Amazon and Shopify battle, emerging markets become the focus

July 10, 2021

Competition picks up speed as Amazon, retail e-commerce platforms, and Shopify are in a triple whammy

I never thought that the competition in the cross-border e-commerce circuit would accelerate so quickly in 2021.

When the industry reaches a certain stage of development, the "black hole effect" in the e-commerce sector will become more and more obvious, either to seize the market or to be swallowed up.

When it comes to the battle of e-commerce platforms, we have to mention the newcomer in 2020 - Shopify, which in addition to surpassing EBAY in sales, has a growth rate and market fervor that is unmatched and has achieved spectacular results in several regions.

The US region is the most important revenue driver for Shopify (66.7% of FY2020 revenue, but growth in the US region was already trending downwards before the outbreak , with all other regions continuing to catch up.

In the first three quarters of 2020, Amazon's North American market segment grew substantially ahead of the international market, but from Q4 2020, the international market growth suddenly caught up with the North American segment, with the international market growing 60.4% year-on-year in Q1 2021, compared to 39.5% year-on-year for the North American segment (as shown in Figure 5), and the North American market growth continued to decline after reaching a high point in Q2 2020.

Over the past five years, Shopify's revenue growth has far outpaced Amazon's in every reported quarter, with LTM EBITDA (earnings before interest, taxes, and amortization for the previous 12-month period) up 99.6% year-on-year compared to Amazon's 41.5%, and Shopify has grown at a compound annual average rate of 63.3% over the past three years, outpacing Amazon's 29.5%.

Statista forecasts that US retail e-commerce revenue growth is expected to slow over time, from 8.7% in 2021 to 2.7% in 2025, with a 5-year CAGR of 3.73% from 2020-2025.

Given the size of the market, the US and European markets remain an extremely important segment for cross-border e-commerce, but most of the future growth will likely come from other overseas markets.

The epidemic has added fuel to the development of the cross-border e-commerce industry, and the competition between platforms has shown that, in addition to walking the walk, we need to keep an eye on external changes and think of danger in times of peace. 2021 is halfway through and, despite some volatility, there are new opportunities in the crisis that require us to "know", "seek" and "use" the development of the market. We need to "know" and "seek", and use the "certainty" of development to counter the "uncertainty" of the outside world.

【Source text: by report】

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