According to the Securities Times APP, in the past 15 years, Shopify Inc., headquartered in Canada, a giant in e-commerce, has established a leading position in the field of e-commerce companies targeting "small family businesses" looking to open online stores, especially in the online "mom-and-pop store" field. Now, it seems that this Canadian e-commerce company's strategy has undergone a dramatic shift. Previously a company that was long criticized by some Wall Street institutions, it has now set its sights on much larger companies, hoping to take away more large-scale e-commerce customers like Mattel from cloud software giant Salesforce Inc.

Shopify's dramatic shift in target customers seems to be reflected in its stock price trend. The capital markets seem to highly favor the potential of Shopify in continuously acquiring large-scale customers like Mattel under the blessing of generative AI technology. Since the temporary low point in October 2022, Shopify's stock price has surged by over 210%. Since 2022, many Wall Street institutions had a negative view on Shopify's performance and stock price trends. At that time, the common criticism was that faced with the massive competitive pressure from Amazon's e-commerce platform, as well as Chinese e-commerce platforms like Alibaba, Shopify might not even survive. Two years later, these institutions undoubtedly had their pessimistic views countered by Shopify's strong performance and stock price performance in the face of tough competition.

Shopify recently stated that its custom e-commerce platform has attracted hundreds of large Salesforce customers, including mega brands like Mattel, Toys R Us, and mattress retailer Casper, and encourages other companies to "join the large-scale sales platform migration".

One of the main selling points promoted by Shopify is its entire suite of e-commerce services at a lower price, significantly lower fees, attracting many businesses to switch to Shopify to reduce technology and development costs. Compared to Salesforce, Shopify provides stronger flexibility and user-friendliness, allowing non-technical users to easily make daily updates and adjustments without relying on expensive developers. In contrast, Salesforce's customers often need to hire highly specialized IT developers for some technical adjustments, which increases staffing costs and operational system complexity.

Shopify is fully focused on a one-click, low-threshold development model for pure e-commerce platforms, equipped with native tools from B2C to B2B and investing heavily in research and development. Whereas Salesforce, as a CRM platform, although its Commerce Cloud provides e-commerce functionality, its main business remains in the CRM field, leading some retail large customers to believe that its investment in e-commerce is inadequate.

In addition, by integrating generative AI technology, Shopify has significantly reduced merchants' dependence on expensive IT developers. Shopify merchants can rapidly build the entire Shopify e-commerce ecosystem and independently update subsequent technology modules with extremely low technical thresholds by calling on major professional technology modules through generative AI, which further reduces the total cost of ownership (TCO), making it highly attractive to many small and medium-sized businesses as well as large enterprises seeking efficient operations. Through Shopify Magic, merchants can also automatically generate and edit product images, write product descriptions, optimize email communications, and more. These AI tools greatly reduce the complexity of various professional operations, enabling merchants to quickly build e-commerce platforms, adjust content, and marketing strategies without relying on professional developers and marketing specialists.

Shopify's Chief Operating Officer Kaz Nejatian once said in a media interview: "The reason why most enterprise software is so expensive is that it requires many 'steak dinners' to finally get it into your hands."

In response to the challenge posed by Shopify, Salesforce eagerly countered that its platform offers functionalities that Shopify lacks, including customer service, and can better handle sudden increases in traffic. Salesforce's Senior Vice President of Product Management, Luke Ball, said: "If you narrow the scope down to just one thing and then say, 'Oh, we're cheaper in this one thing,' then everything will be cheaper." "We are still the 'reigning champion' in the field that other companies are trying to break into."

By targeting large retailers like Mattel, Shopify hopes to drive growth. After the e-commerce boom driven by the COVID-19 pandemic gradually subsided, the company's performance and stock price were hit hard for a long time. Following the e-commerce trend spurred by the pandemic, the company mainly generates operating profit by selling a range of e-commerce services to customers, as well as through measures such as layoffs and business restructuring. By betting on the huge e-commerce order volume generated by large retailers like Mattel, the company aims to achieve profit growth faster than relying solely on its existing 'mom-and-pop shop' base, and Shopify has indeed made the right bet.

