Considering Amazon's potential limitations, it could be advantageous to explore purchasing this unyielding expansion stock as an alternative.
Amazon isn't just a colossal corporation; it's also one of the world's most popular stocks. There's a high chance you've contemplated investing in it or already own shares. And it makes sense, considering its dominance in the e-commerce scene, especially in the Western Hemisphere. According to eMarketer, Amazon controls approximately 40% of the online retail segment, which represents about 16% of the country's total retail spending.
But if you're looking to tap into the future of digital commerce, you might want to consider another player – Shopify. In many ways, Shopify contrasts Amazon. That's what makes it an alluring opportunity.
AMZNSHOP
Amazon not only dominates the online shopping market but also spearheaded its emergence in the late 90s as internet access became commonplace. Consumers adore Amazon, with eMarketer estimating it controls around 40% of the online retail sector. But the sheer size and self-service nature of Amazon pose challenges, including intense competition and the difficulty of cultivating deep customer relationships.
Consumers loved "the everything store," and still do. Market research outfit eMarketer estimates Amazon controls roughly 40% of the online the retailing industry, which accounts for about 16% of the nation's total retail spending, according to numbers from the U.S. Census Bureau.
Enter Shopify, the platform that enables organizations to develop and manage their own e-commerce presence. From digital shopping carts to payment processing to marketing to inventory management, Shopify empowers online sellers to operate independently of massive, impersonal platforms like Amazon. Brands such as Nutriseed, Worldwide Cyclery, and Florivera Skincare thrive using Shopify, providing personalized experiences and authenticity sought by today's consumers.
e-commerce presence. From digital shopping carts to payment processing to marketing to inventory management (and more), this company helps online sellers operate independently of huge, impersonal, and crowded online malls like Amazon. Nutriseed, Worldwide Cyclery, and Florivera Skincare are just some of the up-and-comers that rely on Shopify to sell online. With Shopify, these brands are able provide the personalized experience and authenticity that consumers increasingly crave.
It's no secret that Shopify's growth is compelling. In the final quarter of 2021, Shopify assisted in facilitating sales of $69.7 billion worth of goods and services, an increase of 24% year-over-year. This translates to nearly $2.2 billion in revenue, marking a 26% year-over-year growth since its 2006 inception.
SHOP Revenue (Quarterly) data by
Much like its trajectory since launch, Shopify's growth is far from over. According to market researcher Oberlo, the U.S. e-commerce market will expand at an average rate of approximately 9% annually until 2028. With the significant market potential and increasing awareness among sellers of alternative platforms, Shopify is well-positioned to capture this growth.
YCharts
Amazon isn't powerless in the face of Shopify, though. The e-commerce giant is taking steps to counter the competition, like limiting the copycat behavior of third-party sellers and offering generative AI tools to improve listing management.
Shopify's stock is valued, with a price-to-earnings ratio of over 90 times its projected earnings for 2022 and approximately 70 times estimated 2023 earnings per share of $1.54. This premium price can restrict near-term growth potential while increasing volatility. But Shopify's robust growth makes it an attractive opportunity, and the potential for further growth seems plausible.
also expensive, priced at more than 90 times last year's likely earnings and more than 70 times this year's expected per-share profit of $1.54. This can limit the stock's near-term upside potential, not to mention fuel above-average volatility.
In the face of fierce competition from market giants like Amazon, Shopify distinguishes itself through its focus on personalized brand experiences and entrepreneurship. Shopify's depth and range of offerings enable it to cater to a broad range of client needs. The flexibility and control it offers to businesses to build and manage their own online stores make it an attractive growth proposition. And with the e-commerce market expected to continue expanding at a significant rate, Shopify is well-positioned to capture a significant share.
- If you're interested in investing in the future of digital commerce, considering Shopify might be a wise decision, given its focus on personalized brand experiences and entrepreneurship.
- Shopify's comprehensive offerings, including digital shopping carts, payment processing, marketing, and inventory management, cater to a wide range of client needs.
- With the e-commerce market projected to expand at a significant rate until 2028, Shopify's position as a platform that enables businesses to build and manage their own online stores makes it a promising investment opportunity.
- Despite being priced at a premium, Shopify's robust growth and the expected expansion of the e-commerce market make it an appealing investment, albeit one with potential for volatility due to its high valuation.