though the full details over how to tag items remain unclear. "From there, viewers can explore each product’s page to see more information, related videos, and purchase options for that product," the company added in a blog post. As the shopping feature is still under development, only select creators have its access, and the company is yet to share more details over its global availability. At the moment, it is also unclear how YouTube will generate revenue from these sales directly from the platform.
But YouTube would likely introduce a cut from these in-app purchases, similar to Google's plan on levying 30 percent fee from in-app purchases on Android devices. Currently, the video-sharing platform's 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 2019, as per Alphabet's Q2 2020 earnings report. Bloomberg had earlier reported that YouTube testing shopping integration in collaboration with Shopify.
With the latest development, YouTube will also hope to take on Instagram that has been offering in-app shopping features to both creators and regular users. Currently, Instagram users can purchase sponsored goods and creator-merchandise via IGTV, and the company is also testing the shopping feature through Reels. YouTube might have an edge over its competitors as the platform has more than 2 billion users.