What has happened at Shopify?
Since The Shopify Story came out
Let’s update what has being going on with Shopify since The Shopify Story came out. The last set of developments covered in the book were the early AI innovations (Shopify Magic and Sidekick), Commerce Components and Shopify Collabs. The Shopify Fulfillment Network had also just been turned over to Flexport. To review:
Shopify Magic is a suite of AI features that converts keyword prompts into product descriptions, blog posts, customer replies, article summaries, image adjustments (e.g. changing backgrounds), logos and so on.
Shopify Sidekick is a “commerce assistant” that knows all of Shopify's features and can quickly generate answers and personalized support for a range of tasks
Commerce Components gives enterprise companies the ability to customize their stacks by integrating separate Shopify components within their systems (Shop Pay most popular)
Shopify Collabs makes it easier for merchants and creators of online content (YouTubers, bloggers and others) to find each other for the purpose of teaming up to monetize creators’ content.
The Shopify Fulfillment Network was turned over to Flexport for a 13% stake in the company and an agreement to work together to maintain the Shopify Promise of timely deliveries.
Here, then, are the updates from where the manuscript left off.
June 2023
Shop Pay is made available to enterprise retailers not on Shopify. The checkout has been rated the best at converting shoppers (while taking a percentage cut of transactions), so this small move was likely a big money spinner, especially considering how huge the sales are at enterprise firms.
September 2023
Releases an upgrade to Shopify Audiences that delivers richer insights and connects to more ad channel partners including Snap, Criteo, and TikTok.
Shopify invests in wholesale platform Faire; this makes it easy for Shopify merchants to find wholesale buyers and enables retailers to source from Faire’s network of brands. This could work. It’s not a frontal attack on taming the whole B2B sector, which is a very daunting task but only gives existing merchants on Shopify another option of selling to businesses.
October 2023
Shopify CEO discourages staff from taking on side gigs that divert attention from the company. Was this a subtle hint to Harley that his Big Shots podcast was taking too much of his time? Maybe, maybe not. Another thing: Tobi used to encourage employees to have side business so they had empathy for entrepreneurs — was this then a case of “failure is the successful discovery of something that didn’t work?” And what about side gigs with the risk of permanent injury or death, like Formula One racing — currently Tobi’s passion?
February 2024
Shopify hikes the price of the Shopify Plus plan subscription by 25 per cent. Few companies leave. Shopify Plus was so underpriced beforehand in relation to its value added, that few subscribers are reported to have left Shopify.
May 2024
B2B is one of the biggest growth opportunities in e-commerce, yet it remains largely untapped because the process of selling to other businesses is archaic with lots of manual steps. Shopify has built “B2B on Shopify” to make B2B as easy as B2C. Companies often do both B2C and B2B and they can be run the same dashboard. B2B is not easy but let’s put something out there and see where it goes — like how Shopify Plus got going.
September 2024
Shopify and Roblox form an alliance to bring immersive commerce to Roblox. “We deeply believe that commerce is happening everywhere, and we are making it possible for people to shop wherever they spend time.” Especially where there are a lot of them, we might add. Like an estimated 80 million in the case of Roblox.
TD launches an e-commerce platform aimed at competing with Shopify. In reaction to the news, Lutke tweets “Lol” on X. Elon Musk adds a laughing emoji.
October 2024
Introduces Shopify Finances, which puts all of the financial solutions needed by merchants in one spot on their dashboard (so to be more user friendly than the banks). There is Shopify Capital for loans (a tool covered in the book) plus Shopify Credit, Shopify Balance, Shopify Bill Pay and Shopify Tax.
Shopify Credit: a Visa business card with 3% cashback on eligible purchases and flexibility to pay full balance in a month or over time as a percentage of sales
Shopify Balance: a free business account that allows merchants to get paid as soon as the next business day, and earn compounded interest on funds
Shopify Bill Pay: gives merchants flexibility to pay business bills how they want whether or not a vendor accepts that form of payment.
