Shopify Inc (TSE:SHOP) has been one of the major stock success stories of 2017. The e-commerce concern has one big problem, however. It has to compete with Amazon.com, Inc. (NASDAQ:AMZN), one of America’s most dangerous companies, in the space. On Thursday the firm announced a strategy to deal with that problem.
eBay Inc (NYSE:EBAY) used to be named in the same conversations as Amazon.com, Inc. but the firm has fallen back and settled into its own niche in recent years. Now, however, Shopify Inc is leveraging the firm’s marketplace to become a more holistic competitor to Amazon.
According to a statement published on Thursday eBay’s marketplace will become integrated with Shopify this fall. It will join the firm’s other sales channels, which actually include Amazon.com, Inc. (NASDAQ:AMZN), as options for the service’s users.
Shopify grows in a tough space
There are few who doubt that e-commerce is going to be a growing area in the coming years, but there are always questions about who is going to succeed in the space. Shopify Inc (TSE:SHOP) is one of the leading growers in the area right now, but it seems a stretch to say that the firm’s success is guaranteed.
So far the firm’s plan seems to be somewhat similar to that of Amazon.com, Inc. . Instead of trying to compete with the other firms in the area, Shopify is partnering with them.
Goldman Sachs has a price target of $96 and a rating of Neutral on Shopify stock. Jesse Hulsing, who authored the Goldman report on the stock, reckons that there could be a slow down in the growth of some of the firm’s new products.
In general Wall Street is cold on Spotify’s chances in the medium term. After the massive increase in price over the last year that’s to be expected, particularly for a firm facing so much competition.
eBay won’t be enough
A partnership with eBay is a nice move for those who use Shopify Inc (TSE:SHOP) , but the firm’s future relies on a whole lot more than giving its vendors some nice options. When the firm was small it could cater to a niche of people who wanted a cost effective way to set up their own store.
Now that it has grown, the firm is battling for every small piece of a margin it can get. Amazon.com, Inc. (NASDAQ:AMZN) is the firm it’s going to be competing for those dollars with. The Seattle giant is doing everything it can to ensure it rules the e-commerce roost.
Right now Amazon.com, Inc. helps Shopify to get merchants onto its website. For the time being at least it’s good for both firms. That could change, however. Amazon gets its e-commerce edge by finding out what people buy and how they buy and eventually competing with its partners. This is almost certainly the future of Shopify stores that decide to get on the platform.
So how then will Shopify distinguish itself in the long term? That’s the question that the firm really has to answer. It doesn’t need to be an Amazon killer, all it needs to do is convince customers that it is able to offer something that Jeff Bezos firm can’t. Given the emporium of everything that Amazon has become, that’s going to be very difficult going forward.