Shopify came knocking and Amazon is answering the door
Earlier this year we noted that Shopify was taking market share from Amazon in the form of would-be users utilizing Shopify for ecommerce hosting, payments, and fulfillment. In 2021, Shopify merchants recorded $175 billion in combined Gross Merchandise Volume (GMV). This is around 45% of the volume moved on Amazon Marketplace ($390 billion). And this gap is closing. In 21Q4, Shopify GMV reached nearly half of Amazon's marketplace volume (48%).
Shopify is doing a better job of attracting and supporting third-party sellers, as the scatterplot above demonstrates. But Amazon's recent announcement of "Buy with Prime" suggests it's stepping up its game. Buy with Prime will allow Prime members to receive the Amazon experience when shopping directly from merchant online stores -- from free delivery to free returns. This makes sense, as Amazon Prime growth rates have slowed in recent years. You can also see this reflected in Amazon Prime Purchase Intent (mentions of downloading and signing up for Amazon Prime), currently pacing -8% lower YoY.
In contrast, consumer mentions of utilizing Shopify Pay are on the rise. Shop Pay brand mentions are currently pacing for +53% YoY growth in 22Q2.
If Amazon can successfully win over small and medium sized businesses AND court additional Prime subscribers, it could be a major win for the company...