Shopify reportedly is targeting enterprises as it works to maintain the growth of its commerce platform.
Long focused on helping small businesses set up their online shops, the company has launched a dedicated effort to add bigger companies like its existing clients Reebok, Overstock and Barnes & Noble, the Wall Street Journal (WSJ) reported Wednesday (Nov. 27).
“We’ve built a flexible, scalable platform that powers merchants of all sizes,” Shopify President Harley Finkelstein said in the report.
The company’s effort to add more enterprise customers presents an opportunity to gain steadier revenue and longer-term stability but also requires a dedicated sales team and a long, complicated onboarding process, according to the report.
Analysts interviewed for the report said that Shopify added 16 enterprise customers in the third quarter; that the company has become a serious competitor of companies like Oracle, Adobe and SAP; and that the higher cost of gaining these customers is likely to pay off in the form of sustainable returns.
On Nov. 12, during an earnings call, Shopify reported a 26% increase in revenue for the third quarter to $2.16 billion and a 24% rise in gross merchandise volume (GMV) to $69.7 billion. Net income doubled to $344 million from $173 million for the same period last year.
“These results demonstrate the durability of our business, our multiple avenues for growth and continued discipline of balancing both future growth investment and operational leverage,” Shopify Chief Financial Officer Jeff Hoffmeister said during the call.
Shopify said in a January press release that it would be expanding its enterprise offering in 2024.
The company said it found that two-thirds of enterprises were thinking about upgrading their commerce platform in the next three years and that a similar share said ease of use is one of the top things they value in such a platform.
“That’s why Shopify is the retail operating system behind some of the most trusted brands on the planet,” the company said. “Since our inception, Shopify has powered over a half trillion dollars in global commerce. We drive revenue for millions of merchants in more than 175 countries.”
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