In the morning news on May 16, Beijing time, it is reported that both Shopify and Amazon have recently announced a new feature,That’s the estimated arrival time for packages to be delivered to consumers, and the battle for consumers between the two e-commerce giants has intensified.
In late April, Amazon launched its Buy With Prime service, which allows online sellers to offer Prime-related services such as fast shipping, free shipping and free returns to customers who shop on sites other than Amazon.com.
And just last Thursday, Shopify launched a similar service alongside its earnings report. The new service, called Shop Promise, will provide shoppers with expected deals from merchant stores and other sales channels such as Google, Facebook and Instagram. delivery date.Shopify also offers package tracking through its Shop app, keeping users informed about the status of their packages and their current location.
The speed at which Shop Promises can be deployed depends on how quickly the Shopify Fulfillment Center Network (SFN) is built, as this new feature is only available to U.S. merchants using SFN. Shopify confirmed plans to buy asset-light fulfillment startup Deliverr for $2.1 billion, a deal Shopify said would help them accelerate its plans. Still, Shopify CFO Amy Shapero confirmed on the earnings call that SFN won’t reach sufficient scale until late 2023 at the earliest. In contrast, Amazon has offered shipping on the Shopify program for over a decade.
The launch of the new service marks the intensification of competition between Shopify and Amazon, which have long had a rivalry that is rarely mentioned.
Dan Romanoff, senior equity research analyst at Morningstar, said: “Amazon will certainly take note of this move by Shopify, the latest in a series of moves to improve its own competitive position.”
On Thursday’s earnings call, William Blair analyst Matthew Pfau asked Shopify CEO Tobi Lütke if Buy With Prime would affect Shopify’s overall business or its more specific delivery plans. To that question, Lütke’s answer lasted three minutes, downplaying the potential impact of competitors and Buy With Prime on Shopify.
Shopify does not currently allow merchants to use other checkout options on their online store, such as Buy with Prime. But Lutke said on the earnings call that Shopify would be more than happy to integrate Buy With Prime into its service, just as it has done with Meta, Google and TikTok.
A Shopify spokesperson did not respond to a request for comment from the media. The company said Lütke’s comments on the call were his own and that the company still needed to gather details.
In the past, Lütke has targeted Shopify to take on Amazon, the e-commerce empire.
Rick Watson, CEO of RMW Business Consulting, said: “It does in a sense show that Lütke is clearly becoming more mature, and there is no doubt that Shopify’s perception of Amazon has changed. Shopify three years ago , will never ‘ship its troops in the ships of the Amazon Empire’.”
Angelo Zino, senior investment strategist at CFRA Research, said that despite Lutke’s positive reaction on the company’s earnings call, Buy With Prime did “increase the level of competition” for Shopify.
Buy With Prime may not be the last Amazon product that could pose a threat to Shopify. Reports in early April revealed that Amazon has a mysterious team, internally known as Project Santos, whose main mission is to fend off Shopify’s threat to Amazon’s e-commerce dominance.
The launch of Buy With Prime has reportedly sparked a heated debate within Shopify over the past two weeks, with product team members discussing whether to develop tools to allow other merchants to use Buy With Prime.
Shopify’s earnings fell short of investors’ expectations last quarter, while Amazon, Etsy and eBay all showed signs of slowing e-commerce growth. Shopify’s revenue rose 22% year over year to $1.2 billion, compared with analysts’ expectations for $1.25 billion. Gross merchandise sales, or the total value of items purchased through the Shopify platform, rose 16 percent to $43.2 billion, compared with analysts’ expectations of $46.5 billion.
Shares of Shopify fell more than 14% after the earnings report, and have fallen about 70% since the peak of the pandemic in the fall of 2021.
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