For years, Salesforce and Shopify have coexisted peacefully. Salesforce is known for its customer relationship management (CRM) software and entered the e-commerce field with the $2.8 billion acquisition of Demandware in 2016. Now known as "Commerce Cloud," Salesforce states that its clients include most top retailers, such as Saks Fifth Avenue. Ball mentioned that customers typically also use other Salesforce products, which means they can integrate e-commerce tools with Marketing Cloud and other cloud software functionalities.

Salesforce also benefits from a healthy direct-to-consumer brand channel, supported by numerous venture capitalists concentrated near its headquarters in San Francisco. The idea at the time was that these startups would grow rapidly and would need Salesforce's powerful business and customer relationship software. Instead, many of them failed, which also means one of Salesforce's important new business channels dried up.

Today, Salesforce's e-commerce and marketing business is the slowest-growing part of its business. Companies like Shopify, which have focused on the e-commerce field for many years, surpassed Salesforce in overall revenue from this sector in 2021. 'They are definitely notable competitors in this field,' Ball remarked. Salesforce stated that the company has also been attracting Shopify's clients, including Black Rifle Coffee, ReserveBar, and Hasbro.

Shopify builds its own online business platform by enabling small businesses to quickly establish online stores. This e-commerce giant, headquartered in Ottawa, Canada, continuously monitors industry trends and updates its software. By using low-threshold technology for e-commerce platform construction, online merchants can easily reach a large number of customers on desktops, mobile devices, and shopping applications with Shopify's one-click, user-friendly approach without worrying about any backend technical updates or professional IT adjustments. Shopify's widespread visibility in online transactions also helps improve the high accuracy of its fraud detection tools.

Like e-commerce giant Amazon, shopify has also benefited from the surge of online shopping during the epidemic, but once they return to normal shopping habits, shopify has been hit, reflected in the stock price falling to a temporary low in October 2022. In order to cope with the performance dilemma brought by the decline of the e-commerce boom, the company has also abandoned its ambitions to establish a logistics business, which could have helped its development by selling more services to existing customers. Without this, shopify needs to find new customers.

In order to attract larger scale customers, the company has been promoting its cost package claimed to be much cheaper than Salesforce. Scott Lux, Executive Vice President of Global Business and Technology at the fashion brand Esprit, said that by switching to shopify, customers can save up to 50% of e-commerce related costs within three years. It is understood that shopify has also added new features to attract larger customers, such as allowing brands to list as many products as they want and sell these convenient products on their official website, as well as marketplaces and popular social media applications.

Mattel, which recently switched from Salesforce to shopify, stated that its decision was partly based on the fact that costs are tied to traffic. While the demand for new products such as Collectors Windblade has increased significantly for the toy manufacturer, it does not require nearly unlimited round-the-clock capacity. Subramanian Kovilmadam, the company's VP of Technology, stated that shopify's flexible e-commerce platform also allows mattel to customize dedicated pages for key products, including American Girl dolls.

"Shopify's response to the complexity of mattel's demands was very rapid," he said. "By transitioning from a large annual license fee model to a more flexible transaction cost model, the transition to shopify has also saved us costs."

Bower of Salesforce also stated that the company is working to introduce more 'pricing flexibility' for customers.

"Shopify has added enough features in recent years to make it a viable choice for even the largest e-commerce merchants," said analyst Jill Luria from Wall Street investment firm D.A. Davidson & Co., who is also following both companies closely. "At the same time, Salesforce is weakening its marketing cloud and focusing more on the data cloud, making it easier for them to lose e-commerce customers."

Scott Lux of the fashion brand Esprit stated that Salesforce will still attract large enterprises with annual sales of $0.3 billion or more, because it has some more complex specialized tools, including the ability to run various technical tests and see which marketing activities perform best for real-time improvements. He emphasized that shopify is attracting retail businesses that are not large in scale and want to save IT operational funds, adding that shopify has indeed saved a lot of costs because these tools are easier to use and do not require the kind of IT team with too much specialized technical support. "Shopify is just insanely focused on rapid commercialization, which helps them stand out in business operations efficiency," he said.