Shopify’s shift to attract big-money clients appears to be moving slowly. Some three years after the e-commerce firm trumpeted its “next era of growth,” analysts say that the complexity of landing what it calls enterprise clients means it’s taking time for Shopify to turn big brands into big revenue.

Shopify is yet to disclose how much money it’s making from major companies using its platform, or how much of its business they now represent. Analysts told The Logic they estimate that less than 10 per cent of Shopify’s revenue comes from big-name clients, with the vast majority of its business still reliant on small and medium-sized businesses.

“It’s good for them to be there,” said Liam Gallagher, analyst for cable, telecom and technology at Veritas Investment Research Corp., of Shopify’s push to sign up enterprise clients. “But I wouldn’t say it’s something that moves the needle for the stock today,” he said, adding it’s still early days for the strategy.

Shopify’s attempt to woo enterprise clients, which it defines as those bringing in more than US$125 million in sales annually, started in earnest in 2023. Early that year, it launched Commerce Components, a tool that would allow major retailers to put parts of Shopify’s tech into their own systems. Mattel was one of the first clients. Shopify also started attending the National Retail Federation’s annual conference to show off its e-commerce tools and rub shoulders with big brands.

Despite the major sales offensive, Shopify has mostly stayed silent about exactly how much money it’s making from big-name clients. It doesn’t break out revenue by merchant size, but has dropped clues that suggest the strategy is working. In the first quarter of 2024, Shopify president Harley Finkelstein said the company’s Shopify Plus and enterprise growth of gross merchandise volume (GMV)—a key metric of the amount of goods and services sold using Shopify’s tech—was continuing to outpace overall growth. Gallagher said it’s possible the company is declining to disclose more for competitive reasons.

Shopify spokesperson Rebecca Feigelsohn said that the firm doesn’t “artificially” split out revenue from its enterprise business because large firms use the same services as smaller ones. “We have merchants who chose us early on now processing hundreds of millions in GMV, and we have others who arrive at Shopify already at enterprise scale,” Feigelsohn said. “Either way, it’s the same platform.”

Gallagher estimates that less than five per cent of Shopify’s revenue comes from enterprise clients. Scott Berg, managing director of equity research for enterprise and application software at Needham & Company, suggested five to 10 per cent. At the five per cent mark, Shopify would have earned nearly US$578 million in revenue from its enterprise clients in its last financial year. 

Both said the company provides too little data on the enterprise part of its business to make a fully educated estimate. “The closest you can really get to anything is just the logos that they talk about,” said Berg.  

While it isn’t disclosing dollar sums, Shopify is certainly making plenty of noise about the big-name companies it’s signing up. On quarterly conference calls with analysts, Finkelstein rattles off the names of major brands that are now using Shopify’s tech. Makeup brand L’Oreal and U.K. clothing retailer Topshop signed up last quarter. Before that came Stokke, Starbucks and BarkBox, among others.

Finkelstein’s social media, too, is dotted with these announcements, and photos and videos of collaborations with these big brands. “The pipeline that we are seeing is quite incredible,” Finkelstein said of Shopify’s enterprise business during a recent earnings call.

Gallagher said that Shopify has started to onboard more big-name brands in the last year, though he added that it takes longer for large, complex businesses to move to a new platform. The sales pitch process alone can take 12 to 18 months, he said.

Those that do decide to try out Shopify tend to opt for an à la carte selection of its services rather than adopting the full platform, said Gallagher, meaning Shopify doesn’t necessarily always get big revenue from big clients. Rather, Shopify has to convince them to migrate fully to its platform over time.

There might also be limits to the size of company that Shopify can hope to snag: Nike is unlikely, according to Gallagher, while Berg suggests Macy’s or Nordstrom would never be a fit. Some businesses have too many products and require a different setup, said Berg, and others have an economy of scale that can get them better deals elsewhere. That means that, for example, moving to Shopify’s platform and using its payment processing system, likely at a higher rate, is a tough sell, he said.

Enterprise growth might be slow-going, but signing up big brands can result in a big payoff for Shopify. Once a firm settles on a vendor, said Berg, they tend to stick with them for five to seven years. “There’s still 98-99 per cent of the market they haven’t touched yet.”

Editor’s note: This story has been updated with more detail about why Shopify doesn’t break out revenue from its enterprise business in its financial reports.