Everywhere I look in the news lately, I see headlines about companies “taking on Amazon”. When you look at Shopify's recent acquisitions and investments, Google making big plays to acquire product data, SquareSpace going public, and companies like Wix, GoDaddy, and MailChimp making e-commerce moves — it feels like we're gearing up for the era of Goliath vs Goliath vs Goliath.
Even Jeff Bezos said several years ago that the consumer market will inevitably support multiple Amazon sized retailers and that customers will simply choose which one to pledge their allegiance. (I'm paraphrasing, but that was essentially the sentiment.)
It's been widely noted and accepted that COVID expedited e-commerce growth, however, as a consequence of that, we're seeing consolidation in the industry at an alarming rate. It's no longer enough to be an “e-commerce” provider — now you're required to offer omnichannel “commerce” services to your clients — or fall by the wayside.
On the flipside of the same coin, through the rise of headless commerce and universal APIs, startups and service providers are laser focusing harder than ever on individual layers of the commerce onion — but are inevitably being bought up by the same Goliaths that they sought to bring platform independence from.
Interesting times ahead in the industry. In the meantime, just remember that a Headless Goliath is still a Goliath.
And now, onto the 22nd edition of Shopifreaks newsletter….
1. It's true… Shopify owns a lot of Stripe
Shopify confirmed rumors on that it purchased a $350 million stake in payment processor Stripe, of which Shopify is one of their largest clients. The news sent Shopify's stock soaring almost 5% last Monday and then up by almost 20% towards the end of the week.
Stripe, which describes itself as “payments infrastructure for the internet” is the most valuable private company in Silicon Valley with a valuation of $95 billion, and are considering going public later this year. Shopify and Stripe partnered in 2013 to bring Shopify merchants an integrated in-house payments solution.
Shopify now owns portions of their two biggest payment processing partners — Stripe (for immediate payment processing) and Affirm (for payment installments).
2. Wix acquires dropshipping provider Modalyst
Modalyst connects e-commerce store owners with brands, suppliers, and private label manufacturers. They are used by over 350,000 stores including merchants on Shopify, Wix, and BigCommerce. The company was acquired by Wix for an undisclosed amount.
Co-founder and CEO Jill Sherman said, “Our solution reduces the hassle for merchants to manage inventory, fulfill and ship on their own, while ensuring they are connected with reliable, vetted suppliers who will provide high quality products. This empowers businesses to truly invest in their brand, community and broader strategic goals. We look forward to helping take Wix eCommerce to new heights.”
Technically, the partner integration already existed between Wix and Modalyst. The difference now is that future development will continue under one roof. I'll be curious to see if Modalyst continues to serve all of its integration partners equally, or if they bring exclusive features to Wix merchants.
3. Shop Pay rolls out on Google and Facebook
Shopify will open its payment processor app Shop Pay to all retailers selling through Google and Facebook starting in July for Facebook and later in 2021 for Google. Currently retailers must be Shopify merchants to use Shop Pay, but this move will open up the payment platform to all over the over 1 million merchants who sell on Facebook and Google.
Shopify President Harley Finkelstein said, “Our hope is that this momentum moment for Shop Pay is a step forward to becoming the internet’s preferred checkout, full stop.”
Shop Pay is in a great position to become the “New PayPal”. In other words — a trusted and widely accepted cross-channel payment solution for businesses — a reputation that PayPal long ago lost with its merchants.
With its integration of Shop Pay into Google and Facebook, along with its investments in Stripe and Affirm, Shopify has officially transcended from an e-commerce platform to a payment processor.
4. GoDaddy launches payment processing services
Speaking of payment processing, GoDaddy announced the launch of GoDaddy Payments, a service that allows their clients to process online payments without the use of a 3rd party provider. The service was built using the technology and teams that GoDaddy acquired from Poynt for $320 million in December.
