Shares of Shopify, like most technology companies lately, are getting battered around.

But it’s business as usual for the e-commerce leader as the firm has struck a partnership deal with large Chinese online player

TD Securities sent a note to its clients with some thoughts on the arrangement and what it may mean for Shopify’s prospects.

Here are the hi-lights.


by Daniel Chan & Arvin Valencia, TD Securities

Shopify announced that it was partnering with, allowing Shopify merchants to tap into the large Chinese e-commerce channel.


Untapping China.

We believe the deal bolsters Shopify’s appeal to merchants as it opens one of China’s largest e-commerce marketplaces to Shopify’s merchants.

The deal brings JD’s 550 million active customers in China to Shopify merchants.

Through this partnership, Shopify merchants will be able to sell their products on the JD Marketplace, translate text, convert currency, manage customs and taxes, and allow merchants to use JD’s logistics services.

Merchants will also be able to start selling products in China in as little as three-to-four weeks, rather than the typical 12 months.

This is Shopify’s first partnership with a major Chinese e-commerce marketplace.

Revenue share, but no payments opportunity.

From a financial perspective, the partnership could drive higher subscription revenue as merchants continue to choose Shopify as their e-commerce platform to address a broad range of global channels.

It could also help drive additional Merchant Solutions revenue if merchants scale and require more capital through Shopify Capital, for example.

However, since checkout happens directly on the JD Marketplace, consumers will not be able to use Shopify Payments.

The partnership will also have a revenue share component, although details of the agreement were not provided.


Image: Courtesy TechCrunch

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