In the new digital economy, consumers and enterprises alike have benefited from the rapid adoption of online commerce. With fintech serving as the backbone of this global revolution, businesses have an easier means to connect with customers who no longer have to travel to purchase goods and services. In 2016, retail e-commerce sales worldwide amounted to a whopping $1.86 trillion, according to Statista. By 2021, the market is positioned to about triple to $4.48 trillion, driven by various factors including the growing popularity of smart devices.
Seattle-based Amazon.com is well-known around the world as a leader in the industry, even pushing into brick-and-mortar with headline acquisitions such as its recent $13.7 billion Whole Foods buyout intended to bolster its e-commerce platform. Amazon is all around us, accounting for over half of the growth of U.S. e-commerce last year with Prime penetrating into nearly half of all households. What many don’t understand, however, is that Amazon and its large cap peers such as Wal-Mart Stores Inc., EBay Inc., and Apple Inc. have a combined U.S. market share of less than 30%, as e-commerce now only represents about 8.7% of all retail sales worldwide. This situation leaves room for a number of players in the space, most notably Shopify, to target the largely untapped and high growth SMB segment.
According to a study by Bigcommerce, the U.S. e-commerce SMB market, comprised of over 46 million merchants, recently surpassed $100 billion, more than Amazon and EBay combined. As e-commerce expands, opportunities exist for players to offer more tailored and comprehensive solutions than tech giants such as Amazon, tapping into a demand for scalable, integrated solutions that help SMBs transact internationally and streamline post-purchase processes. Shopify, whose SaaS product allows anyone to easily build an online store, has seen its share price skyrocket over six times since its IPO on the NYSE in 2015. Independent e-commerce merchants have no shortage of options outside of Shopify, with platform such as Magento and BigCommerce gaining ground as they help SMBs tap into the lucrative online retail space.