Shopify’s President Explains Why He Doesn’t Consider Amazon a Competitor

In a recent interview, Shopify President Harley Finkelstein made a few interesting comments. The most important issue he addressed, God knows why, was to tell the world that his company does not consider Amazon to be a competitor.

That’s rather strange, even if Amazon is a glorified marketplace, while Shopify is more like a direct to consumer business. However, they are doing basically the same thing, i.e. selling stuff online and allowing 3rd party merchants to use their platform (Amazon has its own line of products).

This interview comes in the aftermath of a standout year for both Amazon and Shopify, as 2020 will be remembered by internet historians as the year when e-commerce became the new normal.

Shopify grew its revenue by almost 90 percent last year (86% actually), which reached 2.9 billion, as well as GMV, gross merchandise volume, which rose by 96 percent (almost doubled), to $116 billion.

Shopify President Harley Finkelstein was quoted as saying:

“We view our role as the global entrepreneurship company. We don’t only want to help existing entrepreneurs. We want to create new entrepreneurs”.

Finkelstein mentioned that every 28 seconds or so, a new merchandiser makes their first sale on Shopify, which is kind of cool. Shopify merchants contributed with  $307 billion in global economic activity in 2020, and, funnily enough, according to Harley, if Shopify were on online retailer (which it is not, right?), it would make for the second-largest behind Amazon in the United States. Which is not.

Because Shopify doesn’t consider itself to be an online retailer dixit Harley, nor a direct competitor to Amazon.

“I think there will be a place for many of these big marketplaces to buy commoditized products that you want to get within 24 hours.

Those are very different types of buying behavior and also very different types of objectives: Am I buying something that I want and I’m going to cherish and enjoy, or am I buying something that I need because I’m out of detergent?” 

said Finkelstein, and he added that he views Shopify’s DTC business model to be superior to Amazon’s, because merchants selling the products they create on Shopify have more detailed information about how they work. Right…

He also said that he thinks that both types of e-commerce models can coexist (peacefully?), as they serve different purposes. He finished the interview by saying that old brick and mortar stores are going the way of the Dodo. Well, sort of:

“That’s not to say that there is not going to be room for curators or department stores.

But I do think that if curators and department stores want to exist in the future and stay relevant, they’re going to have to add a disproportionate amount of value beyond just distribution.Having a physical store is not enough to justify it.” 

We will be happy to hear your thoughts

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