In this article, you will learn:
Shopify is a leading provider of essential internet infrastructure for commerce. It offers effective tools to start, grow, market, and manage a retail business of any size. Thus, Shopify, through its platform and services offers a great shopping experience to consumers, ensuring that it makes commerce better for everyone.
That’s because, from the very beginning, its mission has been to level the playing field for merchants by lowering barriers, simplifying operations, and leveraging scale to give merchants all they need to compete globally.
Shopify’s remarkable performance during the last quarter of 2023 and the entire year of 2022 is evidence of the resilience that merchants have showcased during the period. Despite persistent macroeconomic challenges, the Shopify merchants succeeded in growing sales and using more of Shopify’s tools to run their businesses.
However, elevated inflation and caution around consumer spending will continue to impact the business of Shopify merchants in the current year.
In this article, we are going to explore the current state of Shopify in terms of financials, customer base, merchants’ performance, conversion rate, users, and stores’ performance across the world. Besides this, we are also going to look at Shopify’s current projections and expectations about financial trends that may impact its financial condition and results of operations.
How To Set Up A Shopify Store?
How to Set up Shopify Store for Dropshipping?
Shopify Statistics 2023
- Gross Merchandise Value (GMV) or the total dollar value of orders facilitated through the Shopify platform, net of refunds, and inclusive of shipping and handling, duty, and value-added taxes, increased 12% to $197.2 billion, relative to 2021, up 16% on a constant currency basis.
- Gross Payments Value (GPV) or the amount of GMV processed through Shopify Payments grew to $106.1 billion, which accounted for 54% of GMV processed versus $85.8 billion, or 49%, for 2021.
- Total revenue increased 21% to $5.6 billion, relative to 2021, up 23% on a constant currency basis. Within this, Subscription Solutions revenue grew 11% to $1.5 billion, and Merchant Solutions revenue grew 26% to $4.1 billion, up 28% on a constant currency basis.
- Shopify’s Monthly Recurring Revenue is $116 million, up by 10% compared to the subsequent year.
- Gross profit in dollars grew 11% to $2.8 billion in 2022, compared with $2.5 billion for 2021.
- Gross margin was 49.2% compared to 53.8% in 2021, reflecting a greater mix of lower margin Shopify Payments and Deliverr revenue.
- Operating Loss for 2022 was $822.3 million, or 15% of revenue, versus income of $268.6 million, or 6% of revenue, for 2021.
- Shopify incurred net losses of $3,447.2 million for the year ended December 31, 2022.
- While Shopify generated net income of $2,914.7 million in 2021 and $319.5 million in 2020, it also incurred net losses of $124.8 million in 2019 and $64.6 million in 2018.
- Adjusted operating income for 2022 was $6.1 million, or 0.1% of revenue, compared to adjusted operating income of $718.0 million, or 16% of revenue in 2021.
- In a 2022 company-wide employee survey, four out of five respondents recommended Shopify as a great place to work.
- The total external revenues for 2022 from North America were $ 4.06 billion, from Europe, the Middle East, and Africa (EMEA) were $ 917 million, from the Asia Pacific (APAC) were $ 553 million, and from Latin America were $ 63.9 million.
- As of December 31, 2022, Shopify had approximately 11,600 employees and contractors worldwide.
- Shopify’s closing share price on the New York Stock Exchange (“NYSE”) from January 1, 2022, to December 31, 2022, ranged from $23.64 to $139.19.
- In 2022, Shopify launched Frontier, an advanced market commitment, alongside Stripe, Alphabet, Meta, and McKinsey Sustainability with the objective to purchase a combined $925M of carbon removal by the end of 2030.
- On July 8, 2022, Shopify completed the acquisition of Deliverr, a leading fulfillment technology provider based in San Francisco, California for a cash consideration of $1.2 million and $9,774 in Shopify Class A subordinate voting shares. In connection with the transaction, a further $0.3 million in restricted shares, RSUs, and stock options were issued and were being accounted for as stock-based compensation as they were related to post-combination services.
- On July 20, 2021, Shopify completed the acquisition of software company Donde, a Delaware corporation, and its subsidiary Donde Mobile R&D Ltd. With this acquisition, the Company added engineering talent to expand its research and development capabilities. The Company acquired 100 percent of the outstanding shares of Donde in exchange for a cash consideration of $50,687.
- Last year Shopify processed $79.5 billion in order value.
- Shopify has a workforce of more than 7,000 people.
Shopify Merchant Statistics
- The large majority of Shopify merchants are on subscription plans that cost less than $50 per month.
- 55% of Shopify Merchants were from North America, 25% from Europe Middle East, and Africa, 15% from Asia Pacific, Australia, and China, and 5% from Latin America (Mexico and South America).
- The 2022 annual revenue of merchants who joined the Shopify platform during the pre-2020 period was around $3500 million. Likewise, the 2022 annual revenue of merchants who joined the Shopify platform in 2020, 2021, and 2022 was around $700 million, $1300 million, and $300 million respectively.
