What are functional components?

The functional components are just simple functions to create simple components just by passing a context. Every functional component follows two rules,

1. Stateless: It doesn't keep any state by itself
2. Instanceless: It has no instance, thus no this

You need to define functional: true to make it functional. Let's take an example of functional components,

Vue.component('my-component', {
functional: true,
// Props are optional
props: {
// ...
},
// To compensate for the lack of an instance,
// we are now provided a 2nd context argument.
render: function (createElement, context) {
// ...
}
})

Note: The functional components are quite popular in React community too.