In May 2025, ecommerce reached 20.21% of total retail sales, nearly matching April 2020’s peak. This time it’s different, revealing a new ecommerce reality highlighted by Shopify’s strong quarter.
May 2025 saw ecommerce penetration at 20.21% of total retail sales, nearing the April 2020 peak of 20.33%. This growth is organic and sustainable, not driven by a pandemic.
**The Shopify Signal: $75B in GMV And Growing at 23% YoY**
Shopify’s Q1 2025 numbers show real recovery:
– $74.75 billion in GMV (up 23% YoY)
– $2.36 billion in revenue (up 27% YoY)
– $363 million in free cash flow (15% margin)
– Seven consecutive quarters of 20%+ GMV growth
– Eight consecutive quarters of 25%+ revenue growth
Shopify’s revenue for the twelve months ending March 31, 2025, was $9.379 billion, up 26.52% YoY. This signals the entire ecommerce ecosystem reaching a new level.
**What Changed Between April 2020 and May 2025?**
1. **Quality vs. Quantity Growth**
April 2020 was marked by panic-driven adoption. By May 2025, growth is credited to same-store sales, increases in merchants, and strong international performance. In 2025, they choose to stay online.
2. **Infrastructure Finally Caught Up**
Delivery issues of early 2020 are in the past. By 2024, Black Friday/Cyber Monday weekend saw $11.5 billion in sales, with $4.6 million per minute at its peak.
3. **The Omnichannel Reality**
This is not about online vs. offline but unified commerce. Shopify is over 12% of the U.S. ecommerce market, facilitating both digital and physical transactions.
**The B2B Explosion**
The real story is in B2B, with Shopify’s B2B GMV surging 109% YoY in Q1 2025, marking six consecutive quarters of 100%+ growth. Major enterprises like VF Corp’s brands and Kering Beauty are on the platform.
**The International Acceleration**
International Shopify GMV grew 31% in Q1, with Europe at 36% YoY. About 14% of GMV on Shopify comes from international transactions.
**What the 20% Ceiling Means**
This represents sustained performance, not a temporary spike. It’s about finding a sustainable equilibrium, with best-in-class platforms taking market share within the 20% ceiling.
**The Profitability Proof Point**
2025 represents sustainable unit economics, with Shopify reducing operating expenses from 52% to 32% of revenue from Q4 2022 to Q4 2024.
**The AI and Payments Moats**
Two trends are driving this growth:
1. **AI-Powered Operations**: Merchants are using Sidekick, an AI assistant, reducing complexity.
2. **Embedded Payments Domination**: Shop Pay grew 57% YoY, with payments GMV penetration at 64%.
**What This Means for SaaS Businesses**
1. **The Platform Play Is Real**
Shopify has become the infrastructure for global commerce, processing $292.28 billion in sales in 2024.
2. **International Isn’t Optional**
Hosting millions of merchants in 175+ countries, with over 875 million consumers purchasing from Shopify stores in 2024.
3. **Vertical Integration Wins**
Shopify’s expansion into payments, logistics, marketing, and B2B reflects the future of SaaS.
**The Macro Tailwinds**
The global B2C ecommerce market targeted $4.8 trillion in 2023, expected to reach $9 trillion by 2032, with global ecommerce sales forecasted to hit $6.09 trillion in 2024, emphasizing the growing trend.