User:Alvinz00/sandbox

Instagram shop is a social marketing phenomenon of people using Instagram, an online social networking platform to share pictures and videos, to sell products as shop owners on the Internet. Accounts are created and used as online shops, photos of products are posted for customers to surf. More and more people recognize this opportunity for starting their own businesses to sell handmade products in Instagram shops. Besides, it is trendy for people to purchase goods from the Internet instead of shopping in malls. The occurrence of Instagram shop is on account of the new shopping trend among people.

History
Instagram is created by Kevin Systrom and Mike Krieger, who are the current CEO and technical lead of the company. It launched on October 6, 2010 and its community expanded rapidly and had grown to 1,000,000 users in only two months. Up to 2014, there are more than 300 million users sharing their daily moments with friends and family on Instagram. It is a popular app in smart phones, for example, iPhone and Android, which makes people can easily download it to their mobile phones. In Hong Kong, many people use smart phones so it is highly convenient for them to use Instagram. People who are interested in doing business but do not have enough capital to purchase or rent a place to establish a shop think of the great idea. They create online accounts and post photos of their products to sell and advertise on Instagram because of its huge number of users and free charge in signing in a new account. Therefore, they can successfully start business without spending any expenditure on renting and advertising.

Successful Cases
Alyssa Coscarelli is an owner of Instagram shop named @shopalyssainthecitym. She is as well an assistant editor at a website about fashion and started her business by selling things in her own closet. She commented running an Instagram shop is easy as you do not need to carry the goods around. Now, her shop has a few thousand followers and is well known for its reputability and reasonable price.

Benefits
Firstly, the mode of operation of Instagram shop is simple. To open an Instagram shop, people only have to take three steps by signing up an Instagram account, purchasing goods from wholesalers and promoting the shop. Secondly, due to the simple business model of Instagram shop, its operation cost is generally lower than a physical shop. Instagram shop is found on the internet, so there is no need for shopkeepers to pay rental fee and decoration fee. In order words, the only cost of the shop is goods. This also means that the operation risk is reduced largely. Since the investment involved is not higher, the loss of the shopkeeper is limited, supposed that the shop owners are able to control the goods’ supply and demand well. In comparison with other platform for online shop, Instagram shop is more user friendly. Simply, people who would like to open an online shop on the internet might have to authenticate their identity by providing identity card numbers or credit card numbers. At least, the policy of Yahoo!, eBay or Taobao all require its users to do so. However, Instagram is open to everyone without providing the sensitive private information. The huge user base is an incentive to give impetus to people to open a shop in Instagram. According to the Instagram 2015 Study, Instagram has more than 300 million monthly active users, overpassing twitter with 286 million. In Instagram, retailers are able to promote their products to tens of thousands of potential customers without any promotion costs by simply posting the photo of the products and spread the posts continuously. With the increase of followers, the potential customer base is therefore built up. Another reason makes Instagram business popular is the unique nature of Instagram. Different from other social media sites, Instagram is completely a photo-based platform, available on both Apple iOS and Google Android. Instagram users are able to receive the most updated information from the brands via Instagram immediately when retailers have posted some photo of their products. Image actually is the most direct medium to impress people. That’s why, retailers can easily obtain a well promotion effect by utilizing Instagram. Lastly, despite the fact that there are currently more than 300 million service users in Instagram, which has already exceeded the active users in Twitter by 100 million users, the number of active users of Instagram is expected to grow continuously. By which, 70% of the service users have the intention to shop through Instagram. There are much attention received for marketers and advertisers in this pool of audience. For example, Fox and Fawn’s business is one of the shops that owns an Instagram shop, the profit generated from Insta-sales can vary from 30% to 70% of Fox and Fawn’s business.

Drawbacks
Getting to be known is easy on Instagram. User can request to follow hundreds, if not thousands of people in a short period of time. It is easy for users to set up their own shop. A lot of the Instagram shops run by the format of taking photos and uploading them, customers can contact the seller using the phone number they put up on the information sector.

Customers
Using instagrams to buy products is easy for customers to fall for traps. Instagram scams have been found. Buyers on Instagrams are usually not aware of the hidden risks. Other scams related to Instagram: Scholarships: using fake funds Free stuff giveaway Pay-first products The above methods usually gets personal information such as Instagram username and password. Scam like faking pay-first businesses takes actually money from the victims.

Sellers
Drawbacks are applicable on the seller side. Not everyone worldwide have an Ios or Android phone. With a combined 87.6% of smartphone shipped globally, the Instagram app is only workable on Ios or Android system. It does not apply for Windows mobile, Blackberry or Linux. It is difficult to build up their business to a larger extend via Instagram shop. Copyright problem. instagram shops sometimes sell branded products like Nike, Adidas, Levis etc. Sellers have to take their own photos to post on the shop page. The time spend on taking a picture that stands out may not be leveling with the income they earn through the Instagram Business.