This Could Be the World's Largest E-Commerce Company in 20 Years

 This Could Be the World's Largest E-Commerce Company in 20 Years

The coronavirus epidemic provided a significant boost to e-commerce platform Shopify (SHOP -6.23 percent) in 2020. Its price has declined as a result of the growth-stock sell-off, but this retailing behemoth still has a sizable market share and space for expansion.

Motley Fool contributors Matthew Frankel, CFP®, Jason Hall, and Tyler Crowe discuss Shopify's tremendous growth, competitive advantage, and one potential hurdle in this video clip from "The Rank," which was taped on February 14.

Frankel, Matt: Right now, Shopify is perhaps the most important stock on my watch list. I mean, because we talked about it today, I can't buy it for a little bit, but it's the one I think I'll eventually start working in. It's the one I really wish I hadn't missed out on. I feel like I'm getting a second opportunity. As we speak, it's approximately half of what it was at its peak. It will release its most recent findings on Wednesday. Keep your eyes peeled for it. Shopify's goal is to give all-inclusive solutions to e-commerce firms, particularly smaller ones. They are not just focused on small enterprises, but they also give an online shop platform, which is their main business.

They also provide payment processing, with Shopify Payments; shipping services, with Shopify Shipping; and a business loan service, with Shopify Capital, which just much every focus tech firm these days has. You have Square Capital and all of these small-business establishments. Then there are some additional services. Subscription prices for their core business range from $29 per month to upwards of $2,000 depending on the needs of the organization. The wonderful thing about this is that Shopify's revenue will grow in tandem with the businesses. If a company grows from a small business to a large business, Shopify's revenue increases from $29 per month to whatever amount the company eventually spends. Recently, growth has been quite significant. Shopify is the most popular online store.

Frankel: It's bigger than Walmart, for sure. They have an e-commerce market share of 8.6 percent. Amazon's is 39, so I don't think they'll catch up anytime soon. But it's still a fairly impressive figure.

Hall: I believe that in 20 years, this company will be the largest e-commerce company in the world.

Frankel: That is something I agree with. They intend to gradually expand their capacities. Take a look at just one slide from their most recent investor deck. That left column, where it says "core," is what they currently offer; in the medium term, they hope to expand it internationally. Most of their business is still domestic; I believe Shopify is Canadian, so the majority of their revenue is North American; they retail POS, so they are thinking of a point-of-sale system for actual brick-and-mortar retail, similar to the hardware that Square sells.