Shopify, the Canadian e-commerce company, is moving to dethrone Amazon.
This week, Walmart announced it will team up with Shopify to offer goods from Shopify’s one million business clients. This comes only a month after a deal was announced between the Ottawa-based platform and Facebook Marketplace. Shopify’s growing web of e-commerce partnerships now puts it in a strong position to challenge Amazon’s monolith status.
Shopify is an online e-commerce platform which allows around 1 million merchants to reach their customers. But Chief Operating Officer Harley Finkelstein is keen to differentiate his company from Amazon’s. Finkelstein notes that unlike Amazon, Shopify is not a “marketplace,” but rather a way for “consumers to find not only new local businesses, but also to interact with their favorite brands.”
Shopify doesn’t have a stock of products from the brands that use their platform, as Amazon does. When a consumer purchases a product, the individual merchant must process the transaction and send out the product themselves.
Shopify already held the second-largest share of retail sales made in the U.S. in 2019. But its new partnership with Walmart slingshots the company into an earnest rivalry with Amazon. Walmart’s e-commerce site already boasts 120 million visitors each month. That means Shopify merchants will now be reaching a huge community of existing shoppers.
“For years, building an eCommerce Marketplace customers trust has been a priority for our business” said Walmart vice president Jeff Clementz in a statement. He noted that the partnership with Shopify was mutually-beneficial, and would allow “Shopify sellers to seamlessly list their items on Walmart.com, which gives Walmart customers access to a broader assortment.”
Shopify On The Up And Up
This has been a great season for Shopify, both because of, and in spite of, the pandemic. Back in May, Facebook announced it would partner with the site for a new online shopping feature called Facebook Shops. Announcing the partnership, Shopify CEO Tobias Lütke said, “we are reducing the barriers to entrepreneurship and advancing the future of commerce.”
That statement could not be more true. Shopify has been quick to adapt to the coronavirus pandemic, and the new retail landscape it has created. Adding a tipping feature for restaurant orders and curbside pickups, Shopify was quick to respond to the need for contactless interaction. It was also swift in expanding Shopify Capital, its financing business for merchants, now available in the UK and Canada.
And Shopify’s user base is growing faster than ever before. From March 13 to April 24—the height of COVID-19 shutdowns—the amount of new merchants on the site grew 62% compared to the prior six-week period.
Despite financial floundering in most of the retail industry, Shopify stock is up almost 150% from 3 months ago. With two strong partnerships in the bag, and a display of shrewd business maneuvering, 2020 may well be Shopify’s year.