After two years of a pandemic-fuelled growth spurt, Canadian e-commerce software giant Shopify is paring down its Southeast Asia ambitions, The Ken has learnt. Several top-level executives based in the region have left the company recently—its head of partnerships in March, its regional manager in April 2021, to name a few—while more exits are imminent.
Like many companies across the world, the NYSE NYSE NYSE The New York Stock Exchange (NYSE) is the world's largest stock exchange. -listed Shopify hasn’t been immune to the global economic downturn this year. The US$45-billion company, whose cloud-based software is used by over two million small and medium-sized merchants to operate digital storefronts, was hit hit The Wall Street Journal Shopify’s Pain Comes Long Before Gain Read more by inflation, supply-chain issues, rising fuel prices, and the reverse migration of shoppers from e-commerce to brick-and-mortar stores as the world reopened after Covid.
Shopify’s revenue for the quarter ended March 2022 rose rose Reuters Shopify's revenue growth slowest in seven years, shares plunge Read more by 22% year-on-year to US$1.2 billion—its slowest quarterly revenue growth since going public in 2015. Its share price, meanwhile, has slumped from nearly US$167 in August 2021 to US$35.5 currently.
All this has left Shopify in a quandary. Just about three months ago, the company was looking for a Singapore-based Southeast Asia head. That job post has since been taken down and it’s unclear whether the company has hired anyone for it. A quick LinkedIn search suggests no one has taken up the role. It appears as if Shopify’s focus in Southeast Asia is now on maintenance and optimisation instead of expansion—hiring in the region is now limited to product management and engineering roles.
Shopify isn’t alone here. In Indonesia, Southeast Asia’s largest economy, local startups that are building similar cloud-based e-commerce solutions are also struggling to hit a critical mass.
Three-year-old Lummo, for instance, laid off more than 150 people in June. While it was previously reported reported Tech in Asia Tiger Global-backed Lummo cuts 150+ employees Read more that the layoffs were due to the global slowdown, a former employee told The Ken it was also because the market “wasn’t ready” for its Shopify-like product. Worryingly for Lummo, this is happening just months after the company shifted its focus from bookkeeping solutions to its digital storefront, LummoShop (formerly Tokko).
One of the major reasons why this business model is struggling is traffic, or the lack of it.
