What are the benefits of Shopify and Amazon’s “alliance”?

The market expressed its congratulations and support for the two giants' "holding hands" with rising stock prices

One is the leader in the independent website world, and the other is a giant in the cross-border e-commerce world. The two still compete to some extent. However, these two giants in the e-commerce field have recently officially announced that they have reached a business cooperation. Integrated apps for merchants!

Shopify announced that Amazon will release an application adapted to the Shopify ecosystem, allowing U.S. Shopify merchants who use Amazon’s delivery network services to choose to add Buy with Prime to Shopify Checkout processed by Shopify Payments.

What is the role of this cooperation?

First, after Shopify merchants have the Buy with Prime feature, they will allow consumers to purchase goods using the store payment method in Amazon Wallet when paying at checkout.

Second, it also enables Shopify merchants to provide Prime members with fast, free shipping and easy returns outside of Amazon for the first time.

At the same time, Shopify merchants can also maintain 100% control of their brand and customer data through the background.

CNBC reports that the feature, initially available only to merchants by invitation, will be available to all U.S. Shopify merchants by the end of September.

It is understood that Buy with Prime is a service launched by Amazon last year that allows third-party merchants to use Amazon’s checkout and fast delivery services. Amazon believes that this integration will make consumers more likely to shop from unfamiliar brands or websites. Because there is Amazon’s endorsement behind it.

Amazon’s official website also has related publicity about the effects of this feature: using Prime shopping discounts to increase shopper conversion rates by an average of 25%.

At the time, the move was widely seen as an attempt to dent Shopify's momentum. Some analysts believe that the business may develop into a sizeable business in the future, which may bring in revenue of US$3.5 billion.

This business did initially arouse the ire of Shopify, which also warned merchants on the platform not to use Amazon’s Buy with Prime to avoid violating Shopify’s terms of service and causing security risks. Shopify would prefer merchants to use its own payment and checkout service.

Now that such a "reconciliation of the century" is being staged again, there really are no permanent enemies but only permanent interests.

In response, Shopify’s announcement stated: “Our mission is to make commerce better for everyone. That means ensuring our merchants can sell anywhere. To do this, we are committed to empowering our merchants and their customers Provide more choices.”

Amazon executives also gave positive feedback, writing in a post that they were "excited to be working with Shopify to help make this happen."

Although the two giants have integrated functions, some signs of compromise can also be seen. Foreign media reported that Amazon Prime members who log in to their Amazon accounts on the Shopify website that supports "Buy with Prime" can use Amazon wallets. payment method, but in reality Shopify will still process the payment so that it goes through its checkout system.

Still, Shopify's stock rose 10% on Aug. 31 following the news.

For sellers, in this way, they will not be affected by the war between the two giants and weaken the service capabilities of their own platforms. They will be able to obtain more customers with better services or maintain the stickiness of existing customers.