- In 2022, Shopify processed an average of 165.3 million orders per month.
- During the 2022 Black Friday Cyber Monday shopping weekend, Shopify served 75.98 million requests per minute to its commerce platform at peak leading to $7.5 billion in merchant GMV.
- Shopify currently has merchants in more than 175 countries and the company expects to continue to expand its international operations and penetration in international markets in the future.
- In 2022, 66% of the orders in Shopify merchants’ shops were placed from mobile devices.
- Currently, the USA accounts for 50% of the total Shopify merchants with 875,000 merchants at present. Then, Europe, the Middle East, and Africa account for 25% of the total Shopify merchants with 437,282 merchants at present. The Asia Pacific & China account for 15% of the total Shopify merchants currently with 262,460 merchants. Canada accounts for 6% of the total Shopify merchants currently with 105,136 merchants. Finally, Latin America accounts for 4% of the total Shopify merchants with 70,111 merchants at present.
Shopify App Store Statistics Or Shopify App Statistics
- On December 31, 2022, more than 10,000 apps were available in the Shopify App Store.
- Currently, there are 28,359 Shopify domains running Shopify Plus.
- 6,444 different vendors have published 10,207 apps in the Shopify App Store.
- Top Shopify apps, ordered by number of installs, across all stores are as follows: 25.6% of Shopify stores have installed the Product Reviews Shopify app, 20.2% have installed the Geolocation Shopify app, and 17.0% of Shopify stores have installed the Shopify Inbox Shopify app.
- Over 7000 applications are available in the Shopify App Store to help businesses customize their Shopify stores.
Data Source: Store Leads
Shopify Conversion Rate By Industry
- Overall funnel conversion rates range from 1% to 4%.
- Accelerated Payment Methods carry up to 50.4% conversion uplift, that is, 50.4% of the conversion success depends upon the use of Accelerated Payment Methods. Likewise, Device Type carries up to 7.7% conversion uplift which means 7.7% of the conversion success depends upon the type of device that the consumers use. Then, Simplified Checkout Flows carry up to an 18.9% lift in total checkout sessions started.
- Industries whose average overall conversion rates are likely to exceed 3% include software; media; business and industrial; and food, beverage, and tobacco.
- Industries whose average overall conversion rates are likely to be 1% include home furnishings.
- Customers are much more likely to complete their purchases when they shop from desktop devices as compared to mobile devices. There is a 23% overall uplift in conversion rate on desktops versus mobile devices.
- 45.2% of the customers are likely to purchase through a mobile device and 55.7% are likely to purchase through a desktop.
- The impact of the device type on the conversion rate diminishes if one isolates the impact of the device type by minimizing the impact of all the other factors. In such a case, as the Average Order Value (AOV) increases, the conversion advantages associated with desktop devices begin to diminish. There is a 7.7% overall uplift in conversion rate on desktops versus mobile when the AOV is between $0 to $50. However, when the AOV increases to above $1000, there is just a 2.4% overall uplift in the conversion rate.
- As the overall revenue grows, the conversion rates also rise. The lower funnel conversion rate stands at 42.7% when the overall revenue is between $0 to $50,000. As the revenue rises above $10 million, the lower funnel conversion rate rises to 52.8%.
- However, the conversion rates are negatively correlated with the AOV. The lower funnel conversion rate stands at 47% when the AOV is between $0 to $50. As the AOV rises $1000, the lower funnel conversion rate falls to 32.30%.
- Of those who used social media to drive traffic, 85% of the Shopify store owners used social media integrations whereas the remaining 15% did not install one. Likewise, of those who used e-mail marketing to drive traffic, 67% of the Shopify store owners used e-marketing integration whereas the remaining 33% did not install one. Then, of those who used reviews to drive traffic, 34% of the Shopify store owners used reviews integration whereas the remaining 66% did not install one. Finally, of those who used user experience to drive traffic, 39% of the Shopify store owners used an integration whereas the remaining 61% did not install one.
- Shopify stores that install only social media integrations tend to have lower revenue. Additional store revenue for shops with only social media integrations was -7% when they had an AOV of less than $50. Likewise, the additional store revenue for shops with only social media integrations was -6% when their AOV was more than $750.
- Shopify stores that install social media integration along with email marketing or user experience integrations tend to have increased revenues. Additional store revenue for stores that installed social media and email marketing integrations was up 10% when the AOV was less than $50. This percentage increased to 11% when the AOV was more than $750.
- Carts that contain more than five to ten items tend to result in demonstrably higher conversion.
- When paired with AOV, carts that hold a high monetary value and a large number of items can see a conversion increase of as much as 200% above baskets with the same AOV but only one or two items.
- Checkouts increase when the product detail page offers a direct path to checkout. If the store’s product page offers a direct path to checkout and the AOV is above $750, the number of checkouts increased by 18.9%. If the store’s product page offers a direct path to checkout and the AOV is between $0 and $50, the number of checkouts increased by 8.6%.
