The global pandemic has been no match for Shopify. The Ottawa-based firm has become a giant in the online shopping marketplace, especially as a lifeline for small merchants, many of whom can no longer operate brick-and-mortar storefronts.
Shopify’s growth has been impressive. About a year ago, the firm counted one million businesses as its users. Now it’s reported to have grown by about a third to 1.3 million users. The company continues to expand services offerings with its own fulfillment program as well as a business lending program. As the COVID-19 shutdown unwinds, Shopify will prove to be as healthy as ever.
The following excerpt from a Wall St. Journal article reports more on the topic:
The coronavirus pandemic has forced many small businesses to finally open online stores—and turned e-commerce software provider Shopify into one of the biggest winners of the retail shakeout. Shopify’s software lets merchants choose a theme to create an online storefront and mobile application. Merchants have to upload images and details on their products and organize their inventory.
Shopify’s software processes payments and calculates shipping rates. Sellers typically ship items directly to buyers, but Shopify also offers fulfillment services where merchants can store and ship items. Shopify charges sellers a monthly fee and takes a percentage of every transaction on its platform. Its revenue nearly doubled to $714.3 million in the second quarter as the number of new stores created on Shopify increased 71% compared with the previous quarter.
The company’s share price nearly tripled from its March lows and crossed above $1,000 in August. Even after last week’s selloff, Shopify’s market value of roughly $117 billion is bigger than eBay Inc. and Target Corp. combined, even though Shopify has a fraction of their sales or profits.
Other tech suppliers have taken off in the current environment. Crafts marketplace Etsy Inc. has become a top destination for buyers and sellers of cloth face masks, adding 4 million new users in April alone. The amount of money stored in payment processor Square Inc.’s app reached $1.7 billion in the second quarter, 3.5 times the same period last year.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group