Shopify is a subscription platform where anyone can set up an online store and sell their products as professional merchants. These products can be sold through e-commerce or through traditional, in-person meetings. This site is one of the leading platforms used to carry out business and caters to sellers of all types and businesses of all sizes. Shopify is currently home to hundreds of thousands of entrepreneurs and billions of customers. With helpful additional features such as inventory management and sales analytics, Shopify has drawn worldwide attention capable of becoming as popular as e-commerce sites such as Amazon and eBay.
Amazon versus Shopify versus eBay
While Amazon, Shopify, and eBay all tend to the needs of business owners, there are differences in the approach and shop models that are offered to their subscribers and marketplace users. Amazon provides a ready to use marketplace for sellers while Shopify requires users to design and build their own online stores from the ground up.
When it comes to profiting from each site, business owners can expect a variation in what they need to provide upfront. Amazon has a wide customer base which comes at a price for FBA sellers and other Amazon merchants. Amazon’s Seller Central also provides extensive information on how to get started. This access is given to sellers in exchange for a percentage of every sale that is made on Amazon.
Shopify and eBay differ in market targets. With eBay, sellers can list a variety of items that have no commonalities. Shopify was created for brand building. This platform is geared towards forming a loyal customer base and selling products that are centered around building a retail store. Merchants have much more control over their online stores with Shopify with plenty of customizations and “storefront” design options.
Gross Merchandise Volume
Gross merchandise value (GMV) measures the total value of merchandise that is sold by a company over a certain period of time. This measurement specifically measures the value of merchandise sold through customer-to-customer (C2C) exchange sites. Shopify and eBay reported high gross merchandise volume for their second quarter reports. These numbers came in at $30.1 billion in GMV and $27.1 billion in GMV, respectively. When these figures are calculated out, Shopify has shown a gross merchandise growth of 119% while eBay records a gross merchandise growth of 26%, which is the highest quarterly growth rate that eBay has shown in over 15 years. The chart below (figure 1) provides an overview of gross merchandise volume growth for Shopify and eBay each quarter over the past five years. It shows that Shopify has steadily increased in GMV since 2015. While eBay has shown an overall upward trend, their overall GMV growth has wavered around $20-25 billion each quarter.
Figure 1. Shopify, eBay GMV. (Source: Marketplace Pulse)
Throughout the pandemic lockdown, Shopify has proven that it is capable of holding its own by delivering a nearly 100% increase in revenue. Many companies have moved their physical inventories online through platforms such as Shopify to make up for lost revenue through in-store sales.
Previous Predictions
Shopify has seen plenty of traffic in the last few years. This commerce platform proves that it can compete with online marketplace giants like Amazon and eBay. It had been reported that Shopify would be on track to outgrow eBay in worldwide sales according to a Marketplace Pulse article written just last year. This source noted Shopify’s slowing rate of growth but insisted that it would be long before Shopify’s gross merchandise value growth rates would be trending as low as eBay’s each quarter. Even with so many options for online retail markets and the slower growth rate, it was estimated that Shopify would overtake eBay in sales by 2021.
Shopify’s Future
With such an astronomical growth in Shopify’s revenue, leading to soaring stocks and popularity, Shopify has solidified itself as the second most used shopping destination behind Amazon. Since going public in 2004, Shopify’s platform has grown to powering over 500,000 businesses in 175 countries around the world and servicing over 1.2 million active users.
Just last year, this e-commerce platform has continued scaling its business with plans to diversify and build teams experienced in fulfillment software, infrastructure, and robotics through acquisition of the startup, 6 River Systems, which specializes in shipping fulfilment. This platform is quickly rivaling Amazon with the launch of their own warehouses and delivery networks.
Recent partnerships with major US physical and online retail giant, Walmart, has also bolstered Shopify’s expansive reach. This deal will allow some of the small businesses on Shopify to advertise their products on Walmart’s e-commerce platform. Shopify has become Canada’s most valuable publicly traded company since launching and shows no signs of slowing down its growth, proving there can be more than one competitor in the e-commerce space.
