USD 1bn investment in Shopify’s fulfilment operations awakens “sleeping giant”
In an Interview with Third Bridge Forum, the specialist said Shopify was “fast approaching” 2 million active merchants and 12,000 active Shopify Plus subscribers.1https://thirdbridge.com/transcripts/shopify-focus-on-payments-fulfilment-competitive-dynamics/ We were told Shopify’s benefits are its ease of use, with merchants able to open stores “in a matter of hours”. The specialist said Shopify’s success is related to the high number of selling platforms built into it, including Facebook, Pinterest, Instagram and recently TikTok, which make promoting products more convenient.
Growth in Shopify is coming from three areas, according to the specialist – the “core” platform, payment offerings and order fulfilment. Shopify’s continued investment in fulfilment should increase its DCs from three to nine by 2025 as the company attempts to recreate the “Amazon Prime” experience. The specialist said increasing the number of DCs for merchants would help them “up scale more quickly and offer a better customer experience”.
The specialist described Shopify Plus as a “cash cow” for the company. They told us the primary benefits for merchants are greater efficiencies from automations and cost savings compared to competitors Magento, Salesforce and Commerce Cloud. We were told Shopify is able to reduce costs because it has more developers building stores compared to Salesforce or Magento.
Although the specialist said Shopify is a “rocket ship” for the SMB market, for businesses with a large omnichannel footprint, Commerce Cloud and Salesforce are more “sophisticated”. Enterprises that rely heavily on B2B sales are also likely to “gravitate towards” Magento or BigCommerce rather than Shopify, according to the specialist.
Shopify could expand its headless commerce offering, which the specialist said would probably be built in house as part of the same tech stack as other Shopify products. Over the next three years, we were told Shopify will continue to be a “front runner”, investing further in fulfilment to make it as “turnkey” as possible. However, Shopify faces challenges from competitors offering price concessions.
To access all the human insights in Third Bridge Forum’s Shopify – Focus on Payments, Fulfilment & Competitive Dynamics Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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