In just fifteen short years, Shopify has grown from humble beginnings to become one of the fastest-growing eCommerce platforms online. The Shopify eCommerce solution is perhaps best suited to users who desire an easy, flexible and affordable starter solution for their online store. The provider now has upwards of 820,000 stores accounting for 20% of the total market share. However, the continued success of any company in the dynamic digital market is never guaranteed.
WooCommerce
There is only one platform that is more popular than Shopify, and that is WooCommerce.
The platform is a best-seller primarily because it is based on the similarly popular WordPress content management system. Users who run WordPress can easily install the WooCommerce plugin for free. Happily, there are no transaction fees either.
A key difference between Shopify and WooCommerce is that the latter requires the user to be responsible for site hosting, PCI compliance, and security. This makes it more suited to those who are prepared to hire developers to build or maintain their store.
Squarespace
Squarespace is quite similar to Shopify in the sense that both offer a hosted solution that is accessible to all – regardless of technical skill level.
Indeed, the Squarespace interface is sleek and minimalist and features drag-and-drop sections to get the look that users desire.
Originally, Squarespace entered the market as a website builder for creatives and other small business owners. Many of these individuals have stuck with the company while it has added increased functionality to its content management system.
The company also employs an aggressive marketingstrategy, partnering with influencers and Squarespace advocates to offer promotional discounts on its plans.
Volusion
Founded in 1999, Volusion has enjoyed a long and successful presence in eCommerce as a leading solution for small and medium businesses.
Volusion cannot compete with Shopify for the number of installations, nor does it have as large a community. However, it is a robust hosted solution backed by regular maintenance and a widely-lauded customer support team. The company also guarantees that the check-out system is secure and safe.
The Volusion platform can also compete with Shopify on customization, offering a range of eye-catching themes to attract and convert customers.
BigCommerce
At the larger end of the market, BigCommerce is a significant Shopify competitor. It is a complete solution that is more feature-rich than the Shopify offering – especially where B2B eCommerce is concerned.
BigCommerce helps users build their store and get their products listed on popular networks such as Amazon, eBay, and Facebook. The company has also released a WordPress plugin, allowing merchants to sell their products with a focus on content. Importantly, this gives BigCommerce access to the highly popular WordPress CMS.
While it has not yet attained the popularity of Shopify or Shopify Plus, BigCommerce has grown rapidly in recent years and has attracted a significant amount of funding.
Magento 2
Magento was the popular choice in eCommerce platforms before Shopify and BigCommerce even existed.
It is a cloud-based, open-source platform with an impressive list of capabilities. Magento is fully integrated with Adobe Experience Cloud, enabling simpler content creation and analytics management.
The company also caters to the needs of B2B eCommerce, incorporating features such as large order requisition lists, company account access sharing, quote requesting, and quick ordering.
A key strength of Magento 2 is that it is underpinned by a loyal and devoted following of developers. This makes it ideal for businesses who have unique or unusual content-driven commerce needs.
Key takeaways:
Although Shopify enjoys significant market share, it is nonetheless part of a dynamic industry full of worthy and emerging competitors.
Leveraging the immense popularity of WordPress, WooCommerce is the preferred interface of choice for store owners who want a reasonable level of control.
BigCommerce is also a more feature-rich offering than Shopify that leverages the power of B2B commerce. In recent years it has been funded to grow rapidly.
Shopify is an e-commerce platform that enabled over 2 million merchants in 2021 to commercialize their products. While Shopify works with a subscription-based businessmodel, it makes most of its money via merchant services, which are additional services provided to merchants. The company generated over $5.6 billion in revenue, of which $1.5 billion (almost 27% of total revenue) was from subscriptions and $4.1 billion (more than 73% of total revenue) from merchant solutions.
While Merchant services drive most of the revenue for Shopify, in reality, subscriptions have a much larger contribution margin. Indeed, in 2022, on $5.6 billion in revenue, merchants’ services generated $1.6 billion in gross profits. On $1.49 billion in revenues, subscriptions generated over a billion dollars in gross profits. In short, subscriptions have a low cost of revenue compared to merchant services. Thus subscriptions carry a gross profitmargin of over 77%, vs. a gross margin of almost 39% for merchant services.
Shopify was not profitable in 2022, generating over $3.4 billion in net losses. Shopify’s profitability deteriorated in 2022. Indeed, in 2021, driven by the massive wave of e-commerce throughout the COVID-19 pandemic; Shopify had turned to profitability in 2021, generating over $2.9 billion in net income, while it became unprofitable again in 2022.
In just fifteen short years, Shopify has grown from humble beginnings to become one of the fastest-growing eCommerce platforms online. The Shopify eCommerce solution is perhaps best suited to users who desire an easy, flexible and affordable starter solution for their online store. The provider now has upwards of 820,000 stores accounting for 20% of the total market share. However, the continued success of any company in the dynamic digital market is never guaranteed.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
