Shopify's Q4 revenue was $1.38 billion, and the market size reached $175 billion

On Wednesday, Shopify reported fourth-quarter 2021 revenue of $1.38 billion, beating expectations of $1.34 billion . And after its fourth-quarter 2021 GMV exceeded $54 billion, Shopify is now almost 50% the size of Amazon's market. In other words, Amazon's market is only twice as large as Shopify's.

Meanwhile, Shopify warned in its fourth-quarter earnings report that revenue will slow in the first half of 2022 , down from 57% growth in 2021 , citing a deceleration in e-commerce spending compared to the peak of the coronavirus pandemic, as well as other factors such as the potential impact of the end of government stimulus and rising inflation on consumer spending.

Shopify has been one of the biggest winners of the pandemic-induced shift to e-commerce. When the pandemic forced physical stores to temporarily close, many retailers turned to companies like Shopify to build an online store . But now, e-commerce companies like Shopify, Etsy, eBay, and Wayfair are facing enormous pressure to prove that their businesses can continue to grow in a post-pandemic market .

Shopify said it expects year-over-year revenue to be the highest in the fourth quarter as "certain business initiatives and sales and marketing investments gain momentum during 2022."

In 2021, sellers on Amazon traded $390 billion worth of goods. Shopify merchants had a combined GMV of $175 billion. Shopify's GMV for the full year was 45% of Amazon's marketplace. However, it reached an all-time high of 48% in the fourth quarter. Over the past few years, Shopify merchants as a group have grown faster than Amazon third-party sellers.

In 2018, Amazon's marketplace was four times the size of Shopify's. Shopify's GMV that year ($41 billion) was lower than its GMV in the fourth quarter of 2021. Since then, Shopify has grown twice as fast as Amazon, reducing it to only 2x as large. During this time, Shopify has more than doubled its merchant base, and some existing merchants have continued to grow sales .

All Amazon third-party sellers sell through one channel , Amazon. Shopify merchants each operate their own independent channels. The significance of Shopify's scale is that brands are ready to sell directly to consumers , coupled with advertising effects on Google, Facebook, and other marketing .

Given that there are many alternatives to Shopify, such as BigCommerce, WooCommerce, Magento, etc., direct-to-consumer e-commerce is even bigger. Amazon Marketplace is not the only way for small businesses to reach consumers, although Amazon has a huge e-commerce market share in key geographies. Shopify's performance is proof of this.

Shopify

Q4 Revenue

Amazon