WCM Stock in Focus | Shopify: Putting the Focus on Merchant Experience

A key focus of the WCM Quality Global Growth portfolio is to find quality global companies with durable, strengthening economic moats and corporate cultures aligned to this growth. An example of a company that demonstrates these characteristics is Shopify.

Established in 2006, Shopify is an e-commerce platform that provides its customers with the foundation to run their own online store. Shopify offers retailers a range of services such as retail point-of-sale systems, payments, marketing, and customer engagement tools. Shopify now powers over 1.7 million businesses worldwide*.

In this video, Brian Huerta of WCM Investment Management explains how Shopify’s culture of obsessing over the merchant experience has made it a leader in the market.



Tom Hickey (TH): Hello, welcome to this ‘Stock in Focus’ update for the WCM Quality Global Growth Fund. Today, I’m joined by Brian Huerta. Thanks for joining us, Brian.

Brian Huerta (BH): Thanks for having me, Tom.

TH: Pleasure. Today we are talking about a company called Shopify. Can you tell us a bit about what the company does?

BH: Shopify is a company that is enabling businesses to build easy to create websites, and it’s benefiting from a couple of different things such as the growth in e-commerce and the evolution towards direct-to-consumer business models.

It’s enabling its businesses and its customers to build websites in a matter of minutes or hours with essentially no coding experience required. Shows like Shark Tank and the influencer economy are huge tailwinds for the company, as a rise in entrepreneurship is benefiting companies like Shopify.

TH: There are few competitors in this space, notably Wix and Squarespace. What do you see as Shopify’s economic moat and how do you see that changing over time?

BH: The trust in brand certainly play a part and the ease of use is another thing. The most important competitive advantage is how Shopify has built out an ecosystem and become an open platform where developers can make programs and applications that work around the total ecosystem of Shopify.

Merchants have to use different programs to manage their entire business and essentially, Shopify has become an operating system that pulls in the merchant and makes them dependent on Shopify. This helps expand Shopify’s competitive advantages or its economic moat.

TH: What do you like about the culture at Shopify?

BH: This is the opposite of Amazon. Amazon is hugely focused on the consumer experience, whereas Shopify is the exact opposite, it focuses and obsesses over the merchant experience. It’s always looking for ways it can tinker the site, enhance the tools to enable merchants to be more competitive than ever.

It’s incredibly adaptable. Shopify sees opportunity and really go after opportunities to help its merchants, such as Shopify Capital or Shopify Fulfillment. These are enabling Shopify to offer all the services that its customers need. It’s quite different than any of the competitors that it is currently facing now.

TH: Thank you, Brian.

BH: Thank you, Tom.

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