Shopify announced that it’s pushing into business-to-business sales to unlock more opportunities than its existing model. The company is aiming to overcome a steep decline in its stock price.
The company is introducing new tools in an attempt to fend off competition from Amazon and revive its fortunes after a bruising stock sell-off. The tools are meant to make it easier for merchants to sell in bulk and integrate with enterprise resource planning software used to handle procurement.
“It is an opportunity for us to expand”, Harley Finkelstein, Shopify’s president, informed the Financial Times. “Not just go after direct-to-consumer businesses, big and small, but to now go after wholesale business, which is a huge untapped market.”
Facing an uncertain future
Canada-based Shopify has been keen to herald growth opportunities after a year in which its shares have plummeted 75 percent, wiping off more than $130 billion in market value and erasing the gains it made as one of the coronavirus pandemic’s biggest winners.
Its decline has been sharper than e-commerce rivals such as Amazon. Inflation, supply chain uncertainty and the effect of Apple’s privacy changes on targeted advertising have hit the direct-to-consumer brands that use Shopify. According to its most recent earnings report, Shopify’s overall sales growth slowed as well.
“For a while, Shopify could do no wrong”, said ecommerce analyst Juozas Kaziukenas from Marketplace Pulse. “The broader industry was hoping Shopify would compete directly with Amazon. But obviously, that hasn’t happened yet, and it’s unclear if that will ever happen.”
“I think certainly we were this pandemic story because of the value we added when stores were shut down”, Shopify’s Finkelstein commented. “But I think people are missing that we are also this recovery story.”