Shopify bets on SHOP to compete with Amazon

Shopify is vigorously promoting its S HOP application to compete with its main rival Amazon . Some analysts believe that S HOP is an important way for Shopify to develop its payment business .

S HOP originally appeared in 2017 as Arrive , focusing on package tracking , and then changed its name to S HOP in April 2020. After the rebranding , users can use a series of new features, such as shopping from local businesses and receiving exclusive product updates from brands that users have purchased before .

Since April 2020 , and in the context of the epidemic -driven e-commerce boom , S HOP has added more features . For example, the ability to search for products across merchants and send gifts only via text messages . In order to narrow the gap with Amazon, Shopify said it will launch more features.

The importance of S HOP to Shopify cannot be underestimated. Some analysts believe that it gives Shopify the opportunity to compete with Amazon as an independent consumer brand . One of the key points of SHOP 's evolution is to attract merchants to sign up for more Shopif y services, the most important of which is payment services .

It is understood that in Shopify 's ecosystem , merchants must unlock other services by using certain services. For example, merchants must register in Shopify Payments to use Shop Pay, and products must also use Shop Pay when they are sold on S HOP .

Shopify 's goal is to make its entire range of services more attractive than competitors such as Facebook Marketplace and Amazon. Analyst Ken Wong said that in order not to be excluded from the market , large merchants that did not previously use Shopify Payments are considering joining .

Payments are also becoming an important revenue source for Shopify , accounting for 49% of its GMV ( $20.5 billion).

Every transaction made on the platform generates revenue for Shopify , and customers are charged 2.4% to 2.9% when paying with major credit cards . Shopify merchants can also choose to use a third-party payment processor instead of Shopify Payments, but merchants will be charged an additional 2% transaction fee.

Last year, Shopify also announced that it would offer Shop Pay support to any merchant selling on Facebook or Google , regardless of whether they were a Shopify platform merchant.

In this regard, analyst Colin Sebastian said that these merchants are a very large user base for Shopify . Providing online and offline digital payment services to merchants outside the Shopify platform can turn Shop Pay into a strong competitor to PayPal .

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