Next Year Shopify GMV Will Reach 50% Amazon Third-Party GMV - What's Next?
The Growth Trajectory: Shopify vs. Amazon GMV
By 2036, Shopify will Eclipse Amazon Third-Party GMV. That might seem like a long-time, but it's not.
This happens because Shopify just crossed $236B GMV last year, while Amazon reached $700B (est. Marketplace Pulse) overall, and Amazon 3P GMV reached $480B (est).
Amazon total GMV is growing at about 11% y/y, it's third-party GMV growing at 13%. (Amazon 1P growing at only 6%). Shopify on the other hand is growing at around 19% y/y -- about double Amazon's rate.
Given this, I wondered what it would take Shopify to cross Amazon. The numbers look like this AT CURRENT RATES:
By 2036, Shopify GMV will cross Amazon 3P GMV.
By 2038, Shopify GMV will have eclipsed all Amazon GMV.
Of course by these dates, especially for Shopify, it might be Gross Payment Volume we are concerned about and not GMV
Speaking of, what are some things that are likely to happen by then to make this transition happen faster?
The Changing Landscape: Shein, Temu, and Amazon's Future
On the Amazon side, they could be seeing headwinds.
Well, it's possible the Shein and Temu start threatening Amazon more and more. After all, Chinese 3P sellers make up a huge chunk of Amazon. These companies are already targeting US-based Amazon sellers starting now, and just getting started.
It's not outside of the realm that there is a changing of the guard happening, in a bear scenario. No wonder Amazon is trying to capture off-Amazon GMV (hello Buy With Prime!)
Shopify's Tailwinds: Acquisitions and Payment Domination
These tailwinds include acquiring more companies, and in their sweetspot - payments. An area which Shopify has not yet dabbled in yet. By 2038, it's not outside of the realm of possibility that Shopify could have acquired not only Stripe, Affirm, but also others like Adyen too.
In such a scenario, there are opportunities for Shopify to go "upstream" and "downstream". Despite Shopify's logistics experience, history tells us that going downstream is much easier, however. In other words, Amazon used to pay UPS to deliver its parcels.
Payments. Shopify currently pays Stripe (and others) to process its payments. That % of "owned payment processing" is in fact the number to watch in the next 10 years with Shopify. Outright acquiring or taking ownership-level stakes in Stripe, Affirm, Adyen and others are all on the table.
And this is assuming Shopify doesn't "go upstream" and build its own marketplace, although that is possible too as Advertising, Shop Cash and Shop app, which might become material over that time scale.
Comparing Shopify to PayPal is not really fair -- Shopify doesn't own an independent payment processor like Braintree, etc. Yet. But pay attention because Shopify Gross Payment Volume is growing 3x PayPal, even though Shopify GPV is one-tenth PayPal's $1.5T.
All that said, if you don't think Shopify is building something special, unique and different, you aren't paying attention. And not just in platforms.
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