Shopify increased its prices globally. The increase is different in each region. And there will be no change in pricing for existing merchants for three months.
The new pricing will set the monthly price in the realm of 27 euros per month when paid on a yearly subscription, which is a considerable increase from the previous price.
This measure is explained by Shopify as a necessary evil to keep the high quality of the platform on par with the increasing costs and the complex economic scenario 2023 is forecasting.
Regarding this decision, Shopify said in a public statement:
‘The idea behind the products we create has always been the same: we offer merchants the most powerful, innovative, and reliable tools in the industry at a price that's unmatched in the market.
But what that means, and the resources required to live up to that promise, have changed dramatically since we started.In order to not change the value of Shopify, we’ve had to change the price.’
During the COVID crisis, Shopify shares soared among the frantic e-commerce adoption among companies from all over the world. But later, in the 2022 rebound year, Shopify was hit by the Big Tech crisis and forced to lay off over 10% of its total global workforce.
Currently, the platform has generated over $590bn in sales and is now used by millions of merchants in 175 countries — according to Internet stats company Builtwith.com, Shopify currently powers around 4.5 million online stores.
These numbers are enough, for the time being, to keep Shopify afloat. And if we combine these milestones with the fact that, so far, 2023 first month has been one of success for the company - achieving multiple global brands as new partners and customers - it is easy to understand why the company seems to be in a ‘profitable path’ as the Deutsche Bank indicated by upgrading Shopify.
Shopify (SHOP.US) shares rose over 6.0% at the beginning of the week after Deutsche Bank analysts upgraded the e-commerce company to buy from hold and raised the stock-price target to $50 from $40, citing growing interest among brands which could lead to a 20.0% rally.
"Many leading brands are now actively looking to migrate or are in the process of migrating over from legacy/competing solutions, and we note this is in sharp contrast to our conversations over the last 12 months which consistently highlighted the pace of migrations slowing," wrote analyst Bhavin Shah.
Investors will be able to assess the recent performance of the company on February 15, when Q4 results will be published.
Overall, Shopify seems to have been able to redirect the company toward a more profitable position, although only time will tell.
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