Amazon Acquires Shopify Competitor Selz

Amazon.com, Inc. AMZN bought Australian e-commerce company Selz last month, although the news went unnoticed until this week. 

What Happened: According to a company blog post by Selz CEO and founder Martin Rushe back on Jan. 15, Selz agreed to be acquired by the tech giant, although Amazon did not release the acquisition news at the time.

Selz, an e-commerce platform tailored to entrepreneurs and small- and medium-sized businesses, allows shop owners to create websites to build online stores, sell products and advertise on Alphabet Inc.'s GOOG GOOGL Google, Facebook FB and its subsidiary Instagram.

The deal is largely viewed as Amazon’s next step toward competing with Shopify Inc. SHOP and BigCommerce Holdings Inc. BIGC in the e-commerce sector.

Why It Matters: Since shutting down its Amazon Webstore in 2015, Amazon CEO Jeff Bezos has been searching for a service that hosts a platform catering to smaller businesses.

Merchants on Amazon are forced to sell through the Amazon marketplace directly, while merchants on Shopify — an e-commerce enabler as opposed to an e-commerce website —manage their online stores independently.

This gives Shopify two distinct advantages. First, the pandemic has created a “buy local” societal shift. Shopify’s customers are not necessarily aware they are shopping through the company’s platform and believe they are purchasing items straight through a small business.

Secondly, the shift from in-store to online shopping has helped share prices in Shopify climb almost 200% from March lows.

This has reportedly hastened Bezos’ interest to go head on against Shopify by adapting Amazon's business strategy to pick up both Shopify’s merchants and its customers.

What’s Next: Although the specifics of the acquisition have yet to be disclosed, Rushe in his blogpost aimed to calm merchants already using Selz services.

“Nothing is changing for our customers at this time, and we’ll be in touch with customers as and when we have further updates,” he wrote.