Shopify’s too nice to brag, so we’ll do it for them.

In the past week, 4 of the largest North American e-commerce companies — Amazon, Shopify, Etsy and eBay — reported another quarter of record revenues and user growth.

But today’s focus is Shopify, whose stock has grown over 28x in the past 5 years — the highest amongst the e-commerce giants. Shopify sells the technology that helps merchants set up and run their e-commerce websites.

Everybody loves a Canadian growth story

Shopify didn’t just become Canada’s most valuable company by accident. They can thank COVID, which pushed e-commerce forward by 5 years. In the second quarter of 2020, e-commerce made up 16.1% of total US retail sales, up from 11.8% in the first quarter. Here’s a look at their third-quarter results:

• Total sales grew to $767.4m, up 96% from the same quarter last year.
• Gross merchandise volume (GMV), the total sales from the stores on Shopify, increased to $30.9b, up 109%.

Shopify’s growth, powered by Tim Hortons

Shopify needs to do one job really well to succeed — help its merchants sell more. The more they sell, the more money Shopify makes. They’ve got big plans to make that happen:

Partnerships… Shopify’s taking social commerce very seriously — in 2020 alone, it partnered with both Facebook and Pinterest to turn social media posts into shoppable ads. On Oct. 27, it partnered with TikTok to give Shopify users the ability to post shoppable videos on TikTok.

(Catch up: What’s the hype around social commerce?)

Fulfillment network… In 2019, Shopify announced their plans to launch its own fulfillment services to help merchants store and deliver goods — reducing shipping costs and delivery time. This will position them to directly compete with Amazon, whose third-party selling services (i.e. fulfillment and shipping services) made over $20b in the third quarter.

For investors… Shopify could be de — wait for it — lightful

Despite all 4 companies recording record sales, all 4 of its stocks fell after the announcements. There’s a big concern surrounding e-commerce investments — whether consumers will buy less online once the pandemic is over.

But Shopify’s ambition goes beyond relying on COVID for growth. It has its eyes set on the $53b e-commerce logistics space. Its plans of expansion into fulfillment services will require a heavy investment on infrastructure but if successful, this could become a large area of growth for Shopify’s sales.