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Shopify adds Mars, touts 21% revenue growth in 2022

The ecommerce software company is focusing on enterprise and offline commerce.

a shopify bag on a table
(Photo via Shopify)

Shopify isn’t growing as fast as it was during the pandemic ecommerce boom, but it is still growing.

After skyrocketing in 2020 and 2021, the Canadian software company in 2022 became synonymous with an ecommerce pullback amid economic tightening and a return to stores. Yet the end result was still a year of expansion.

On Wednesday, Shopify shared the following results for 2022:

  • Revenue grew 21% from 2021, reaching $5.6 billion
  • Gross merchandise volume increased 12% to $197.2 billion
  • Share of overall U.S. ecommerce: 10%

To be sure, the revenue gains are not as large as the 85% growth in 2020 and the 57% growth of 2021. Given the slowing growth and the $1.2 billion acquisition of Deliverr, Shopify also swung to a loss of $822.3 million in the process, compared with income of $268.6 million in 2021.

But the results nevertheless show that Shopify still has room to expand.

Businesses operate differently as the economy changes. That means a company’s priorities may look different during times of economic tightening than they did during the boom times.

In many cases, this is painted as a priority on growth vs. profitability. When capital is easy to obtain and investment is flowing, as it was over the pandemic years, companies prioritize differently. But the environment also changes where a company focuses.

Shopify was long known for providing the software to help emerging businesses start and run ecommerce. Now, the company is touting growth among enterprise businesses and in-store retail as it focuses on efficiency in 2023.

Only last year, Shopify was known primarily for "arming the rebels." Now, a major piece of news from Wednesday’s earnings call was an announcement Shopify is now providing ecommerce for Mars.

“This global agreement will pave the way for more Mars brands to build and scale their businesses on Shopify and is a positive signal for others in the industry as Mars joins the ranks of other large CPG brands that are already using Shopify, including Heinz and Nestle,” Shopify President Harley Finkelstein told analysts Wednesday. “Our commitment to making commerce better for businesses of all sizes is only growing.”

Black and Decker, luxury brands like Sergio Rossi and department store retailer Giant Tiger were also among the new additions to Shopify Plus in the fourth quarter.

This comes as Shopify started the year by launching Commerce Components, which allows enterprise brands to choose features of Shopify and add them to the stack. Mattel is an early adopter of this product.

Meanwhile, GMV for offline commerce, which takes place in stores, was up 40% in 2022. It comes after the company rolled out a revamped in-store hardware system that enables mobile checkout and connects with ecommerce operations, called POS Go. In the fourth quarter, Todd Snyder, Tecovas and Viori added stores that are using the company's hardware.

Shopify has built for economic shifts. Executives said they are accustomed to working to respond to this moment, while preparing for what’s coming next.

“Pre-COVID, you saw us operating with a particular efficiency, but also a particular eye on growth,” Finkelstein said. “During COVID, when things shut down, we went to work to help merchants move online. We also simultaneously during COVID went to work on building the greatest point-of-sale product because we knew at some point, post-COVID, stores are going to reopen. And once stores did reopen, we went hard in replacing all of those legacy systems with ours. So I think we’ve always operated well in any environment.”

The company will also have an eye on profitability in 2023. Internally, that will lead to more focus on efficiency. It’s what this time calls for, and that’s different from the boom times. Such swings are inevitable, but both can contribute to strength over time.

“Profitability is a consequence of growth and efficiency combined over time,” CEO Tobi Lütke said.

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