Like two mismatched cops assigned to work the same case in a cheesy action movie, Shopify and Amazon have set aside their differences and become frenemies.
What happened: Shopify and Amazon have struck a deal to let US-based Shopify merchants use Amazon’s “Buy with Prime” feature—offering Prime perks like free shipping and next-day delivery—on their own websites, via an app in Shopify’s app marketplace.
It’s a stunning turn of events—when Amazon launched the feature last year, it was seen as a direct challenge to Shopify (which in turn told users not to use it).
Why it matters: The market has reacted well to the détante. Shopify shares were up 10.69% yesterday following the news and are up over 84% on the year as the company reigned in costs, rejigged its business priorities, and projects sturdy revenue growth.
- Earlier this year, Shopify also gave up on its quest to challenge Amazon with its own fulfillment service after selling its logistics biz and warehouse robotics operations.
Bottom line: Even after a no-good, horrible, very bad 2022 that saw pandemic-era gains erased, Shopify is still Canada’s third-largest company by market cap and one of the foremost economic drivers of Canada’s main stock index.—QH