Facebook Shops, free credits, and more: How Shopify is helping SMEs get back to business after COVID-19

The need for businesses to go online has never been more desperate than now.

With the coronavirus pandemic pausing all industrial activity, the only ones getting back to business are those that have online storefronts with point-of-sales and payment mechanisms, communication and customer engagement tools, and other resources. 

Canadian multinational ecommerce platform Shopify has been helping merchants set up online stores and retail POS since 2004.

Headquartered in Ottawa, the cloud-based multi-channel commerce platform, which helps small merchants start, run, market, and grow their business, powers over one million businesses in 175 countries.

Shopify launched in India in 2014, as ecommerce was peaking in the country.  Today, it supports thousands of SMEs and SMBs, including Blue Tokai Coffee, Raymonds, NUSH by Anushka Sharma, Star Struck, John Jacobs Eyewear, and more.

With COVID-19 shrinking India's economy by a few notches, Shopify has turned its focus towards helping tens of thousands of merchants “get back to business”. 

“We offer a platform so easy to use that merchants are free to focus on developing their products rather than overcoming technical constraints, which in today’s context, is more relevant than ever,” Sandeep Komaravelly, Director of International Growth, Shopify, tells YourStory in an exclusive interview. 

He also talks about Shopify’s growth in India, its localisations and market-specific innovations, the rapid shift from offline to online commerce, the massive growth of SMEs, and new product features that will help merchants tide over the pandemic.

Edited excerpts from the interview:

YourStory: How has Shopify grown in India since it launched? What are you offering local merchants? 

Sandeep Komaravelly: Since our launch in India in 2014, we have witnessed significant growth among both large and small Indian businesses, with MSMEs benefiting the most from our platform. Entrepreneurs rely on us as their retail operating systems.

With Shopify, they can operate and grow their business across their own direct-to-consumer website, online marketplaces, and social networks, while remaining in full control. In the last two years, we’ve seen rapid adoption of our basic and advanced plans by SMEs, and we witnessed a growth of 44 percent in 2019.

In light of the current situation, Shopify, through its ecosystem partner network, is extending attractive offers from partners across categories that merchants can avail and save through partner credits to get back to business and amplify their stores.

YS: What are the core features and functionalities offered by the platform? And how are you localising the offering in India? 

SK: India has always been one of our priority markets and we remain committed to innovating to benefit the merchants and support them to amplify their businesses.

They now have the option to collect tips at checkout. We’ve also released a new one-page theme called Express that enables merchants to get online quickly. Selling gift cards is available to all, and we see more merchants utilising this feature than ever before. For businesses that can’t deliver products during COVID-19, this has provided a much-needed supplement to cash flow. 

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YS: How is Shopify helping merchants adapt to the challenges posed by COVID-19?

SK: Our mission right now is to help merchants survive. We’ve directed the energy of the entire company towards that.

We have a number of features such as a 14-day trial, Shopify Email, Pick-up, Express themes, etc. for merchants. Over Rs 1 lakh in partner credits can be saved with our carefully-curated offers from our service partners such as Razorpay, Paytm, Shiprocket, Adyogi, Delhivery, and others. 

YS: Typically, what is the size of a merchant business on Shopify India? Which categories do they operate in? 

SK: We have large and small businesses on Shopify, including Blue Tokai Coffee, Raymonds, NUSH by Anushka Sharma, Star Struck, John Jacobs Eyewear, among others. The popular categories in India would be fashion, home decor, cafes, and FMCG. 

YS: Is your pricing in India different from that in other markets? 

SK: We offer a standard 14-day trial with all our services available to merchants who have signed up. Following this, we have different plans available ranging from Basic to Advanced levels that are priced accordingly, starting from $29 per month. 

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YS: What are the payment mechanisms available to shoppers in India? Any innovation on that front given the current crisis?

SK: Shopify Checkout allows them to buy with local payment methods, including digital wallets and multi-currency, including Paytm, Razorpay, Paypal, etc.

Shop Pay Installments or our new ‘Buy Now, Pay Later’ option will let merchants offer more payment choices and flexibility at checkout, giving consumers the option to split purchases into four equal payments over time, interest-free, and with no additional fees. We believe that flexible payments can help increase a merchant’s average order size by making purchases more palatable to consumers — particularly in the current economic climate.

It will be available to US merchants, but we are working with partners to roll out Shop Pay Installments to other markets later this year.

YS: How has India growth been in terms of sales, GMVs, and merchants?

SK: At present, we have over one million merchants registered on our platform, and have witnessed cumulative sales of $172 billion (up by 46 percent) as of Q1 2020. In India, we have witnessed 44 percent merchant growth and 56 percent active partner growth. We also recorded 59 percent GMV growth in 2019. 

Interestingly, the order percentage in India has been 79 percent mobile versus 21 percent desktop in 2019. The market saw a 43 percent growth in cross-border sales. And out of all sales, nearly 22 percent were cross-border.

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YS: What have been the key growth drivers for Shopify in India? 

SK: India has been one of our strongest markets in Asia. Our approach of putting merchants and their businesses front and centre, our investments in the market to localise the product and bring impactful partnerships as well as our efforts to nurture and grow the Shopify ecosystem have been our strongest growth drivers.

YS: How have your business operations been impacted post COVID-19? What steps are you taking to overcome that?

SK: COVID-19 has underscored the importance of shopping locally. More than ever, merchants need efficient ways to connect with their local customers today.

Globally, average daily local orders on Shopify for the six weeks ending April 24 grew 176 percent, compared to the prior six weeks, coinciding with the introduction of physical distancing measures. In April, 26 percent of brick-and-mortar merchants in Shopify’s English-speaking geographies were using some form of local pickup and delivery solutions, compared to just two percent in February. 

Historically, necessity breeds innovation. By making it easy to start and maintain a business, we continue to help merchants bring to life the innovations spurred by this unprecedented world event. 

YS: Talk about your collaboration with Facebook Shops and how this partnership will pan out in India (and across the world).

SK: Shopify’s partnership with Facebook shows that the tech industry is coming together to help businesses at a critical time. Pairing our platform and commerce capabilities with Facebook’s reach and scale makes us formidable partners.

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Facebook Shops is a new and free tool helping merchants create a customised digital storefront for Facebook and Instagram.  As consumers shift to online and mobile shopping, new tools like Facebook Shops will help merchants sell through social commerce, thus enabling faster conversions.

They will get control over customisation and merchandising for their digital storefronts inside Facebook and Instagram, while managing their products and inventory directly from within Shopify. Consumers will be able to easily browse and buy products through a full-screen, immersive experience in the apps they use. 

YS: How do you plan to grow and expand Shopify amid rising competition? Does this include mergers and acquisitions too?

SK: We are a merchant-centric platform and have placed merchants at the core of our developments and innovations. We will continue to innovate on this front to enable our network with the best of facilities that will help them with better visibility and selling tools. It is too early to comment on mergers and acquisitions at this stage.

YS: What are the biggest opportunities and challenges in the industry that you operate in? Will COVID-19 serve as a definitive inflection point for small merchants going online?

SK: COVID-19 has changed the way we do commerce, and Shopify is accelerating and shipping products that will help merchants future proof their businesses.

Retailers are moving online, quickly. New stores created on Shopify grew 62 percent between March and April, 2020 compared to the prior six weeks, driven by the shift of commerce to online.

Not surprisingly, e-tailing platforms have seen a 15 percent to 20 percent spike in cart value, and a massive 50 percent growth in GMV in categories such as grocery, health and wellness. We expect this to grow as Indian consumers’ appetite for online shopping increases over the next six to nine months.