Research
Interview Synopsis

Shopify – impact of economies opening, competitive dynamics & focus on payments

  • Public Equity
  • TMT
  • North America

Described by an expert interviewed by Third Bridge Forum as “a platform that touches all aspects of the entrepreneurial journey”, e-commerce company Shopify has grown substantially over the past year as COVID-19 accentuated the narrative around supporting local business. The specialist, a former divisional leader at Shopify, noted that what the company has done “better than anyone else” is storytelling, as well as building a platform that “meets the needs of about 80%”.  

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Taking stock of Shopify’s growth trajectory as COVID-19 lockdowns ease

The Interview covered an array of topics, centered around the company’s biggest challenges and opportunities as economies reopen after COVID-19 lockdowns, and its competitive positioning. Thinking about Shopify’s various offerings, such as its subscription product and merchant solutions, the specialist believes “the overarching theme or vertical of money and money-related products is by far the strongest revenue generator”. 

Taking a closer look at Shopify Payments, currently available in 15-20 countries, the expert anticipates that Shopify will add further product partners beyond Stripe, with local payment providers crucial for international expansion. The specialist also highlighted that cross-border payments provider Global-e “announced a USD 190m pre-IPO purchase from Shopify, so Shopify bought USD 200m worth of pre-IPO stock with Global-e”.

They added: “I’m very curious to see what happens with that, but if we look at history, it shows that the reason they’re doing that is because there’s potentially some white labelling.”

Although the COVID-19 pandemic drove interest in and adoption of Shopify, the expert does not expect its TAM to double every year going forward. However, “I would expect it to continue to grow”, driven largely by Shopify’s internationalisation efforts. “I don’t think there’s going to be any churn based on COVID hopefully coming to an end.”

In terms of the competitive landscape, we heard that there isn’t a better platform than Shopify for SMBs, “all the way up to mid-enterprise”. But when it comes to the “several-hundred-million-dollar e-commerce store”, Shopify still competes with the likes of Commerce Cloud and Magento. The specialist added that “something that will always shelter Shopify is the partners ecosystem. There isn’t a more robust partners ecosystem out there.”

To access all the human insights in Third Bridge Forum’s Shopify – impact of economies opening, competitive dynamics & focus on payments 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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