Online shopping has become a part of daily life for millions of people. Everything is much easier than it was several decades ago, thanks to the internet, from ordering weekly groceries to buying clothes or even selling old ones. And, crucially, thanks to companies like Shopify.
An all-in-one commerce platform, Shopify has managed to harness the potential of e-commerce by helping millions of businesses to create their own simple but powerful online stores rather than selling on a marketplace like Amazon or Etsy.
I’ve always kept a close eye on the e-commerce industry because of its sheer growth potential, but when I looked at my online transactions the other week, I was surprised to find out just how many were from stores powered by Shopify.
The e-commerce industry is changing rapidly. Shopify’s Future of Commerce Report proves this: 40% of consumers say they plan to pay with cryptocurrency next year. The platforms that pay close attention to emerging trends like this and react quickly are most likely to see substantial growth.
In this Shopify competitors analysis, I will compare the biggest commerce platforms to determine which ones come out on top.
The Bottom Line Up Front
Shopify is the leading Saas e-commerce platform in the US and one of the biggest in the world. This industry is highly competitive, and Shopify faces stiff rivalry, particularly from BigCommerce. However, I think Shopify offers the most comprehensive suite of selling tools in an easy-to-use platform.
The global pandemic has accelerated the growth of e-commerce beyond many people’s wildest dreams; it remains to be seen whether Shopify will take advantage of this and maintain its position as the market leader or whether another startup will come along and steal the spotlight.
List of Shopify’s Main Competitors
- Woo Commerce
Shopify Business Strategy
Shopify Inc. is a multinational e-commerce company founded in 2006 and headquartered in Ottawa, Ontario. It provides a suite of tools for online retailers, including marketing, payments, customer engagement tools, and shipping.
Like many startups, the company has an exciting origin story based on the struggles of its founders, Tobias Lutke, Scott Lake, and Daniel Weinand. They planned to launch an online snowboard shop, but they couldn’t get the custom design for their website to work with any of the tools available back then, like Miva and OsCommerce. Instead, they created their platform, and Shopify was born.
As of 2021, Shopify has more than 1.7 million businesses in around 175 countries using its platform. The company’s software-as-a-service (SaaS) business strategy involves attracting new merchants, retaining revenue, and increasing sales to merchants using a subscription revenue model.
There are numerous e-commerce platforms for merchants to choose from, so Shopify has to do two things to attract more customers than its rivals: offer competitive prices and provide a better overall experience with more tools and features.
Shopify’s pricing is as follows:
- Basic – $29/month – includes two staff accounts, basic reports, up to 77% shipping discount, and up to 4 inventory locations
- Shopify – $79/month – includes five staff accounts, professional reports, up to 88% shipping discount, and up to 5 inventory locations
- Advanced – $299/month – includes 15 staff accounts, custom report builder, up to 88% shipping discount, and up to 8 inventory locations
The plans above include sales channels, an online store, a point-of-sale system, and 24/7 support. You can try Shopify for 14 days; this freemium model is extremely attractive to potential customers.
According to BuiltWith, among all US websites that use e-commerce technologies, Shopify has a market share of 31%; it is the biggest e-commerce platform in America. Globally, Shopify’s market share is 21%.
Shopify went public in 2015, with shares trading at $28. Six years later, at the end of 2021, shares were trading at an astounding $1,500 following the global pandemic, which meant many businesses had to start selling online when they could no longer open physical stores.
Now Shopify is well established as the leading omnichannel e-commerce platform; the company focuses on increasing merchants’ value through strategic acquisitions. In 2022, Shopify completed the acquisition of Deliverr for $2.1 billion, intending to provide an end-to-end logistics platform.
Shopify’s total revenue for 2021 was $4,611.9 million, an increase of 57% compared to the previous year.
Shopify Competitors Analysis
Shopify competes with other companies like BigCommerce and Volusion in the e-commerce industry.
BigCommerce is a NASDAQ-listed SaaS platform that provides commerce tools for merchants, including search engine optimization, online store creation, marketing and security, and hosting. It was founded in 2009 in Sydney, Australia, and its headquarters are in Austin, Texas.
BigCommerce is used in over 150 countries by over 60,000 small to enterprise-sized businesses, including well-known brands like Ben & Jerry’s, Skullcandy, Vodafone, Sony, and Molton Brown. It is the world’s second-best e-commerce platform, after Shopify.
