Shopify helped generate $307 billion in economic activity last year amid pandemic’s impact on retail

Shopify

Global economic activity from merchants on Shopify reached $307 billion in 2020, according to a new report released by the company (all figures in USD).

The company says its global economic impact, when factoring gross merchandise volume, GDP, employment, and gross value of goods produced, represents a 125 percent increase from 2019. According to Shopify, combined merchant activity on its platform would form the seventh-largest company in the world in terms of revenue.

“Our hypothesis is that all economies depend on entrepreneurs and small businesses to thrive. Over the years, we’ve found this to be true.”

From an employment perspective, 3.6 million jobs were created by Shopify merchants globally in 2020, meaning one in every 1,000 employed adults is supported by a Shopify merchant.

“We’ve been conducting an experiment since Shopify was born,” said Tobi Lütke, Shopify CEO. “Our hypothesis is that all economies depend on entrepreneurs and small businesses to thrive. Over the years, we’ve found this to be true.”

Shopify said in a company blog post that this year’s results demonstrate Shopify’s ripple effect on global entrepreneurship. The numbers also reveal how the COVID-19 pandemic is dramatically changing the face of retail.

In the last year, thousands of retail businesses have been forced to look to online channels to not only stay open, but also stay competitive. Shopify has clearly been one of the biggest beneficiaries of this shift, demonstrated in not only this economic impact report, but also its own financial results.

Shopify’s fourth-quarter and full-year financial results for 2020 showed record revenues and profits, positioning the e-commerce firm as one of tech’s big winners from the pandemic-fuelled growth of e-commerce.

Shopify supported 1.7 million businesses globally in 2020, with over 690,000 small businesses selling internationally. Merchants generated more than $20 billion cross-border sales, and $5.8 billion in revenue was generated in developing nations by Shopify merchants. Shopify’s partner ecosystem also saw growth in 2020, generating $12.5 billion in revenue last year, up more than 84 percent from $6.8 billion in 2019.

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In terms of economic impact across jurisdictions, Canada ranked third with a total impact of $18 billion, trailing only the United States and United Kingdom. According to the report, over 3,900 Canadian partners supported merchants on Shopify last year.

In 2020, Shopify’s Canadian merchants made $2 billion in exports and employed a total of 123,574 people last year, equivalent to one in every 146 full-time employees in Canada.

Shopify’s large economic impact in Canada is hardly surprising, given the company has been particularly active in bringing Canadian businesses online during the pandemic. Last year, Shopify partnered with the federal government to launch Go Digital Canada, aimed to bring more Canadian small businesses online.

In the spring, Shopify also launched an initiative challenging teams within its partner network to build an app that helps businesses adapt and grow online. The company was also one of several partners on Digital Main Street’s ShopHERE powered by Google initiative, aimed at helping independent businesses build and optimize online stores at no cost.

Image source Shopify.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.