The e-commerce platform continued to gain ground in the three months ended June 30, powering sales with a gross merchandise volume of $42.2 billion, up from $30.1 billion a year ago.
Adjusted second-quarter profits shot up 120 percent to $284.6 million, or $2.24 a diluted share, well ahead of the 96 cents analysts projected. (Including $778 million in unrealized gains on equity investments, the company’s net income ballooned to $879.1 million.)
Revenues for the three months ended June 30 increased 57 percent to $1.1 billion. Those gains were made up of a 70 percent rise in subscription dollars, to $334.2 million, as more merchants joined the platform and a 52 percent gain in merchant solutions, to $785.2 million, driven by the increase in sales through the platform.
Shopify’s gains are a reflection of the state of e-commerce since it works with so many brands including Allbirds, Dior, Comme des Garçons and Kith in the fashion space.
In response to questions from WWD on Wednesday, Shopify said higher-end brands are perking up on the platform.
“We’re seeing luxury fashion brands — those with a price point more than $200 — succeed with GMV growth of 66 percent since March of last year,” Shopify said. “Additionally, the apparel and accessories category has seen GMV growth of 65 percent since March of last year, with the number of merchants selling in that category increasing by 83 percent since March of 2020.”
At the recent WWD Tech Forum, president Harley Finkelstein described Shopify as “the world’s first retail operating system,” noting that it would weigh in as the second-largest American retailer online, with about 9 percent of the market.
Sitting at the e-commerce crossroads between brands and consumers has proven to be a lucrative place to be — and a positioning that was only bolstered by the pandemic, which sent more consumers to the web for shopping.
But the junction between brands and consumers is also getting more crowded.
In addition to Farfetch’s bid to fuel the online luxury fashion world, Amazon and, increasingly, Walmart are also looking to help businesses connect.
Walmart, which also works with Shopify, said on Wednesday that it would start offering cloud technology and other services to other retailers using Adobe’s e-commerce platform.
The company told WWD: “Shopify believes commerce should be in the hands of the many and not the few. Democratizing commerce is our mission. We’ve always known that when entrepreneurs and small businesses thrive, we all benefit, and we never compete with our merchants. We have a strong partnership with Walmart and our merchants can easily integrate on their marketplace. It’s not surprising that other players are starting to realize the power of small business, but Shopify was born specifically to empower entrepreneurs to thrive online and wherever commerce opportunities exist — in store, social, etc. We’re going to continue to support the unique needs of our merchants and aspiring entrepreneurs in every way we can.”
Increasingly, fashion e-commerce is a game being played across a growing web of partnerships between big players, like Shopify, Walmart and other tech giants.
“We have long believed that the future of retail is Retail Everywhere,” Shopify said. “That’s why we enable merchants to bring their brands to ever more surfaces where the customers are — including Google, Facebook, Instagram, TikTok, Pinterest and others. Fashion brands are often some of the best examples of merchants leveraging all that Shopify has to offer across multichannel commerce. We see our role as building the essential internet infrastructure for commerce.”
And right now, the company seems to be hitting its stride.
“Shopify fired on all cylinders in our second quarter, keeping our merchants well equipped to seize the opportunities presented in a post-pandemic retail era,” said chief financial officer Amy Shapero. “As consumer spending remained strong, our merchants thrived and extracted more value from our platform, contributing to our rapid growth. We built on our momentum, making significant updates to our platform infrastructure, expanding strategic partnerships and advancing our portfolio of growth initiatives to future-proof the success of tomorrow’s entrepreneurs.”
The company has been building rapidly, making its store fronts more customizable, speeding up check out, expanding its Shop Pay features and building the foundation of its own fulfillment network.
Wall Street is certainly looking for big things from Shopify, which has a market capitalization of about $191 billion — more than Target Inc. ($127 billion) and Lululemon Athletica Inc. ($53 billion) combined.
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