Shopify is a platform for users to create e-commerce websites. Merchants can use the software to design, set up, and manage their stores across multiple sales channels, including social media, marketplaces, brick-and-mortar locations, and pop-up shops. Shopify’s platform offers a range of services including marketing, customer engagement, payments, and shipping tools. It also has an application programming interface (API) platform and app store, which allows developers to create applications for Shopify online stores.
The company gains an edge over peers through its merchant solutions and value-adding offerings to clients, such as shipping discounts (the discount rate varies with the package). In June 2021, the company noted that it reduced the commission it charges from app developers to 0% from 20% for those that earn less than USD 1 million annually. Merchant solutions include facilities needed to augment the subscriptions including accepting payments, shipping, fulfillment, and securing working capital. Moreover, Shopify operates an app store for developers to sell apps to merchants.
Shopify acquired Primer, an augmented reality (AR) technology provider, in June 2021. Primer’s AR tech lets users view the potential impact of home improvements such as tiles, patterns, wallpaper, and paint on their mobile devices by mimicking the real lighting conditions, textures, and sheens. Through the acquisition, Shopify absorbed Primer’s team of eight employees and intended to use Primer to complement its own AR integrations, such as allowing sellers to embed 3D models into their storefronts. This is in line with its claim that AR content can lead to a 94% higher conversion rate.
During Q3 2023 , Shopify introduced the "Retail Plan," a specialized pricing package for in-person sales by brick-and-mortar businesses. Additionally, they introduced the "POS Terminal," for merchants to transform their mobile point-of-sale into a countertop payment device with Wi-Fi and Ethernet support.
Key customers and partnerships
As of April 2021, the company had a large customer base of around one million businesses, based across 175 countries. Although the company focuses on small businesses, large enterprises such as Tesla, Red Bull, and Nestle are also among its customers. Moreover, as of March 2021, the platform had more than 1.7 million users.
In May 2021, Shopify announced that its platform would integrate with Google to allow merchants on the platform to reach consumers through Google services, including Search, Maps, Images, Lens, and YouTube. This was an addition to Shopify’s integrations with large global platforms, which already included Facebook and TikTok. In addition to this, the company had plans to pilot “TikTok Shopping,” TikTok’s e-commerce service, among particular Shopify merchants across the US, the UK, and Canada.
In October 2021, Shopify partnered with Microsoft to bring merchant listings to Microsoft Bing (search engine), Microsoft Edge (browser), and Microsoft Start (news service). In April 2022, Shopify partnered with Strike , a digital payments platform, to offer an integration for merchants to receive bitcoin payments from global customers in USD. Shopify further expanded upon its crypto-related solutions for its merchants by partnering with global cryptocurrency exchange platform Crypto.com in May 2022 to enable Shopify merchants to integrate “Crypto.com Pay” on their online storefronts.
In August 2023 , Shopify integrated with Solana Pay, a decentralized payment protocol, to enable direct settlement with USDC, a cryptocurrency pegged to the US dollar, and offer fee-free transactions. Furthermore, several crypto-focused brands, like Helius and Mad Lads, announced their plans to integrate Solana Pay into their Shopify stores.
Shopify expanded collaborations in Q3 2023 , extending ties with Flexport, incorporating the Buy with Prime app for US Amazon fulfillment network users into Shopify Checkout, enhancing B2B commerce with Faire, and establishing a global product development partnership with WPP.
Funding and financials
In May 2015, the company was listed on the NYSE, raising USD 131 million. Shopify generated revenue of USD 5.6 billion and an operating loss of USD 822.3 million in 2022. Moreover, gross merchandise volume (GMV) rose 12.8% YoY and reached USD 61.0 billion in Q4 2022.
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