Shopify has warned that the likely absence of a “Covid-triggered acceleration of ecommerce” in the first half of 2022 looks set to impact revenue growth.
Shopify’s total revenue for the 2021 full year reached $4.6bn (£3.38bn) – a 57% increase from 2020. Gross profits rose 61% from 2020 to $2.4bn (£1.77bn).
Fourth-quarter revenues also surpassed analyst expectations, reaching $1.38bn (£1.01bn) compared with estimates of $1.33bn (£0.98bn), according to Refinitiv data.
Despite these results, Shopify warned that its revenue growth would slow down in the first half of this year due to factors such as a slowdown in the ecommerce boom recorded during the pandemic and the removal of government stimulus, as well as rising inflation.
As growth slows, Shopify will also attempt to diversify its business model, moving beyond creating tools for companies to quickly sell online.
It will now invest in its Shopify Fulfilment Network, assisting merchants with logistics and fulfilment centres.
Shopify also aims to operate more warehouses in the US, with the company planning to invest $1bn (£0.74bn) in building a wider fulfilment network.
The business currently has a warehouse in Atlanta where it began fulfilling orders last year and it is currently trialling order fulfilment software with local merchants.
President Harley Finkelstein told Reuters: “We are shifting the network model really to larger capacity hubs and we want to operate more of them ourselves.
“Being able to offer [fulfilment services] to 90% of the US, two-day affordable shipping – that really is the goal.
“The last two years have been extraordinary. We nearly tripled revenue, more than doubled gross merchandise value and the Shopify team, and the number of merchants using Shopify is nearly twice as big as 2019 levels.”
“We are emerging from the sprint of these last two years even stronger and more ambitious since the accelerated leap into digital commerce means we can go farther faster for merchants and buyers alike.”
- Never miss a story – sign up to Retail Week’s breaking news alerts
No comments yet