Expectations of sales growth in online trading have become the driver of Shopify quotes
Shares of the online trading platform Shopify Inc. (SHOP) rose almost 8% to $553.43 at the auction on March 15. The reason was concerns about another outbreak of COVID-19, which could provide a fresh surge in sales in online commerce.
Because of a new strain of coronavirus, China has recently imposed restrictions in several major cities. This increased uncertainty with the restoration of sales chains, but the situation for the e-commerce industry improved.
An additional positive factor is the reduction in gasoline prices from recent highs, which reduces the cost of shipping goods. This may delay the expected increase in delivery prices, so the risk of outflow of users. One beneficiary may be the Shopify platform for online stores. Shopify operates in 175 countries. The company has millions of customers who have generated more than $200 billion in sales using the platform.
The advantage of the Shopify platform is not only the ease of opening an online store but also the possibility of its rapid scaling, for example, in case of a successful start of sales or strong demand during the holidays. Shopify’s shares experienced a sharp drop in 2022, but many investors still see them as a direction for long-term investments. During the COVID-19 period, many of the 4.5 million Americans who quit their jobs opened their businesses using the Internet as the main platform for selling goods and services.
The number of new private enterprises is growing at a record pace not only in the USA, and Shopify is expanding its presence in the international market. Shopify maintains a conservative forecast for 2022 – with a slowdown in revenue growth, though without naming specific figures. But in 2021, income growth was high (+ 57%), and a slight decrease from the “abnormal” pandemic indicators.
