Is Shopify Making a Big Mistake By Competing Against Amazon?
Shopify (NYSE: SHOP) has been one of the hottest growth stocks this year, rising 170% year to date. With significant year-over-year growth and still lots of room for its sales to continue rising, investors have been very bullish on the company's future.
However, like many growth companies, Shopify is always looking for the next big thing. Earlier this year, the company announced that it was going to be getting into the fulfillment business, an arena that Amazon.com (NASDAQ: AMZN) has dominated. While Shopify isn't going to necessarily be competing head-on for all of Amazon's customers, it's going to be focusing on small and mid-size merchants that may otherwise find Amazon a bit too expensive and customer-focused.
Shopify plans to offer two-day shipping for U.S. merchants as soon as this year. It's going to take a lot to build up Shopify's capabilities, with the company pledging to invest more than $1 billion dollars over the coming years to do so. It's a bold move, and growth investors like companies that aren't afraid to take on some risks. There's certainly no bigger challenge for the company than to try to wrestle away market share from Amazon.
Source Fool.com
