Shopify to solid growth with increased losses

The Canadian e-commerce provider has continued its robust revenue growth and the value of transactions on its platform (GMV). Shopify has grown by more than 20% for the last three quarters.

The Gross Merchandise Value of Shopify reached, for the first time, $200 billion. This is significantly smaller than Amazon’s $600 billion, but one should remember that Amazon surpassed $200 billion only in 2017.

Shopify keeps growing more rapidly than Amazon, compared to Amazon’s first-party sales and service sales of Amazon.

With this level of growth, Shopify could eventually rival Amazon in terms of GMV. However, this will take years of rapid growth,

Focus back to core: the online platform

If Shopify wishes to challenge Amazon seriously, it must regain its focus. Over the recent years, Shopify has gone in different directions while trying to compete with Amazon. The same applies to Amazon, which has struggled to find a service that would counter the growth of Shopify.

Logistics was the area where Shopify seemed to think it should challenge Amazon. For a couple of years, Shopify invested in building its fulfilment capacity. Unfortunately, that Amazon moat has required tens (or even hundreds) of billions and decades to make. Thus, it was apparent it would take time for Shopify to become a serious challenger.

With this realisation in mind, Shopify decided to sell its fulfilment business to Flexport. The curious thing about this deal is that Flewport is run by Dave Clark, one of the men credited for building the Amazon fulfilment operation during his almost 20-year tenure at the company. Who better help Shopify to compete with Amazon?