- A simplified checkout process can increase the number of checkouts that get started by upward of 18%.
- Coupon code fields can lower conversion rates by as much as 30%. This is true even in the case of high-value purchases, although fewer stores offer discounts as AOV increases. Discount code fields do not have a strong impact on conversion when AOV is high.
- Use of payment methods including Meta Pay, Amazon Pay, PayPal, Shop Pay, Apple Pay, and Google Pay in North America, as opposed to offering a guest checkout experience that lacks any accelerated payment method, can increase lower funnel conversion rates by upward of 50%. Not only does using accelerated payment methods lift conversion by as much as 50%, but simply offering them as an option can increase conversion.
- Shop Pay’s presence in the conversion flow generates a conversion lift of approximately 5%. Likewise, a buy now, pay later (BNPL) option seems to boost traffic for stores whose average order value exceeds $50, while stores with $1 million or more in revenue are likely to see spending increases.
- Shopify stores with Front-End Customization appear to have higher conversion rates than those with back-end customization only.
- Loyalty Customization tends to yield the highest uplift on lower funnel conversion. Stores with AOV below $200 can see a lift of 4% to 6% in lower funnel conversion by implementing a loyalty program.
- Customization has less impact on the smallest e-commerce sites but produces a notable lift in lower funnel conversion for larger stores, those with revenues of $10 million or more. Most high-revenue stores have at least one customization in their checkout flow. Apart from loyalty customization, other customizations that demonstrated lower funnel conversion uplift include address validation, input validation, insurance customization, and chat customizations.
- Simply customizing a checkout flow does not seem to generate a lift in conversion across most stores. However, a lift in lower funnel conversion is observed for stores with at least one customization and $1 million in revenue.
- Improved speed at every step correlates with higher conversion rates across most industries. Faster time to Interactive (FTI) positively correlates with total conversion rate but yields less impact in lower funnel conversion rate.
- There is a significant increase in the conversion rate when customers can complete the full checkout process in less than 90 seconds. If the process takes longer, the lower funnel conversion rate may decrease by around 47% on average.
- Every second of delay in Time To First Byte (TTFB) decreases overall conversion by around 0.14%.
- More than 95% of sellers that use custom-built platforms have annual revenues in excess of $100 million and this holds true across all AOV groups. However, a custom platform is not necessarily the right strategic choice for every business.
- Custom-built solutions, on average, underperform leading external commerce solution conversion rates. The overall custom-built conversion rate was 2.77% as compared to the external commerce solution conversion rate which stood at 2.94%.
- For a store with annual revenue of about $100 million and 53 million unique customer sessions, a lower funnel conversion rate improvement of only 1 percentage point can generate an incremental $6 million per year.
Data Source: BCG
Shopify eCommerce Market Share
- Shopify’s market cap as of August 2023 is $75.42 billion.
Data Source: Demand Sage
Shopify Store Stats
- Currently, there are 2,180,740 live stores running on the Shopify platform.
- Shopify is used in over 175+ countries globally.
- The USA is Shopify’s biggest market and the United Kingdom is the second biggest market.
- Shopify stores increased 44% year-over-year and 8.8% quarter-over-quarter in 2023 Quarter 2.
- 23.6% of Shopify stores sell Apparel products, 10.1% sell Home & Garden products, and 8.6% sell Beauty & Fitness products.
- 46.3% of Shopify stores are in the United States, 7.6% are in the United Kingdom, 5.7% are in Canada, and 5.0% of Shopify stores are in Australia.
- 47.5% of Shopify stores use Instagram to engage with millions of consumers, 35.3% use Facebook, and 8.6% of Shopify stores use Pinterest.
- 96.3% of Shopify stores have unknown employees, 1.9% have 1 – 9 employees, and 0.7% of Shopify stores have 10 – 24 employees.
- 29.9% of Shopify stores sell 1 – 9 different products, 17.7% sell 10 – 24 different products, and 13.4% of Shopify stores sell 25 – 49 different products.
- 98.9% of Shopify stores use Cloudflare CDN, 56.6% use PayPal Express Checkout, and 55.7% of Shopify stores use Apple Pay.
- 6.8% of Shopify stores use USPS, 4.3% use UPS, and 2.9% of Shopify stores use FedEx shipping carriers.
- 22.2% of Shopify stores use the most popular dawn theme, 10.5% use the second most popular debut theme, and 3.8% use the third most popular refresh theme.
- 69.7% of Shopify stores have a .com domain, 2.6% have a .co.uk domain, and 2.4% of Shopify stores have a .com.au domain.
Data Source: Store Leads
Shopify Customer Statistics
- Shopify merchants will have over 700 million buyers in 2023.
- Around 649 million people made a purchase from a Shopify store in 2022 alone.
- There are approximately 2.14 billion people shopping online as of 2023.
Data Source: Demand Sage
Shopify User Statistics
- Shopify stores get over 3 million daily active users in 2023.
Data Source: Demand Sage
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