What originally started out as a snowboarding shop ended up becoming one of the top three e-commerce innovations of our time with high mobile optimization and overwhelming organic reach. Yes, we’re talking about Shopify. With over a million merchants on its platform today, it has been proving itself as a worthy contender to Amazon, which has about 2-2.5 million merchants worldwide.In this blog post, we analyze how Shopify’s merchants are distributed by Product Category, Web Traffic, and Web Sales.There are over 1.2 million merchants worldwide using Shopify and some 957,000 are in the US (Source: BuiltWith). PipeCandy’s estimates show that About 22% of all eCommerce merchants in the US - or 913,000 merchants - use Shopify. Of these, about 300,000 merchants are significant (non-seasonal businesses with average web traffic > 50K visitors)We analyzed a representative sample of 54,000 merchants to see how the Shopify merchant base is distributed by Product Category, Web Traffic, and Web Sales.
A quarter of Shopify’s merchants in the US sell Apparel and Accessories. Combining these merchants with those categorized under Style and Fashion, we see that merchants selling ‘any and all things Fashion’ dominate with a 32% share of the platform. Food & Beverage and Sporting goods follow, albeit with a share of less than 10%.
About 34% of the merchant base belongs to long-tail categories such as Gift & Novelty, Pets & Pet Supplies, Stationery Products, etc. - categories that aren’t significantly large enough to be called out separately.
We’ll consider Monthly Unique Visitor count as Web Traffic (i.e.how many unique visitors came to the website in a given month). As we can see below, 98% of Shopify merchants have a MUV count of less than 100,000. This means that all the popular eCommerce websites on Shopify that we read and hear about in the news, fall within the 2% cohort; they have at least 100,000 unique visitors visiting their site every month.
The majority of Shopify merchants are drop-shippers and seasonal businesses. They also sell extremely niche products that can stifle traffic growth. Once you’ve maxed out your niche in every which way, it calls for a change in strategy like category/channel expansion. Moreover, in an era where Casper has 174 copycats, it goes without saying that every long-tail merchant could be dealing with its own 174 or whatever the magic number is in its category, competing for quality traffic!
An overwhelming majority of Shopify companies make less than $1 million USD in online revenue. This distribution mirrors that of the eCommerce sector in general, where at least 90% of the companies make less than $1 million in revenue. Conclusion In the wake of the coronavirus pandemic, Shopify, like other companies, has taken its fair share of beating in the markets. However, it seems to have built moats that could keep its business competitive and thriving for the times to come. At least 70% of DTC brands are hosted on Shopify (and that truly matters now for two reasons - DTC has graduated from being a mere fad to a mainstream business model and given the Covid-19 situation, consumers are seeking more locally-made brands, which are USPs typical of DTC brands), over 100,000 merchants use Shopify’s offline POS system (which today competes with the likes of Square) and its fulfillment network is being built at a time when Amazon and Walmart have both announced one-day deliveries.If you are a Shopify merchant or want more information on the Shopify ecosystem, PipeCandy provides time-series data, analytics for brand perception, and competitive benchmarking. We will also be posting similar blogs for other platform technologies such as Magento, BigCommerce, and Stripe, so be sure to keep an eye out!
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