Shopify just announced Q1 results and there was a lot to digest. In line with Amazon and MercadoLibre - consumer eCommerce still seems an area of strength in this economy.
In any case - apart from the massive amounts of news on the Shopify announcement front, there was considerable reference to Global-e related interest in the earnings call…
"Moving on to going global. One way we are driving greater penetration internationally is by making it easy for a merchant to sell globally as they do locally. During the quarter, approximately 15% of total GMV were cross-border as our primary products that were rolled out last year, Markets and Markets Pro, continue to gain traction. Markets makes it simple to localize the buyer experience for each region a merchant sells to by enabling local currencies, which is a key determinant for consumers, offering local payment options and collecting duties and taxes at checkout to create total cost clarity. All of this can be customized in one place in the Shopify Admin with ease. When we layer on the functionality of the translate and adapt app for our merchants who use markets, our data showed meaningful improvements to conversion rates.
Shopify Markets Pro, a fully integrated merchant of record solution is built on top of Markets. Markets Pro is a great option for merchants looking to scale to new markets quickly without having to navigate international tax compliance or fraud while tapping into best-in-class international shipping options with duties prepaid. Our team has continued to make improvements to Markets Pro and is on track to fully roll out the product in the U.S. this summer and then to the U.K. later this year. We’ve seen considerable interest in Markets Pro and believe there’s a lot of opportunity for us with this product to further unlock our merchants’ ability to reach more consumers around the world."
" Brian Peterson
So I’m curious on the timing of the decision to sell the logistics business. Why now? And maybe how should we be thinking about any changes that you may have in kind of the build by partner decision about future growth initiatives?
Brian, Harley, I’ll take the question. Look, I think Shopify, unlike a lot of technology companies, we actually do partnerships really, really well. If you sort of go back, I don’t know, 8 or 9 years ago, so when we first decided to go into the payments business, we deeply partnered with Stripe and was able to go to market much faster with an incredible product. And that partnership obviously continues. We’ve done the same thing with companies like Affirm when we felt that they were doing buy now, pay later better than anyone else globally on the cross-border commerce side of things. So I mean, Shopify, going back to what you heard today and Tobi’s letter, but our main mission, our main quest versus side quest, we do something in the world better than anybody else, which is building commerce software."
Ant here… (I think the transcript meant to capture Global-e)
" Darren Aftahi
Your comments about 15% cross-border GMV, could you just kind of speak to kind of Markets and Markets Pro and kind of how fast that GMV cross-border metric has been growing, kind of where you see that going in the next 12 months?
I’ll take that call. Look, in both – Shopify Markets is getting a lot of traction. In Q1 alone, around 100,000 merchants use either Markets or Markets Pro feature to make a cross-border sale. We launched Markets Pro into early access in September. We see more and more merchants that are adopting it now. But if you think about the business models of our merchants, U.S. merchants on average are selling to 14 countries. And so going back to your comment made earlier about Shopify being the essential retail operating system for our merchants, if we want to be the center of their business, which we are, we need to enable them to sell across every single geography. And obviously, there are some geographies that they have not sold to yet. Making that easier is really, really important.
In the case of Markets Pro, what’s really interesting is that it really introduces this idea like a merchant of record solution. So you think – you have things like tax and duty compliance, but you also were able to provide, obviously, compliant with local laws, chargeback protection. And then if they want to go sort of one step further, of course, they can always go and leverage globally as well. But we saw – but in last year, we saw about $28 billion in cross-border sales. In Q1 of this year, we saw, as you mentioned, 15% of total GMV. And so we think the international – the ability to help our merchants sell internationally easier with greater speed and efficiency is going to be very important. But also, remember that it also allows us to bring on new merchants from new geographies. Obviously, the majority of our merchants are still in our core geographies. But every time we make it easier to sell across the entire globe with all those features that I just mentioned, more and more merchants join Shopify and that also is a huge benefit to both these products."
Ant here (again I think this is meant to say Global-e).