Shopify Tax: automates filing and remittance of sales tax returns
February 2025
Shopify reports result for Q4 (and whole year of 2024). Jason Lemkin, a SaaS organizer and venture capitalist, sums up the Q4 results thus: the Q4 quarter records 31% year-over-year growth revenue, 22% free cash flow margins and a 12% share of U.S. e-commerce market (up from 10% since the pandemic), The 31% growth in revenues was the strongest quarterly growth in three years: “That’s acceleration at scale,” Lemkin observes. “It’s just stunning to see this sort of growth at this scale.” He also pointed out that the biggest contributors to growth came from Shopify’s initiatives outside of its B2C small- and medium-business stronghold in North America, particularly international markets (+33%), POS offline offering (33%) and B2B commerce (140%).
March 2025
CEO Kaz Nejatian posts at the end of the month on X: “Over the last month, we’ve launched Shopify Payments in: Mexico Poland Norway Lithuania Hungary Estonia Croatia Slovenia Latvia Malta Greece Cyprus Bulgaria Liechtenstein Luxembourg Gibraltar.” With innovation and implementation rates like these, perhaps Shopify will be able to offset the drag from tariffs and macroeconomic environment.
April 2025
On April 2, the U.S. announces a broad set of tariffs on imports, starting with a 10% on nearly all countries and also “reciprocal” tariffs ranging from 11% to 50% on several dozen countries. Mexico and Canada are exempt from the reciprocal tariffs because tariffs had previously been imposed on their exports (excluding those that were compliant with the USMCA trade agreement reached during Trump’s first Presidential term). There were also sector tariffs placed on steel and other materials. Eliminated was the de minimis exemption allowing duty-free entry for shipments under $800 from China. A crash in stock markets is triggered by the tariffs announcement but the market recovers over the coming months as the impact of the tariffs are either minimal or lagged and still to be fully felt.
A memo from Tobi Lütke to Shopify employees is leaked wherein he says staff are expected to demonstrate why they can’t use AI to get a task done before requesting more staff and resources; it is a “fundamental expectation” that employees embrace AI in their daily work because it has multiplied productivity for those who have used it. “I’ve seen many of these people approach implausible tasks, ones we wouldn’t even have chosen to tackle before, with reflexive and brilliant usage of AI to get 100X the work done,” writes Lütke. So this is how Shopify is producing growth in revenues and earnings without hiring more people. Also improve profit margins when costs don’t rise as much as revenues.
Initial news of OpenAI and Shopify forming a partnership to link Shopify’s merchant database to ChatGPT so users will be able to shop and make purchases of goods from within the AI agent itself. Shopify wants to be in this space as part of its longstanding strategy to expand onto “surfaces” where Internet users congregate, especially when search on the Internet shifts away from engines like Google to generative AI tools. A rather significant development this seems to be.
May 2025
Shopify rolls out the “AI Store Builder,” a generative AI tool that creates online stores with just a few keywords. Automating the store setup process significantly reduces the time and effort required and highlights the potential for Shopify’s steady stream of innovations to produce growth capable of offsetting adverse macroeconomic forces and government policies (e.g. tariffs).
Shopify has released its own MCP server, the first to do so. MCP servers facilitate interaction between AI models and external tools or data sources. It’s Storefront component is for searches, queries, and checkout on individual stores while the Global Catalog component permits searches across all merchants. There is still some uncertainty if this MCP server takes hold as other entrants come out with their MCP servers.
Shopify joins Nasdaq 100, with its shares popping +13.7% on the day of announcement, as index funds that cater to passive investors now need to add Shopify to their basket of stocks; future inflows from passive investors into these funds should create ongoing demand for Shopify’s shares but if withdrawals occur, especially during a bear market, Shopify’s stock could face additional selling.
Change made to how developers are compensated for the apps they make for the platform: the annual exemption from Shopify’s cut on the first $1 million of earnings from an app is replaced with a lifetime exemption of $1 million. This should let Shopify report higher earnings.
June 2025
Shopify dodges a bullet with the Federal Court’s dismissal of the Canada Revenue Agency’s request for Shopify to turn over data and information on its Canadian merchants going back 6 years. No doubt many online merchants are not disclosing their true tax liability and this rarely discussed factor is one of the reasons why online e-commerce platforms like Shopify’s are growing in popularity. For now at least, this source of growth remains in effect, although the CRA’s shot across the bow may have a chilling effect.