Like Shopify, BigCommerce uses a subscription revenue model with a freemium option to draw customers in. You can claim a 15-day free trial before you start paying. The following plans are available for small to medium-sized businesses:
- Standard – $29.95/month – benefits include an online storefront, mobile responsive website, built-in blog, and real-time shipping quotes
- Plus – $79.95/month – benefits include customer groups and segmentation, abandoned cart saver, persistent cart, and stored credit cards
- Pro – $299.95/month – benefits include Google customer reviews, custom product filtering, and custom SSL
Enterprise businesses must get in touch directly for a bespoke quote.
In 2018, BigCommerce announced a partnership with Goldman Sachs. Sachs led a $64 million growth equity investment, with backing from existing investors GGV Capital, General Catalyst, and Tenaya Capital. BigCommerce hopes to use this extra funding to improve the customer experience, allowing merchants to do more online without spending more.
Internet Retailer named BigCommerce the fastest-growing platform serving the top business-to-consumer stores in North America; the company is willing to invest a lot of time and money in becoming the most powerful B2B e-commerce platform.
Further proof came in 2022 when BigCommerce acquired BundleB2B, a tech company that provides next-level B2B functionality for BigCommerce users. Strategic acquisitions are a cornerstone of BigCommerce’s business plan.
In 2021, BigCommerce reported a 44.3% increase in revenue compared to 2022, ending the year with $219.9 million.
Magento is slightly different from the companies I’ve discussed because it is an open-source e-commerce platform written in PHP, a general-purpose scripting language. It was released in 2008, and the second version came out in 2015, which included the following changes:
- Security and performance improvements
- Enterprise-grade database scalability
- New file structure offering easier customization
- Modular code base structure
- Rich snippets for structured data
A US-based private company, Varien Inc. designed and distributed the original software. The code has been downloaded more than two and a half million times; it has been used to create over 150,000 stores. In 2019, $155 billion of goods were sold using Magento-based systems.
In 2018, Adobe acquired Magento for $1.68 billion to fill an obvious hole in its Experience Cloud. Today, Magento is known as Adobe Commerce. It gives merchants intelligent workflows, extensive integrations, and a foundation to grow seamlessly. For Commerce Pro pricing, you have to contact Adobe.
Adobe has achieved record revenues in its digital experiences segment since this acquisition, seeing a 5% increase year-on-year in 2020 to $826 million.
In April 2021, Magento held a 2.32% market share in global e-commerce platforms, according to Statista.
WooCommerce is another customizable open-source e-commerce solution that comes in the form of a plugin specifically for WordPress. It was launched in 2011 by WooThemes, a WordPress theme developer that hired two developers from Jigowatt, Mike Jolley and James Koster.
The software is written in PHP and is compatible with Windows and Unix-like operating systems.
WooCommerce prides itself on being “the most customizable” e-commerce platform and offers a 30-day money-back guarantee if users aren’t satisfied. Like WordPress, it is free to use, so the only costs you have to cover are related to setting up a website and domain hosting.
The software offers numerous benefits and features, including:
- Unlimited products
- Built-in blogging
- Unrestricted customization
- Countless themes
- Over 800 extensions
- Built-in payment processing from top providers
- Free shipping
- One-click refunds
- Email templates
Given that the software is free, you may wonder how WooCommerce makes money, and the answer is that the company sells additional plugin extensions and add-ons. For example, if you wanted to add an Elavon Converge Payment Gateway to your site, you’d have to pay $79 a year.
WooCommerce’s business strategy focuses primarily on designing and acquiring new extensions to generate revenue. For example, in 2020, the company acquired MailPoet, a WordPress newsletter management plugin. It is free for up to 1000 subscribers, after which paid plans start at $8/month.
WooCommerce’s annual revenue is around $28 million.
Volusion is a privately-held Texas-based e-commerce selling platform and website builder. It was founded in 1999; since then, the platform has gained more than 180,000 customers.
Impressively, Kevin Sproles – Volusion’s founder – was just 16 when he created the company. He started by offering web consulting services to e-commerce clients until he eventually came up with a pre-packaged, all-in-one solution.
Key features of the platform include:
- Customizable layouts
- Category pages
- Product display options
- In-house design services
- HTML/CSS editor access
Volusion’s business strategy focuses on building a team of expert employees who can help SMBs generate revenue and grow rapidly by creating easy-to-use software that does everything in one place. Like Shopify, Volusion opts for a subscription revenue model with a freemium option to attract potential customers. The pricing is as follows:
- Personal – $35/month – includes $50k annual gross merchandise volume (GMV), one staff account, 100 products, online-only support, and 1.25% platform transaction fees
- Professional – $79/month – includes $100k GMV per year, five staff accounts, 5000 products, online and phone support, and 0.65% platform transaction fees
- Business – $299/month – includes $400k+ GMV per year, 15 staff accounts, unlimited products, priority support, and 0.35% platform transaction fees
Much of Volusion’s growth has come about due to successful funding rounds. In 2014, the company raised more than $35 million to help launch its new cloud-based e-commerce platform specifically designed for enterprise users, Mozu.
