Shopify shares drop after Amazon pushes rival Buy with Prime service to more online merchants
Amazon.com Inc. will expand its Buy with Prime business offering to most online merchants nationwide by the end of the month, and Shopify Inc.’s stock took a hit Tuesday’s announcement.
Amazon’s move will allow more businesses that don’t sell directly on the e-commerce giant’s website to use Amazon’s payment and shipping infrastructure to fulfill orders on their own sites. Expanding the rollout of its Buy with Prime service, which was invite-only last April, will increase competition from similar offerings like Shopify.
Shopify (SHOP.T) shares fell 1.9% on Tuesday. Amazon (AMZN) was up 2.9% on him.
Buy with Prime allows US Amazon Prime members to shop directly from independent online stores that are not on Amazon’s website. Amazon then processes payment, packaging, shipping, and returns for customer orders.
Citing its own data, Amazon said in a release that “shopper conversions” increased by an average of 25% when purchased with Prime. Its conversions, it says, “measure the average increase in shoppers who placed an order over the same time period when purchasing was an available purchase option on Prime compared to when it wasn’t.”
The expansion of Amazon services comes as online retailers cut thousands of jobs amid concerns about the economy and demand throughout the holiday shopping season and the fourth quarter. In his October, Amazon predicted fourth-quarter sales that were below Wall Street expectations.
After a flood of online shopping early in the pandemic, discounts surged online and in stores during the holiday season as retailers tried to clear shelves of items such as clothes, computers and electronics. have moved away from these products last year as prices for basic necessities increased, making it impossible for them to shop for their leisure time.
According to Adobe (ADBE), online product prices fell 1.6% year-on-year in December, marking the fourth straight month of year-on-year declines. These prices rose 1.1% from the previous month.
Over the past 12 months, Amazon’s stock has fallen 44% and Shopify’s stock has fallen 68%. By comparison, the S&P 500 Index has fallen about 16% over that time.
(Closed) Dow Jones Newswire
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