Shopify announces that it has partnered with Coinbase and Stripe to give Shopify merchants the option of accepting payment in USDC, a stablecoin pegged to the U.S. dollar. Shopify merchants can already take Bitcoin, Ethereum and other cryptocurrencies as payment but Lütke figures stablecoins will be better for shoppers since they don’t fluctuate in value (and can be converted into local currencies). USDC can be used to make payments without a bank account, and to encourage use, Shopify will provide 1% cash back on purchases. But how stable are stablecoins? In 2022, stablecoin TerraUSD collapsed and sparked a crash.
July 2025
Market-research firm, Research and Markets, releases a 264-page report on the e-commerce platform market, titled: Ecommerce Platform Market. The price ranges from US$5,000 for a single user to US$10,000 for enterprise users. But the press release provides a nice succinct summary, highlights of which are:
The e-commerce platform market for 2025 is estimated at US$9.1 billion, and is expected to rise to US$16.5 billion by 2030, for a CAGR of 12.7%
Major players in the global e-commerce platform market include Shopify, eBay, Etsy, Square, BigCommerce, Amazon, Adobe, Wix, Oracle, Squarespace, SAP, Salesforce, VTEX, Trade Me, WooCommerce, Store Hippo, Lightspeed, OpenCart, Volusion, PrestaShop, Shift4Shop, FastSpring, and Nuvemshop
The e-commerce platform market is driven by rising Internet penetration, smartphone usage, consumer preference for digital shopping, and technological advancements (in AI, cloud computing and data analytics), omnichannel retailing, personalized shopping, scalable platforms and cross-border trade tools.
The fastest growing solution provided by the platforms is expected to be the checkout and billing as they adopt advanced billing tech such as automated invoicing, digital wallets, Buy Now Pay Later and multi-currency payment
The fastest growing geographic segment is deemed to be Asia Pacific (China, Japan and South Korea), leading the world in the adoption of cloud computing, Internet of Things, data analytics, augmented reality and virtual reality.
August 2025
Q2 results spark a +21% spike in stock price. Revenue of US$2.68-billion is up 31 % from last year (delivering the largest beat on consensus forecasts in two years) and Q3 revenue is guided above analysts’ consensus estimates. Free-cash flow margin is 16%. “Shopify saw broad-based momentum, with continued market share gains and no impact from tariffs, wrote RBC Dominion Securities analyst Paul Treiber in a client note. “Shopify’s increasing scale and rapid pace of innovation, in our view, improve investor visibility to long-term growth and suggest continued upside surprises . . . .” As for the elimination of de minimis exemptions, only 4% of merchant sales are at risk. One analyst declared: “We also see SHOP well-poised to benefit from the emerging trend of AI agent providers embedding more agentic commerce features, which could expand its [total addressable market].”
On CNBC, Harley Finklestein says free cash flow in Q2 was US$422 million, “so that’s 11 consecutive quarters of positive free-cash flow and eight consecutive quarters of double-digit, free-cash flow margin.”
The spike in Shopify’s stock price pushes its market capitalization to $270 billion on the TSX, surpassing the Royal Bank of Canada and making it once again Canada’s most valuable company.
The spike leaves the stock just 15% below its all-time high in 2021, nearly recouping all of the 75% decline over the six months after the all-time high.
AI Agents will become a common way for people to shop, says Tobi on X, so Shopify is officially launching three tools for developers that make it as easy as possible to embed e-commerce into their apps, websites and AI. The tools are:
Checkout Kit (embed commerce widgets and checkout in agents and chat)
Shopify Catalog (product search across millions of merchants)
Universal Cart (shop from any store, anywhere, in one cart).
“The reach that these three new features bring Shopify merchants are unprecedented,” wrote Paul Drecksler, editor of the e-commerce newsletter Shopifreaks. “It will be very difficult for merchants who want to tap into multiple “non-Amazon channels” to avoid [signing up with] Shopify moving forward. No other e-commerce platform offers anything like this.”