In This Article:
Shopify SHOP and Etsy ETSY are strong players in the e-commerce industry. While Shopify is growing its presence in the e-commerce domain by offering user-friendly tools and an extensive app marketplace, ETSY is expanding its footprint by allowing various merchants to list and sell their unique and creative products across multiple categories through its marketplace platform.
According to the Morder Intelligence report, the e-commerce market is projected to be worth $10.19 trillion in 2025. It is expected to reach $21.22 trillion by 2030, with a compound annual growth rate of 15.8% over the 2025-2030 period. Both SHOP and ETSY are likely to gain from the massive growth opportunity.
So, Shopify or ETSY— Which of these e-commerce stocks has the greater upside potential? Let’s find out.
The Case for SHOP Stock
Shopify is benefiting from robust growth in its merchant base. In the first quarter of 2025, Merchant Solutions’ revenues were $1.74 billion and accounted for 73.7% of Shopify’s total revenues. Growth was driven by its merchant-friendly tools, including Shop Pay, Shopify Pay Instalments, Sign in with Shop and the Shop App. Strong adoption of these solutions holds promise for Shopify’s prospects.
Among these offerings, Shop Pay stands out as a key driver of this momentum. The app processed $22 billion in Gross Merchandise Value in the first quarter of 2025, up 57% year over year. Large brands like Birkenstock, Lilly Pulitzer, and Johnny Was adopted Shop Pay, enhancing Shopify’s portfolio.
Shopify’s investment in AI-driven tools, such as Shopify Sidekick, tariffguide.ai and Shop Inbox, is helping merchants improve customer engagement and streamline operations. By leveraging AI, Shopify enhances its platform's power and user-friendliness.
An expanding partner base that includes TikTok, Snap, Pinterest, Criteo, IBM, Cognizant, Amazon, PayPal, Roblox, YouTube, Target, Manhattan Associates, COACH, Oracle and Adyen is expected to expand its merchant base further.
The Case for ETSY Stock
Etsy is benefiting from enhanced personalization through AI, strong mobile app performance, and continued growth in gifting, as well as Depop’s impressive performance.
Etsy is improving its customer experience through more browsable and personalized shopping experiences, particularly on its mobile app. The app now accounts for 44.5% of total Etsy marketplace Gross Merchandise Sales in the first quarter of 2025, with better buyer conversion rates, more monthly active users, and increased app downloads.
The company is using AI and machine learning to create more personalized and engaging shopping experiences. In April 2025, Etsy announced the introduction of an AI-powered discovery feature on its app, through which shoppers can now browse curated collections based on trends, aesthetics and occasions. Machine learning and AI are utilized to enhance human-curated listings and ensure they are aesthetically cohesive.
Etsy has also integrated its platform into third-party AI-based shopping tools, such as OpenAI’s operator and Microsoft Copilot, which broadens its reach and offers more ways for users to interact with the marketplace.
Depop, Etsy’s subsidiary, has experienced strong growth, particularly in the U.S. market, making it a significant contributor to Etsy’s overall performance. Depop’s focus on in-app sales and machine learning-based recommendations has been noteworthy. Moreover, Etsy has seen strong performance in its gifting categories, particularly during seasonal events like Valentine’s Day and Mother’s Day, which has driven GMS growth in these segments.