Covid-19 is irreversibly accelerating the growth of e-commerce

Toronto: The Canadian “Shopify” platform, which relies on a model that is in contrast to that prevailing in “Amazon”, has become one of the biggest beneficiaries of the crisis after many companies resorted to it, which the epidemic forced to rely on e-commerce.

Shopify, which was established in Ottawa 15 years ago, allows you to create an e-commerce site with a few clicks. It was already booming with the number of stores exceeding one million in late 2019 and the epidemic made it more popular.

“The world of commerce as we imagined it in 2030 has become a tangible reality in 2020,” says Shopify chief Harley Finkelstein, noting that “the Covid-19 epidemic has accelerated the growth of e-commerce irreversibly.”

In light of the general isolation, e-commerce has witnessed a strong growth this year. And the sales of the giants of the sector, led by “Amazon”, increased dramatically. Also, many brands that did not have electronic stores fought in the Internet during the epidemic crisis.

The number of stores created under Shopify, a popular platform among contractors, increased by 71% in the second quarter of the year compared to the previous year.

Tariq Al-Barwani is one of the newcomers to the platform. The Plenty tea cafe he founded had remained open at the start of the lockdown in March. The situation quickly became intolerable as the number of customers dwindled, so he was forced to close his shop in May.

In the same month, he opened an online store on “Shopify” with the support of a program launched by the municipality to help small businesses affected by the crisis achieve a digital transformation.

“It took a week. It is easy to understand if you become familiar with the use of the Internet,” says Tariq Al-Barwani.

Tobias Lutke, a German who moved to Canada out of love, wanted to sell snowboards on the Internet. In 2006, he co-founded “Shopify”, which has achieved great success away from Silicon Valley.

The registered stores on this platform, which is easy to use, increased from 150,000 in 2014 to more than a million in 175 countries in 2019, and it has become, in the eyes of many independent merchants, a viable alternative to “Amazon”.

Finkelstein believes that, in order for business to flourish, it should not be confined to the hands of some, but rather available to the largest possible number of parties. We need more small shops, brands and contractors, otherwise similarity will be our fate and we will buy the same products in the end.

Arming the rebels
Lootke was more blunt in his statements. Last year, he said on Twitter that “Amazon seeks to establish an empire. Shopify is trying to arm the rebels.”

The founders of the “Cotton” clothing brand did not hesitate to take the lead in “Shopify” when they launched their brand in 2015.

They only had ten thousand dollars in their pocket at the time, and they were unable to use the services of an agency. Unlike sales platforms such as Amazon, “Shopify allows them to tell their own story and communicate directly with customers,” says McKinsey Yates, who co-founded the brand.

If “Shopify” seeks in the first place to attract independent contractors, it has also succeeded in attracting well-known brands by helping them to break free from technical restrictions and establish direct relationships with customers without intermediaries.

And in recent years, Pepsi, Unilever, Mondelez and other brands have opened stores on Shopify. Heinz for ketchup and Lint for chocolate followed suit during public isolation. Celebrities like Kelly Jenner and Victoria Beckham are not afraid to turn to the platform to promote their products.

And the sales achieved by the platform are increasing season by season.

This prosperity translates into profit for investors. Shopify shares have risen three times on the Toronto Stock Exchange and the New York Stock Exchange since March. It has recently become the most valuable Canadian company on the stock exchange, with a capital of approximately 170 billion Canadian dollars.

Chris Sylvester, an expert on e-commerce, admits that Shopify is really a “great company,” but believes that its value is “exaggerated,” especially since it is not known yet what will be the fate of shopping on the Internet after the epidemic subsides.

As for Tariq Al-Barwani, he confirms that the sales of his online store exceeded expectations, but they are still below those he was achieving in the cafe, indicating that he needs to adapt to his new virtual life in the absence of direct interaction with customers that he misses so much.