Amid e-commerce boom, anti-Amazon Shopify takes flight

Shopify saw the number of new stores created on its platform jump 71 percent in the second quarter. (Shutterstock)
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Updated 19 October 2020

Amid e-commerce boom, anti-Amazon Shopify takes flight

  • Founded 15 years ago in Ottawa, Shopify allows businesses to create an e-commerce site in just a few clicks

TORONTO: The pandemic has forced businesses worldwide to pivot online to survive, and many have turned to Shopify, a Canadian company that has emerged as a thriving alternative to Amazon.

Founded 15 years ago in Ottawa, Shopify allows businesses to create an e-commerce site in just a few clicks. Already growing with more than 1 million e-stores at the end of 2019, its user base has exploded.

“The retail world that would have existed in 2030 has really been pulled back into 2020,” Shopify president Harley Finkelstein said in an interview with AFP.

“It feels like the coronavirus disease (COVID-19) pandemic has permanently accelerated the growth of online commerce.”

Amid a lockdown of bricks and mortar stores, online commerce has boomed this year. Consumers have grown accustomed to buying over the internet, and industry giants, led by Amazon, have seen sales rocket.

At the same time, many businesses that did not have a presence or a direct online sales channel took the plunge as the pandemic took hold.

Popular with entrepreneurs, Shopify saw the number of new stores created on its platform jump 71 percent in the second quarter compared to the previous one.

One of these new e-merchants is Tariq Al-Barwani, creator of Plentea, a tea bar in Toronto that remained open in March at the start of the lockdown.

But with only a handful of customers a day, the situation quickly became untenable, forcing him to go out of business in May.

The same month, supported by a municipal program helping small businesses affected by the crisis to go digital, he opened a store on Shopify.

“It took us a week,” he recalls from his living room, overlooking Lake Ontario, where he now works. “If you are used to going on the internet, it is easy to understand.”

Shopify has become a resounding success far from Silicon Valley.

It was co-founded in 2006 by Tobias Lutke, a young German who had moved to Canada for love and designed the software originally to sell snowboards over the internet.

Hailed for its simplicity, it has seen the number of stores on its platform grow from 150,000 in 2014 to over 1 million — in 175 countries — in 2019, asserting itself in the eyes of many independent merchants as an alternative to Amazon.

“For retail to thrive, it has to be in the hands of the many, not the few,” Finkelstein said.

“We need to have as many retailers, as many brands, as many entrepreneurs and small businesses selling, so that we don’t all look the exact same, (and) so we don’t buy the exact same stuff.”

More bluntly, Lutke, now 40, said on Twitter last year: “Amazon is trying to build an empire. Shopify is trying to arm the rebels.”

When they created their clothing line in 2015, the Toronto-based founders of Kotn, a brand that emphasizes traceability, went straight to Shopify.

Shopify is also enjoying growing success with established brands looking to sideline intermediaries who sell their wares and to build direct relationships with customers.


‘The stock market, stupid’ — Trump’s claim is looking hollow 

Updated 29 October 2020

‘The stock market, stupid’ — Trump’s claim is looking hollow 

  • The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency
  • The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost

Before the US election of 1992, candidate Bill Clinton summed up what he saw as the reason he would become president: “It’s the economy, stupid.” He was proved right as voters disowned the economic policies of President George H.W. Bush in their droves to elect Clinton. 

Until the COVID-19 pandemic began to ravage the US economy in March, President Donald Trump would have been able to make the same claim. For the four years of his presidency, the US economy had continued the progress initiated by his predecessor to recover from the 2009 global financial crisis.

By most measures — growth, employment, inflation — the Trump years had been good, and those on the top of the pile had even more reason to be grateful thanks to the big tax cuts he had made a flagship policy.

The pandemic changed all that in the space of a few weeks as lockdown measures shocked the economy. Jobless claims soared to all-time records, bankruptcies and closures affected large swathes of American business, and gross domestic product collapsed. The International Monetary Fund forecasts that the American economy will shrink by 4.3 percent this year.

But Trump could still claim instead that “it’s the stock market, stupid” as a reason he could be re-elected. Mainly because of the trillions of dollars injected into the economy in the form of fiscal stimulus, US share indices had swum against the economic tide.

The S&P 500 index hit an all-time high in September, allowing Trump to boast that under his administration, investors and the millions of people whose livelihoods depended on the financial industry had never had it so good.

Now, it looks as though even that final claim is looking more fragile. For the past couple of days, US and European stock markets have gone into reverse as investors took fright at the rising number of COVID-19 cases and the re-imposition of economic lockdowns in many countries.

Trump might argue, with a little justification, that Wall Street is worried about the prospect of Joe Biden being elected president by the end of next week. Certainly the contender, by definition, is something of an unknown quantity in terms of economic policy.

He is also known to favor some policies — such as tighter regulation on environmental sectors, more spending on health care, and higher taxes for federal services and projects — that have traditionally been regarded as contrary to the philosophy of “free market” America.

In particular, the energy industry is worried about possible restrictions on shale oil and gas production that Biden and his “green” team are believed to favor. However, it should be pointed out that the Democratic candidate has specifically said he will not ban shale fracking, as some environmentalists want.

In any interesting side-story, the state of Texas — one of the biggest in terms of electoral college votes — would seem to have more to lose than any other if the energy scare stories about Biden were true. Yet the contest there between Democrats and Republicans is the closest it has been for decades, according to opinion polls.

The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency and a sign of his deal-doing prowess. If even this claim is denied to him in the final week of campaigning, it would make the uphill battle against the polls even more difficult.

There is a chance that Big Tech might offer some relief. The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost, given that they were the ones largely responsible for the big market gains earlier in the year.

But for Trump, any such respite might be too little, too late. It looks as though Wall Street and Main Street are finally catching up in their gloom, and there is nothing the president can do about it.