The acquisition of Poynt brought GoDaddy a suite of small business products including payment processing, point of sale systems, and invoicing — which combined with their existing website builders and marketing services — positions GoDaddy to offer its customers a unified online / offline website and commerce platform.
This move is supposed to put GoDaddy in direct competition with Shopify, but from a developer's point of view… it's not much competition. If GoDaddy's e-commerce products are anything like their hosting or website builders, I don't imagine that they'll be in any developer's top running for e-commerce software.
However, developers are only part of the market — and not the one that GoDaddy has historically catered to. GoDaddy notoriously goes after the consumer DIY market, and their biggest advantage is that they often have first point of contact with business owners who register their domains through the company — to which they can then market their hosting, website, and now commerce services.
Even though I'm not a fan of GoDaddy as a developer — they're kind of crushing it, with an estimated full year sales of $3.74 billion for the current year.
5. Guess who's coming to Ecom World Conference?
The world's largest e-commerce event announced that Gary Vaynerchuk (marketer), Harley Finkelstein (Shopify CEO), Christine Chang, and Sarah Lee (Glow Recipe) will be at this year's event June 28-29 to coach attendees on the mindset and methods of the top 1% ecom entrepreneurs and marketers.
The event will be held online this year and will feature over 80 speakers. Tickets can be purchased on their website.
Who's going to be attending Ecom World Conference this year? Hit reply to this e-mail and let me know which speakers you're most excited to watch.
6. eBay is selling their Korean marketplace for $3.6B
Retailer Shinsegae Group's Em-Mart Inc and web portal operator Naver will buy eBay Korea — which is Korea's third-largest e-commerce company with market share of about 12.8% in 2020. South Korea is the world's fourth largest e-commerce market, of which online sales account for 35.8% of the retail market in 2020.
After their CEO got ousted in September 2019, eBay has been downsizing the company. They sold StubHub to viagogo for $4.05 billion in February 2020, and are now in the process of selling their classifieds unit in a deal valued at $12.7 billion.
I'm no fortune teller, but moves like this don't look bright for the future of eBay. After spinning off PayPal into its own company in 2015, and selling off other major assets, what's going to be left of eBay in terms of actual commerce operations? The brand feels more like a holdings company at this point than a commerce platform.
7. Duda raises a $50M Series D
The Israeli company, which offers professional website builder tools exclusively for developers (versus do-it-yourself store owners), now hosts over 1 million websites built by 17,000 developers. $10M of the funds will be used to acquire shares from the company's founders and employees. This was Duda’s biggest funding round to date.
8. SpotOn integrates with Google for online ordering
Restaurant management startup SpotOn is integrating Order with Google which will allow customers to order directly through Google Search and Maps using SpotOn Order. The integration will come at no additional cost for their restaurant clients.
A recent survey conducted by Sense360 indicated that 63 percent of respondents would rather order directly from the restaurant, and companies like SpotOn and Olo fill that technological gap for restaurants, while sidestepping delivery companies like DoorDash, UberEats, and GrubHub which are known to take a big commission.
9. BigCommerce launches Big Open Data Solutions
The toolset will allow BigCommerce merchants to transfer their storefront data to a data warehouse or customer data platform of their choosing. Unifying data from multiple data sources including Facebook, Google, Twilio, etc will allow merchants to create a single customer profile, which will in turn allow them to create the type of personalized customer experiences and targeted marketing campaigns typically only available to much larger stores.
Jimmy Duvall, chief product officer at BigCommerce, said, “We believe our merchants own their data, and should have the flexibility to use the data solutions and tools as they choose to get the results they need… this open data approach ensures that merchants aren’t limited to proprietary analytics tools. They can assemble the technology stack that fits their needs.”
10. What'd I miss?
Shopifreaks is a community effort and I appreciate your contributions to help keep the rest of our readers in the know with the latest happenings in e-commerce. Whenever you have news to share, you can e-mail [email protected] or hit reply to any of my newsletters.
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See you next Monday!
Paul E. Drecksler
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