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Ranjit Mulgaonkar, Founder & CEO, Flatworld Group
For the longest time I wondered when Shopify, the most dominant eCommerce platform would launch their own marketplace. Last week Shopify launched their own AI-driven web-based marketplace that competes directly against Amazon at shop.app/search.
Some facts about Shopify:
Shopify is the second-largest e-commerce retailer in the U.S. if all its merchants were treated as one.
Globally Shopify is used by 4.36 million online stores in 175 countries, 2.6 million stores in the US.
Shopify Plus, a higher end version of Shopify specific to larger brands and large-scale businesses has 32,181 Shopify Plus stores across 175 countries as of 2023 with 18,767 stores in United States.
Over 700 million consumers shop in the stores on Shopify platform generating over $200 Billion in Gross Merchandise Value.
Some of the top brands on Shopify Plus include Kylie Cosmetics, Skims, Sephora, Red Bull, Heinz, WWE, Allbirds, Lindt, Fitbit, Hasbro, Netflix and Tesla.
How is Shopify marketplace different than Amazon?
There are a few differences between Amazon and Shopify marketplace implementations. Amazon sellers list and sell products on Amazon Marketplace and if the seller has a trademark, they get a storefront on Amazon. The consumer can buy individual products from the product listing or by visiting the seller’s storefront. If the consumer clicks on any products within the storefront to buy, they are taken to the individual product listing on Amazon to buy. In other words, Amazon marketplace keeps the consumer within Amazon platform throughout the search, browse and shopping experience.
Products from any Shopify stores are available to any consumer on the web by visiting the individual stores online. The brands can also sell products on marketplaces like Amazon, Walmart, eBay, Etsy and social media platforms Facebook, Instagram, TikTok and Pinterest where Shopify sellers can generate incremental revenue. Shopify marketplaces is an overlay on all the Shopify stores where the consumers can buy products from multiple sellers (merchants) seamlessly in a single shopping cart transaction. The consumer can search, browse and shop across all stores with a unified shopping cart. The consumer can also visit the merchants Shopify store and purchase products from individual merchants. The new Shopify marketplace, Shop AI, incorporates all products sold by stores using Shopify’s ecommerce platform. The user interface contrasts Amazon’s cluttered and busy UI. Its minimalist and simple design will allow shoppers quickly find and purchase products. Shopify is also using AI to provide personalized product recommendations based on customer’s past browsing and purchase history.
The feature that makes it unique and is part of the marketplace’s name is its AI shopping assistant, which appears as a sidebar and can be used to refine the product search. The AI shopping assistant can be turned off if the consumer wishes.
What does this mean?
Even with the marketplace functionality Shopify does not become a retailer but simply an easier way to shop across millions of brands with universal search and shopping cart. On the other hand Amazon is a combination of retail and marketplace since Amazon sells products as a retailer from brands (wholesale) as well as 200 Amazon’s private label brands.
If you’re interested in hosting an online store with Shopify and having your products appear in its new web-based marketplace, their plans start at $5/month, and you can try it out first with a free trial.
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Ranjit Mulgaonkar is founder & CEO at Flatworld Group a full serv ice Amazon Agency that helps brands to be successful on Amazon.
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