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Could Shopify Be the Next Big Retail Acquisition?

If Walmart wants to continue an acquisition streak that’s seen the retailer shell out billions for Jet.com, Bonobos, Moosejaw, Modcloth and Shoebuy, it might want to set its sights on e-commerce provider Shopify next—before Amazon does.

That’s what Sujay Seetharaman argues in a lengthy diatribe on TechCrunch. According to the market analyst for e-commerce intelligence firm PinkCandy, it really all boils down to the central role marketplace-style commerce has claimed in the overall success of digital retail’s biggest players. Like everything else it does, Amazon dominates in the marketplace arena, with 5 million active sellers including more than 20,000 SMBs that drive $1 million or more in annual sales, TechCrunch reported. With 100,000 new sellers expected to sell on Amazon each month, its marketplace could reach 11 million merchants in the next five years.

Currently, marketplace sales account for the lion’s share of Amazon Inc.’s transactions, accounting for 68 percent of transactions versus the 32 percent that are purchased directly from amazon.com, according to data provided by eMarketer. However, Marketplace Pulse estimates that gross merchandise volume will reach $840 billion by 2023, with third-party sales driving 70 percent of that.

Seetharaman contends that Walmart should make a big investment to catch up to Amazon in this regard, despite evidence that a number of Amazon’s third-party sellers are already limiting their exposure by hawking their wares on the Betonville, Ark.-based retailer’s marketplace as well—spurred on by the omnipresent concern that perhaps one day Amazon might cannibalize their business, too. However, Walmart’s seller selection process is notably stricter than Amazon’s, frustrating some merchants who want to be up and running ASAP, Seetharaman wrote on TechCrunch.

And that’s when Shopify really starts to become attractive to sellers in search of a new channel: their own storefront.

With more than 600,000 merchants on its platform, growth in the number of sellers topping 100 percent annually and a $17 billion valuation, Shopify could make for an appealing takeover candidate—and could help Walmart achieve something resembling marketplace parity with rival Amazon.