Why the Walmart and Shopify Merger Won’t Likely Happen

Why the Walmart and Shopify Merger Won't Likely Happen

Walmart has been aggressive in its pursuit of e-commerce leader Amazon. While Walmart remains the largest retailer in the world, there is no question that it has a long way to go before it catches up with its rival. It has, however, partnered with several online firms as part of its efforts to close the gap.

Just recently, Walmart teamed up with home delivery firm Instacart to bring same-day deliveries to Canadian customers. Two years ago, it acquired one of the fastest growing US e-commerce firms in Jet.com to expand its e-commerce portfolio.

Walmart and Shopify Partnership?

There has also been speculation as of late that Amazon will try to buy leading e-commerce platform Shopify. The Canadian firm has rapidly amassed a significant number of hungry merchants which should appeal to Walmart. While the number of online merchants on Shopify (around 600,000) remains paltry when compared to the nearly 5 million on Amazon, a potential Walmart and Shopify marriage can jumpstart the former’s bid to eventually overtake Amazon.

Moreover, it has been suggested by several observers from the financial media that merchants on Shopify will get a new platform to drum up their sales if and when the Canadian firm partners with Walmart. On the other hand, the largest traditional retailer in the world will be able to boost its online offerings.

Why Walmart Can’t Buy Shopify

But there’s one stumbling block to a potential Walmart-Shopify merger– the latter is not technically for sale. After all, the Canadian firm has grown exponentially over the past few years. Its stock has more than doubled in the past year. It is performing even better this year.

Aside from the fact that Shopify investors won’t likely agree to a sale, Walmart may also be concerned about majority of the registered merchants on Shopify. Many of those could be small upstarts which is against the traditional retailer’s approach of buying successful online retailers instead.