Shopify Named Top-Tier Software Vendor by APPS RUN THE WORLD in the APPS and CLOUD TOP 500 Market Report

Shopify Strengths, Domain Expertise, and Key Differentiators

Shopify is a cloud-based commerce platform tailored for small and medium-sized businesses seeking a versatile multichannel solution. This software empowers merchants to effortlessly design, establish, and oversee their stores across diverse sales channels such as web, mobile, social media, physical locations, and pop-up shops. The platform offers a unified perspective of the business operations.

Engineered for reliability and scalability, Shopify provides enterprise-level technology accessible to businesses of all sizes. The platform offers four monthly payment plans: Shopify Lite, Basic Shopify, Shopify, and Advanced Shopify, with an additional option for high-growth businesses, Shopify Plus. Monthly fees and Shopify Payments rates vary based on the chosen plan. Key features include a content management system facilitating inventory management, HTML and CSS code editing, coupon creation, and online payment acceptance via Bitcoin, PayPal, and major credit cards. Shopify's intuitive user experience requires minimal training, enabling merchants to set up their shops in less than an hour.

In June 2018, Shopify introduced Shopify Ping, a free mobile app streamlining business communications and tasks. This app consolidates messages from various customer interaction platforms into a single interface, allowing merchants to manage tasks and customer interactions seamlessly. Shopify Ping also integrates with Kit, a free virtual assistant, facilitating marketing activities through a conversational interface. This integration supports actions like running ads on social media, email campaigns, retargeting efforts, and swift customer engagement. Given that a significant portion of Shopify entrepreneurs operate and connect with customers via mobile devices, Shopify Ping prioritizes flexibility and timeliness. The app ensures that merchants have the necessary tools to keep up with their businesses efficiently, minimizing redundancies and saving valuable time.

Shopify Recent Developments

In July 2022, Shopify announced the successful completion of its acquisition of Deliverr. According to Aaron Brown, CEO of Shopify's logistics group, the integration of Deliverr into the Shopify Fulfillment Network (SFN) will provide millions of independent businesses, both on and off the Shopify platform, with a comprehensive logistics solution for seamless and speedy order fulfillment. Brown expressed his excitement in officially welcoming over 400 talented Deliverr employees to Shopify. The collaborative efforts of the combined team will enhance SFN's capability to oversee the entire journey of merchant inventory, from its arrival at domestic ports, through the warehouse network, across various sales channels, and ultimately reaching the consumer's doorstep.

In June 2021, Shopify finalized the acquisition of Primer, an augmented reality startup renowned for its app enabling users to visualize the appearance of tiles, wallpaper, or paint on surfaces within their homes. While Shopify has already developed some integrations enabling sellers to incorporate 3D models into their storefronts, allowing users to place them in their physical surroundings, it is evident that there is ample room for further experimentation in this innovative space.

In January 2019, Shopify introduced Shopify Studios, a comprehensive television and film content development and production house dedicated to showcasing the stories of entrepreneurs.

Shopify Mergers and Acquisitions (M&A) Activities

In April 2022, Shopify made a significant move into the influencer market by acquiring Dovetale, a New York-based influencer marketing startup. This strategic step aligns with Shopify's recognition of the increasing prominence of creator marketing, particularly in Europe, one of the platform's major growth markets. Dovetale specializes in assisting companies in the management of their influencer marketing campaigns. Through its platform, Dovetale facilitates connections between businesses and social media influencers, streamlining the process of collaboration and providing tools to monitor the impact of influencers on the brand's sales. In the year 2021 alone, the startup achieved an impressive milestone, achieving a remarkable 100 percent month-on-month growth in revenue.

In November 2022, Shopify bolstered its headless commerce platform by acquiring Remix, an American provider of online frameworks.

In October 2019, Shopify completed the acquisition of 6 River Systems, Inc., marking a transformative step in the fulfillment industry. This strategic move integrates 6 River Systems' cloud-based software and its fleet of collaborative mobile robots, known as "Chuck," into the Shopify Fulfillment Network, thereby accelerating its expansion. The addition of the skilled 6 River Systems team, comprising over 130 employees, brings valuable expertise in fulfillment software and robotics to Shopify. This synergy positions Shopify to enhance fulfillment operations for numerous businesses, while 6 River Systems remains committed to advancing its industry-leading warehouse solutions.

In May 2019, Shopify acquired Handshake, a B2B (business-to-business) e-commerce platform specializing in wholesale goods. This strategic move by Shopify and Handshake is aimed at the segment of the e-commerce market where brands and merchants engage in wholesale transactions, complementing potential consumer-focused retail endeavors.

Shopify Customers in ARTW Customer Database

Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying Shopify applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Shopify and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Shopify, customers.

Shopify Key Enterprise and Cloud Applications

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Shopify Direct vs Indirect sales

Shopify Customers - Breakdown by Geo, Size, Vertical and Product

List of Verified Shopify Customers

No. of Shopify Customers: 1749000

No. of Shopify Enterprise Applications Customers: 1749000

No. of Shopify Cloud Customers: 1749000

No. of Shopify Cloud Subscribers: x

Shopify backs a vast network of 1,749,000 businesses. Over 10,000 merchants, including Allbirds, Gymshark, Heinz, and Staples Canada, benefit from the advanced features of Shopify Plus. Notable clients in Shopify's diverse customer base include Tesla Motors, Budweiser, Red Bull, LA Lakers, the New York Stock Exchange, GoldieBlox, and numerous others.

