Are you wondering how in the world it is already May 2021? You're not alone! This year has been moving full steam ahead, and it's not stopping anytime soon! As we move into the second month of Q2, it is time to look back at the top e-commerce news stories from April.
Shopify Revenue More than Doubles:
Yep, you read that right. The e-commerce platform and marketplace (and DesktopShipper Partner!) continues to grow immensely year over year. Shopify's total revenue for the first quarter of 2021 was $988.6 million, a year-over-year increase of 110%. The overall gross profit for the quarter was up 117% to $558.7 million compared with 2020's first-quarter earnings, which was $257 million. Shopify's net income for Q1 of 2021 was $1.25 billion. Shopify's CFO, Amy Shapero, says about their growth, "Shopify's momentum continued into 2021 as digital commerce tailwinds remained strong and merchants took advantage of the range of capabilities offered by our platform..." Without a doubt, Shopify's growth is rapidly increasing as they capture more clients and increase their offerings to meet new demands. As we know, e-commerce isn't slowing down anytime soon, and Shopify is benefitting from it!
FedEx and Adobe are Helping E-commerce stores offer Free Two-Day Delivery.
As Amazon continues to own a majority of the market share in the e-commerce space, competitors are trying to keep up! Last month, Adobe and FedEx announced a new partnership to help competitors of Amazon offer their customers free two-day shipping. ShopRunner, a membership service that offers free shipping and returns, was acquired by FedEx in 2020 and integrated into Adobe Commerce. Adobe, in 2020, acquired Magento for $1.7 billion in 2018 and rebranded it as Adobe Commerce. The partnership between FedEx and Adobe allows Adobe vendors to gain access to millions of existing ShopRunner members. Then with FedEx in the loop, they will be able to offer free two-day shipping and returns. At this point in e-commerce, free two-day shipping has become the norm. This partnership allows for small to medium-sized businesses who couldn't previously afford to offer free two-day shipping to do so.
Global E-commerce Sales Projected to hit $4.2 Trillion by the end of 2021
After the Q1 numbers came in, Adobe has projected yearly global e-commerce numbers. U.S. consumers spent $78 billion online in March, which is up 49% year-over-year, which is the highest growth since July 2020. In the first quarter of 2021, U.S. e-commerce sales grew 39% year-over-year to $199 billion. Global e-commerce, on the other hand, reached $876 billion in the first quarter of 2021, which is an increase of 38% year-over-year. For the first time, Adobe included global e-commerce numbers saying that global e-commerce sales will hit $4.2 trillion by the end of 2021. On top of that, Adobe predicts that the U.S. will account for 25% of this number. Though we know that only time will tell, these numbers and projections prove that despite vaccine rollouts and economies opening back up, consumers seem to be sticking to their online shopping habits.
Unexpected Cost of the Pandemic and E-commerce Sales Increase
With high demand and low supply comes increased cost. That was no different when the world shut down due to the novel coronavirus in March of 2020 and the price of basically everything. Something that was somewhat expected and continues to surge in prices is cardboard and boxes. According to the Producer Price Index for Corrugated and Solid Fiber Box Manufacturing from the U.S. Bureau of Labor Statistics (BLS), the cost of cardboard reached a record high this February. According to BLS numbers, the index has increased 4% since December. Like freight and small parcel carrier pricing rising with the demand of e-commerce, we can now expect pricing for packaging will continue to surge.
Although we are not in the traditional "busy season," there is a lot to review within the industry this month. As the economy opens back up, consumers are still choosing to shop online, leaving e-tailers with unexpected demand.