A year later, Volusion completed another financing round, resulting in an additional $55 million to hire more employees, improve its software, and expand its headquarters.
After a period away from the company, Kevin Sproles returned as CEO of Volusion in 2016 and decided to sell Mozu in an attempt to boost profitability. Today, the company focuses solely on SMBs.
In 2022, Volusion hit $9.3 million in revenue.
Sellfy is an e-commerce platform designed for creators. It was founded in 2011 with headquarters in Riga, Latvia.
Over 60,000 people rely on Shopify to sell their products – including physical, digital, subscription, and print-on-demand items – and they have earned more than $100 million in revenue. The company’s mission is “to empower creators from around the world to earn a living doing what they love.”
Sellfy values simplicity above all else, and the platform simplifies otherwise complex tasks, allowing users to scale up their online businesses. Unlike many of its rivals, Sellfy focuses primarily on small businesses and individual sellers.
Combining an initial freemium offering – a 14-day free trial – with a subscription revenue model, Shopify offers lower prices than many rivals and even includes a free (but comparatively limited) option.
- Free – $0/month – includes up to 10 products, print-on-demand products, and physical products
- Starter – $22/month – includes up to $10k in sales every year, unlimited products, subscription products, digital products, email marketing, and the option to connect your domain
- Business – $59/month – includes up to $50k in sales every year, store design migration, remove “Sellfy” branding, cart abandonment, and product upselling
- Premium – $119/month – includes everything in business, plus up to $200k in sales per year, priority support, and product migration
Sellfy is still a startup business, so funding has been a crucial part of its growth story so far. The three investors who have provided funding are Startup Highway, Sten Tamkivi, and Toivo Annus.
Another critical pillar of Shopify’s growth strategy is affiliate marketing. Creators, bloggers, and marketers are encouraged to sign up for the company’s affiliate program, which offers payment for bringing in new sellers.
This excellent marketing strategy highlights Sellfy’s potential to become a much bigger e-commerce platform. Though it doesn’t pose a significant threat to Shopify, I think Sellfy is a business to keep your eyes on, especially regarding the creative e-commerce niche.
Shopify SWOT Analysis
You can learn about Shopify’s strengths, weaknesses, threats, and opportunities in the SWOT analysis below.
- Cloud-based infrastructure
- Culture of innovation
- Large merchant base
- Leading e-commerce platform
- Strong growth trajectory year-on-year
- Easy to use
- 24/7 customer support
- Global reach
- Good brand recognition compared to rivals
- A high price point may drive some customers away
- Difficult to set up at first
- Not as customizable as some other platforms
- History of net losses before 2020
- Data security concerns regarding the SaaS model
- The pandemic has accelerated the move to digital commerce – more businesses want to sell online
- The consumer trend is toward online shopping and away from in-store shopping
- More acquisitions could further secure Shopify’s position as the industry leader
- Smaller and emerging markets could drive growth
- Privacy laws change frequently and vary from one country to the next, making Shopify’s SaaS model vulnerable to new regulations
- Extensive pressure from competitors who offer similar features and tools
- Cybersecurity is a challenging area, particularly in e-commerce
- Economic uncertainty is rife following the global pandemic; many consumers are less willing to spend money
FAQs – Shopify Competitors Analysis
Question: Which is the biggest e-commerce platform in the US?
Answer: Shopify is the biggest e-commerce platform in America, with a market share of 31%.
Question: Who is Shopify’s biggest competitor?
Answer: BigCommerce is Shopify’s biggest competitor. Shopify’s annual revenue in 2021 was $4,611.9 million, while BigCommerce made $219.9 million.
Question: What is Shopify mainly used for?
Answer: Businesses use Shopify to unify their online commerce into one place, creating a store and selling on the web and mobile.
Question: What makes Shopify unique?
Answer: A few things make Shopify stand out from the crowd, including the wide range of payment gateways it offers and the wide selection of easily customizable themes merchants can use.
In 2021, online retail sales amounted to $4.9 trillion worldwide. Yes, you did read that right. The rise of e-commerce cannot be overstated; the future of business is sure to be online.
With that in mind, Shopify is in an excellent position. It is one of the top global e-commerce companies with millions of happy customers.
To ensure ongoing success, it will have to focus on customer retention in an increasingly competitive market and on attracting new businesses moving online for the first time.