Shopify falls as RBC sees payments pinch from Instagram checkout
Shopify Inc., the online platform for merchants, fell the most in two weeks after RBC said the company could be hurt by Facebook Inc.’s launch of Instagram Checkout, which allows consumers to pay for items without leaving the social platform.
The new Instagram service could take share from Shopify, RBC analyst Ross MacMillan said. That’s because currently, merchants can link to their Shopify channel on Instagram, which brings customers to the site and generates payments revenue.
“Checkout on Instagram circumvents this and provides a new checkout mechanism for a brand separate from the Shopify platform,” MacMillan said in a research note on Tuesday, adding that Shopify’s gross payments volume from Instagram purchases are “very small today.”
Some of the first brands using the new Instagram service, which was launched in a closed beta, include Shopify merchants such as newly dubbed billionaire Kylie Jenner’s cosmetics company and the apparel company Outdoor Voices.
Shopify shares fell as much as 3.9 per cent in New York, their biggest decline since March 4. The stock has gained more than 40 per cent year to date.