By Isabella Diez
Initially beginning as an online snowboard equipment provider in 2006, Shopify has evolved over time into a worldwide e-commerce platform. The enterprise has grown to become a versatile space where customers are able to create their own e-commerce platform with the ability to manage inventory, fulfill and ship orders, and have access to analytics.
Launched during the rise of Amazon, Shopify entered the market at a time when e-commerce was gaining popularity but people were still cautious in their use of the internet. Targeting businesses by presenting them with a unique means to help them grow and succeed, Shopify evolved into the billion dollar company.
Shopify began to build a solid and consistent customer base. By 2010, Shopify had developed a mobile version for i-Phones to meet the versatile needs of its clientele. Shopify’s focus was on providing customers with the user-friendly tools that they needed to create their online platforms and in doing so was able to meet the needs of small businesses.
By 2013, Shopify had added a secure payment option to their platform and had developed a POS software to allow iPads to be used as terminals for brick-and-mortar sellers. Since then, Shopify has acquired 9 other companies and by 2014, Shopify serviced 10,000 retailers from 150 countries.
Four years later, Shopify announced their integration with Amazon, an entity known as Amazon Sales Channel. Sellers could list their products on Amazon with a single click of a button. In this way, merchants had the ability to seamlessly link their stores to Amazon allowing their products to be found on Amazon’s marketplace.
As Shopify continues to increase in popularity, many argue that Amazon and Shopify are becoming direct competitors. However, this may not entirely be the case.
“The actual relationship is more friendly … Shopify is building a business that looks more like Salesforce than Amazon.” explains Forbes advisor, Jon Markman.
Salesforce is an online platform for customer relationship management or otherwise known as CRM. Its primary objective is to help organizations with marketing, sales, commerce, and providing service for their customers.
Shopify is an e-commerce platform directed towards serving a business clientele, whereas Amazon is an online marketplace. Shopify aims to help small businesses grow and succeed by providing them with the necessary online tools and solutions for their business operations. As Shopify increases their portfolio, value is added for their customers. Shopify caters to small businesses, which offers ease and accessibility to their customers. Shopify goes beyond just a selling platform but aims to build lasting connections with their customers.
The continuous growth of Shopify is remarkable. This year alone, Shopify’s stock price has increased 2.5 times, with a market cap at $130 billion. The stock for Shopify trades at 50 times the expected revenues for 2020. Forbes believes that by 2025 earnings could scale 7 times for shareholders.
Recently with the challenges presented by COVID-19, Shopify launched a program entitled Shopify Capital which offers cash advances from $200-500,000 to small and medium sized businesses. This initiative was put in place to help advance e-commerce activities and to assist small businesses who are struggling during this time.
In the spring, when many businesses were shut and therefore in-person shopping was not possible, millions across the globe turned to online purchasing. Ecommerce activity increased by 27% by the end of April of this year. Interestingly, as lockdown restrictions were lifted this online shopping trend continued.
“The number of new stores created on Shopify grew 62% between March 13 and April 24, compared to the prior six weeks”, states the COO, Harley Finkelstein.
Shopify has changed the e-commerce landscape significantly. By allowing sellers to set up shop online with ease, and through their emphasis on building lasting connections with their customers, the future of Shopify is likely to be very promising.
Photo by Roberto Cortese, Unsplash