Entrepreneur calls out Shopify stock dip and possible reasons why in Twitter thread
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Ali, who founded the Native deodorant brand, which runs on the Shopify, has also invested in other ecommerce ventures that use Shopify.
In the thread, he starts by noting Shopify stock has taken a big dive in the past 12 months, down over 50% as of his post.
He posted a screenshot purportedly of one of his personal investment accounts, showing a $109,000 loss over the original purchase price in the stock symbol SHOP. He notes he also owns more Shopify stock through another account that likely brings his losses to around $200,000.
“Everyone in e-commerce glorifies Shopify. They should because it is amazing. But it can also be sooo much better,” he writes, and then proceeds to call out the company for a variety of issues:
- He first notes that Shopify’s growth has been fueled by “outrageously cheap” Facebook ads that made it possible for little known merchants to get the word out about their Shopify stores. He also writes that Shopify has benefits from the overall growth in ecommerce which, in turn, was fueled by mobile, Amazon and the coronavirus pandemic.
- Continuing on, he notes that Shopify makes it relatively easy for someone new the ecommerce to get started selling online, but that the tools needed to send customers their way — specifically low cost Facebook ads — are “coming to end.” Facebook advertising has taken at hit after Apple devices rolled out enhanced privacy restrictions that limits how much Facebook can track the effectiveness of ads and target users. The market has also become more saturated, meaning there’s more competition for ad space.
- Ali points out that Shopify’s growth is stalling and “it has had 5 years to arm its rebels with more than muskets, and has failed to do so,” proceeding to identify key weaknesses in Shopify’s analytics, specifically the lack of ability to use cohorts analysis. He also criticizes the lack of full subscription model support, noting that most merchants have to use the third party app ReCharge, which he calls “like driving on the autobahn in a Soviet-made car next to a bunch of ferraris” while also saying it’s “overpiced” and “has awful support.”
- Other points include what he says are missed opportunities to build audience sharing tools and the growing pains for scaling up — he notes that even the company’s “enterprise” solution Shopify Plus doesn’t really meet the needs of many of the businesses he works with. Shopify also needs to focus on expanding its own product, creating new features and tools to meet merchant needs. He feels that will require a change in culture to become even more focused on its place as SaaS.
1. Shopify stock is down 50% over the past 12 months. Its mission may be to "arm the rebels," but it is giving us muskets in a war that is increasingly being fought with machine guns.
— Moiz Ali (@moizali) February 16, 2022