Comparing Shopify Markets and Expansion Stores for Selling Globally in Shopify

Expanding a business globally requires careful consideration of various factors. When it comes to selling globally on Shopify, two primary options stand out: Multiple Shopify Stores and Shopify Markets.

However, before delving into the comparison, let us provide some context and highlight the future prospects of each approach. Shopify Markets, introduced in August 2021, is a cross-border management tool that enables brands to identify, establish, launch, optimize, and manage international markets all within a single store. It is crucial to note that Shopify Markets arrived after many brands had already adopted Expansion Stores as their solution, resulting in a significant sunk cost for numerous businesses.

Likewise, since its launch, Shopify Markets has undergone continuous evolution and improvement, posing a threat to the viability of opening new Expansion Stores. It is evident that in the upcoming years, Shopify Markets will continue to enhance its functionality and address the issues that currently prompt brands to opt for Expansion Stores. As a result, Expansion Stores will likely remain relevant only in specific cases.

Although we cannot definitively declare one option as superior, the ultimate choice will depend on the specific needs and structure of each brand. This article aims to compare these two options comprehensively, assisting you in determining the most suitable approach for your global selling strategy.

Exploring Key Features

In the table below, you will find a concise summary of the key features we will be comparing Shopify Markets and Multiple Shopify Expansion Stores, along with the determined winner for each case. For a more detailed analysis, please continue reading below, where we delve into the specifics of the comparison.

Local Payments

Is it possible to choose between Shopify Markets and Expansion Stores worldwide? Unfortunately, no. In order to fully utilize the benefits of Shopify Markets and sell in local currencies, brands must use Shopify Payments. However, it's important to note that Shopify Payments is currently only available in a limited number of countries.

To obtain the most up-to-date information on the availability of Shopify Payments in different regions, we recommend referring to the official source. Generally speaking, Shopify Payments, which enables receiving payments in local currencies through Shopify Markets, is currently accessible in the US, Canada, Australia, Europe, New Zealand, Singapore, Hong Kong SAR, and Japan.

If Shopify Payments is not available in your country and you do not have a legal entity in any of the aforementioned countries or regions, opening a new Expansion Store becomes the sole option to activate payments in a different currency.

Fees

Shopify Markets, combined with Shopify Payments, enable businesses to accept payments in local currencies from customers worldwide. However, it's important to note that Shopify pays brands in their primary store currency and charges fees for currency conversion on transactions made in different currencies. These currency conversion fees are in addition to the regular transaction fees associated with each sale

For brands with a significant sales volume in a specific market using a different currency, opening an Expansion Store can be beneficial. By changing the primary currency of the Expansion Store, brands can receive payments in the local currency, eliminating the need for currency conversion fees.

Consider an example where 50% of a brand's billing comes from customers in Europe paying in Euros, and the other 50% comes from customers in the US paying in USD. If the primary currency is set to Euros, transactions in USD will incur currency conversion fees. Opening an Expansion Store with the primary currency set to USD would allow the brand to receive payments in both currencies without additional fees.

Legal Entities

If your brand is legally established in multiple countries, it becomes necessary to comply with the local requirements of each country by collecting sales and taxes accordingly. However, it is important to note that, currently, Shopify only allows linking one legal entity per store, although they are planning to change this in the near future.

For instance, if your brand has a legal entity in both the US and France, you will be required to create two separate Expansion stores to accurately track and collect sales for each specific market. This ensures compliance with the unique legal and taxa obligations associated with each country.

Logistics

When brands have different warehouses located worldwide, the Expansion Store approach is often the most suitable. Currently, Shopify Markets does not provide the ability to create rules that allow for stock limitations based on the nearest warehouse, although Shopify has announced upcoming changes that will address this limitation.

Consider a scenario where a brand has warehouses in both Europe and the US, with global shipping capabilities. If an order is received for a black T-shirt from a customer in France, but the product is out of stock in the European warehouse, the customer can still make the purchase, but the item will need to be shipped from the US. Unfortunately, under the current system, it is not possible to restrict these situations. As a result, fulfilling the order from the US instead of the local warehouse may lead to a loss in margin due to increased shipping costs.

Operations

From an operational perspective, having an Expansion Store is akin to having a new independent store with separate sections for themes, products, orders, marketing, analytics, and more. If you have dedicated teams for different markets, an Expansion Store can be an optimal approach as each team can focus on and have access to their specific market.