Shopify Market Opportunities, M&A and Geo Expansions

On May 3, 2023, Shopify disclosed the sale of the majority of its former Shopify Logistics business to Flexport, a technology-driven global logistics platform. As per the transaction agreement, Shopify received stock equivalent to a 13% equity interest in Flexport, augmenting its existing stake. This strategic move places the development of Shopify's logistics solution in the capable hands of Flexport, a trusted partner that shares a mission alignment with Shopify.

In 2022, there was a 21% surge in total revenue, reaching $5.6 billion, in comparison to the previous year, marking a 23% increase when adjusted for constant currency. Notably, Subscription Solutions revenue experienced an 11% rise, amounting to $1.5 billion. Concurrently, Merchant Solutions revenue saw a substantial growth of 26%, totaling $4.1 billion, and a 28% increase on a constant currency basis.

For the entire year of 2021, the total revenue amounted to $4,611.9 million, demonstrating a remarkable 57% upswing from the figures of 2020. Within this period, Subscription Solutions revenue exhibited a 48% growth, reaching $1,342.3 million, while Merchant Solutions revenue soared by 62%, totaling $3,269.5 million.

Looking back at the year 2020, Shopify's total revenue surpassed $2.9 billion, indicating an impressive 86% surge compared to the previous year. This robust growth aligns with the notable increase in online shopping, accentuated by the impact of COVID-19 restrictions, which compelled numerous brick-and-mortar businesses to close, further propelling Shopify's success.

Shopify introduced Shopify Chat in August 2019, an innovative native chat feature enabling merchants to engage in real-time conversations with online customers visiting their Shopify stores. Integrated into Shopify's mobile app Ping, Shopify Chat extends additional communication avenues for merchants to offer customers services such as product recommendations, discounts, and checkout links.

In June 2019, Shopify unveiled its Fulfillment Network, a service designed to manage shipping logistics for merchants, positioning itself as a competitor to the established leader, Amazon FBA. Initially accessible to qualifying U.S. merchants in specific states, the Shopify Fulfillment Network aims to streamline the fulfillment process. Additionally, Shopify expanded its language support with the inclusion of 11 new languages and introduced a multi-currency payment system accessible to all merchants. The company also has plans to launch a new point-of-sale system by the end of the year.

Shopify Risks and Challenges

In 2021, nearly half of Shopify's C-level executives parted ways with the company. The Chief Talent Officer, Chief Legal Officer, and Chief Technology Officer all transitioned out of their roles, following the earlier departure of Craig Miller, the Chief Product Officer.

Looking ahead, the strategic significance of migrating customers to Shopify Plus becomes increasingly vital for the eCommerce vendor. Shopify has capitalized on the surge in online commerce spurred by the pandemic. However, there is a pertinent question about whether Shopify should broaden its scope to address omnichannel requirements. This expansion could address CRM-related concerns raised by customers who are grappling with a myriad of service and support requests, ranging from fulfillment to returns, and from API integration to subscription management.

Shopify Ecosystem, Partners, Resellers and SI

Through its collaboration with Alipay, Shopify has opened up new horizons for cross-border commerce among its merchants. This integration of a new payment gateway enables Shopify merchants to effortlessly accept payments via Alipay, catering to over one billion annual active users in China alone, with the potential to reach hundreds of millions more across Asia in the future.

At Shopify's inaugural partner conference, Unite, held in San Francisco, the significance of the partner ecosystem was evident. With more than 650 partners participating, Unite introduced several platform enhancements, including the Sales Channel SDK. This SDK empowers partners to utilize Shopify's APIs to create innovative channels for Shopify merchants. Already, esteemed partners such as Houzz, Wanelo, and Ebates have developed channels through which Shopify merchants can list and sell their products.

In a strategic move, Shopify unveiled the Shopify Plus Partner Program, establishing collaborations with global digital, marketing, and design agencies to advance the success of businesses in commerce. Notable industry leaders and experts, including One Rockwell, R/GA, Redstage, and Something Digital, are part of the program's initial launch. As consumer expectations rapidly evolve, Shopify Plus has been reshaping the landscape for large merchants over the past two years, offering a distinct model to align commerce strategies with changing consumer needs. Recognizing the importance of staying at the forefront of industry trends, these brands seek partnerships with innovative global creative firms to drive strategic success.

The Shopify Plus Partner Program aims to foster the growth of a robust partner ecosystem for Shopify Plus merchants, facilitating connections between the two groups. Notably, Shopify has recently joined forces with SingTel, the largest telecommunications company in Southeast Asia, as a distribution partner. This strategic partnership further strengthens Shopify's reach and impact in the region.

Shopify Cloud Infrastructure Insights

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• Shopify Public Cloud and Infrastructure (IaaS)
• Shopify Platform (PaaS)
• Shopify Application Delivery
• Shopify Private Cloud and Data Centers

Research Methodology

Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.

Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).

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