Shopify continues to grow faster than Amazon
Online retail platform Shopify accelerated its growth after a decline in the growth numbers from the pandemic highs. Growth has picked up from 15,7% in Q2/2022 to 25,7% in Q4/2022. The rapid growth is enabled by the Merchant solutions divisions, which represents already 77% of Shopify’s business.
Shopify’s profitability was a hot topic in the investor call discussion. After encouraging Operating income numbers in 2021, some investors have been disappointed by the opertaing losses reported in 2022. In their responses Shopify executives doubled down on the improved efficiencies that the company is doing for the longer term. Shopify CEO Tobi Lütke emphasised how smartly how profitability is the long result of growing and improving efficiencies.
“Profitability is a consequence of growth and efficiency combined over time”
Growth after the pandemic
There has been a lot of discussion around Shopify’s declining growth against the pandemic highs. That growth happened during an unprecedented era in the retail market. On the other, hand contrary to many of Shopify’s counterparts, it’s revenues have not declined.
Shopify has been growing more rapidly than its biggest benchamrk in the ecommerce market: Amazon.
As Amazon’s growth has been coming down from the pandemic highs (for product sales even declining), Shopify has been able to outgrow Amazon. Only in Q2/2022, Amazon services grew slightly more rapidly.
GMV approaching $200 billion
Similar to Shopify’s revenue, the pandemic was a step-change for Shopify’s Gross Merchandise Value (GMV). On top that step-change, Shopify GMV keeps on growing with double-digit figures.
Shopify is about to reach the $200 billion mark for its GMV. Amazon reached that level only few years ago. According to Marketplace Pulse Amazon GMV was $277 billion in 2018.