Conversely, if the same team is responsible for managing all markets, having multiple Expansion stores can lead to duplicated operations and reduced efficiency. On the other hand, using Shopify Markets allows for streamlined operations across markets without the need to duplicate products, information, or content across multiple stores.

While Shopify Markets offer operational efficiencies, they may be less flexible in certain aspects. For instance, the theme and landing pages must remain the same across different markets. This limitation means that a fashion brand targeting both Spain and Argentina, using Shopify Markets, would be unable to promote summer products in Spain and winter products in Argentina simultaneously.

Finally, one advantage of using Shopify Markets is the ability to access analytics for each selling region within a single store. This provides a global view of sales data, enabling brands to easily analyze performance across different markets.

Regional Markets

As of 2023, Shopify Markets only enable the creation of markets for countries, lacking the ability to create markets for regions within a country. This limitation becomes particularly critical for regions outside of the mainland, such as Hawaii for the US, the Canary Islands for Spain, or Reunion Island for France, where unique conditions and requirements exist.

In such cases, brands are limited to restricting shipping to these regions alone. If the intention is to offer differentiated options or experiences specific to these regions, Shopify Markets may not be the suitable choice. Instead, opting for an Expansion Store becomes the only viable option to cater to the specific needs and nuances of these regional markets.

IT Management

When it comes to IT infrastructure, the choice between Shopify Markets and Expansion Stores plays a crucial role. In this aspect, Shopify Markets excel in providing easy localization of shopping experiences.

Shopify Markets offers businesses the ability to seamlessly establish new domains or subfolders customized for each specific market, providing a significant advantage in terms of SEO optimization. By utilizing the features offered by Markets, brands can create subfolders, customize URL slugs, and effortlessly translate and adapt their content to cater to specific markets. This level of SEO customization greatly improves the visibility and discoverability of products and services in search engines, resulting in increased organic traffic.

On the other hand, Expansion Stores may present some challenges in terms of IT management. Integrations with platforms like Google Merchant Center, implementing hreflang tags for multilingual SEO, managing robots.txt files, and synchronizing stock levels can require additional effort and coordination across multiple independent stores.

In summary, while Expansion Stores may pose IT management and coordination challenges, Shopify Markets provide the advantage of seamless localization and efficient content customization. Additionally, the SEO boost offered by Markets through subfolders, URL customization, and content translation further strengthens the online presence and visibility of brands in their target markets.

Geolocation

In the past, redirecting customers between stores posed challenges when choosing between Expansion Stores and Shopify Markets. However, Orbe, has overcome this issue. With Orbe, brands can seamlessly connect multiple Expansion stores and Shopify Markets, and redirect customers to the appropriate shopping experience based on their location and preferences.

This breakthrough in functionality means that the decision between Expansion Stores and Shopify Markets no longer needs to hinge on geolocation concerns. Regardless of the chosen setup, Orbe provides an efficient solution that ensures a smooth and personalized shopping experience for customers.

To learn more about the best Shopify geolocation apps and their distinctions, we suggest reading this other comparison on our blog.

Apps Compatibility

Since the launch of Shopify Markets in August 2021, many apps in the Shopify App Store still have limitations when integrating with Shopify Markets. This can be due to Shopify's restrictions or the costs associated with adapting apps to support these global selling features. While these limitations are expected to decrease over time, as of 2023, it can be concluded that Expansion Stores offer better app integrations and ecosystem compatibility.

Conclusion

In conclusion, it is important to acknowledge that no definitive declaration can be made regarding the superiority of one option over the other. The ultimate choice between Shopify Markets and Expansion Stores depends on the unique needs and structure of each brand. Throughout this article, we have highlighted the main advantages and disadvantages associated with each setup, allowing brands to make informed decisions.

It is evident that the Shopify team is committed to enhancing Shopify Markets and addressing the challenges it currently faces. We anticipate ongoing efforts to improve it and provide solutions to the identified limitations. However, Expansion Stores will continue to serve the needs of brands with specific requirements that have been discussed.

Looking ahead, it is expected that the implementation of Shopify Markets will experience a higher growth rate compared to Expansion Stores in the coming years. This can be attributed to the ease of setup offered by Shopify Markets. With its user-friendly interface and streamlined processes, businesses can quickly establish a presence in new markets and start selling in local currencies. The simplicity and accessibility of setting up Shopify Markets make it an attractive choice for brands seeking efficient global expansion. As a result, the adoption and utilization of Shopify Markets are likely to increase at a faster pace, facilitating the growth and reach of businesses worldwide.