May 22, 2020

The pandemic heats up the ecommerce race to take on Amazon

Shopify wants to mom-and-popify online retail, but is an alliance with Facebook unholy?

Watch your back, Bezos.

The pandemic transformed the ecommerce landscape, and this week, we got some very loud signals about how much has changed: Online sales at big chains like Walmart (up 74%) and Target (up 141%) went gangbusters in Q1.

But one of the biggest beneficiaries of the online-shopping boom is Shopify, the Canadian company whose northward-bound stock price is making some people wonder whether Bezos ought to look over his shoulder.

Shopify wants to mom-and-popify online retail

Last month, Shopify rolled out a new app (called Shop… ’cuz if it ain’t broke, don’t fix it) to connect customers to nearby merchants who use the company’s ecommerce platform. (There are 1m+ of them.)

Bloomberg says the company’s going big in other ways, too: A tool called Shopify Balance will let business owners track bills and pay expenses.

Then came the big reveal: Mark Zuckerberg announced Facebook Shops, which lets business owners sell inside of their Facebook and Instagram footprints.

The announcement led to the kind of hiccup only an over-caffeinated trader could love: Shopify’s stock price tanked on the heels of Zuck’s announcement, only to surge even higher when Tobias Lutke, Shopify’s CEO, calmly joined the chat.

But is an alliance with Zuck unholy?

The Wall Street Journal projected that it’s Facebook — not necessarily Shopify, just one of several partners in the Facebook Shops launch — that would end up eating Bezos’s lunch. Or maybe a bite of his breakfast octopus.

The tech writer and investor Om Malik asked: “Why do I fear that in the end Facebook will suck Shopify dry of its utility and become a competitor?” The ‘book, he wrote, “gobbles and destroys everything in its way.”

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