Over two years of pandemic and a 347% rise in shares amid the health crisis made Shopify a Wall Street big winner. However, as the world returned to normal, the company did not escape the market changes unscathed.
Tightening Its Belt
The e-commerce giant’s boom appears to be coming to an end. In late June, it announced that it would lay off at least 1,000 workers, cutting 10% of its workforce while trying to stay afloat with minimal damage.
Just hours after the workforce cut, Shopify said it had missed earnings and revenue expectations for the second quarter. In response, it lowered its financial outlook for all of 2022.
Moreover, the company warned that the Fed’s recent interest rate hike for the second consecutive time would hit consumer spending for the rest of the year.
Shopify had already predicted the situation. In February, it forecast that the cooled pandemic-driven online shopping surge would result in a revenue slowdown in this year’s first two quarters.
Since then, the e-Commerce giant has seen its market value drop. Lowering financial expectations and cutting its workforce left Shopify’s stock 79% below its records during the pandemic.
Growth Does Not Slow Down
However, the company’s growth has not stopped. Shopify remains one of the most popular platforms for e-Commerce.
A decade ago, the now e-Commerce giant was considered one of the fast-growing companies using innovative technology to take on major players in their respective industries.
Although 10 years have passed, the company’s evolution has served its original mission: to help emerging entrepreneurs bring their ideas, visions, and projects to reality.
The Covid-19 health crisis hit all economic sectors and most businesses. However, Shopify’s software has become a lifeline for traditionally in-person retailers over the last three years, especially amid pandemic-induced lockdowns.
Most businesses that were already benefiting from Shopify’s features and tools also saw their online presence double, and their customer base grew.
Leading E-commerce platform
Shopify is one of the most popular platforms people turn to for setting up online stores. The highly customizable platform allows customers to modify their web stores efficiently to grow their business and sales. Because of its demand, firms such as a Shopify development agency also exist to enable customers to seamlessly set up their stores and gain access to extensive features for their brands. Because of its demand for online businesses, Shopify will continue to grow and remain a leading online e-commerce support service provider.
Numbers Speak for Themselves
Shopify’s success in recent years has not been decimated by the difficulties ahead. According to Statista, the company has the third largest e-commerce market share at 11% percent, trailing only giants WooCommerce and Squarespace.
Moreover, Shopify revealed in a mid-2020 press release that over a million businesses and brands use its platform in at least 175 countries.
With such impressive figures, the company has the foundation to continue positioning as an e-commerce leader on the way forward. Additionally, Shopify still intends to explore international markets and digital payments.
Before Affirm went public in 2021, the e-Commerce giant invested in the buy-now, pay-later company. Moreover, it acquired Deliverr as part of its plan to take on its direct competitor Amazon.
Buying Deliverr has enabled Shopify to lay out a blueprint for providing an end-to-end logistics platform that promises fast and easy fulfillment, the CEO of Shopify’s logistics group Aaron Brown said when announcing the acquisition.
Shopify Fulfillment Network (SFN) and Deliverr hope to give merchants tools to better align their inventory supply through multi-channel management, predictions on customer orders to align supply and demand, and more flexible and independent logistics services.
As of 2021, Shopify has marked five years of profitability and amassed a $42-billion market capitalization after launching 16 years ago.
Final Thoughts
Shopify remains a giant player in the eCommerce universe, and after being hit by a recession in 2008, the company knows how to handle market disruptions.
While it might take twice as much effort to stay afloat in its second market downturn, it’s predicted to continue growing year over year.
In the meantime, the company will address inflationary pressures with shorter recovery period activities to survive a softer consumer environment.
