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Amid a privacy storm abroad, Shopify quietly expands in SA

Shopify is using artificial intelligence to enhance user experience and internal efficiency. (Photo: David Kawai / Bloomberg via Getty Images)

By Kara le Roux

14 May 2025

The e-commerce giant powers more than 18,000 online stores in SA. A revived lawsuit in the US has raised questions about what Shopify knows – and consumers don’t – about data trails left behind.

You might not know it, but Shopify probably knows you. If you’ve bought a T-shirt, browsed for a side table or abandoned a cart full of skincare products at 1am, your clicks may have passed through the back end of Shopify.

The Canadian platform underpins 18,148 South African online stores, including major retailers such as Pep, Edgars and Ackermans. Its appeal lies in its simplicity: you don’t need a developer, warehouse or business degree to get started. In a country grappling with a 31.9% unemployment rate, Shopify acts as a digital launchpad for entrepreneurs.

Although the platform continues to scale up in Mzansi, its global reputation is being tested thanks to a revived data privacy lawsuit in California.

California calls Shopify to court

Reuters reported on 21 April on a US federal appeals court ruling that reinstated a class action lawsuit against Shopify.

The plaintiff, Brandon Briskin, claims Shopify planted tracking cookies on his iPhone without consent after he purchased activewear from a retailer using Shopify’s platform. He alleges the data collected was used to build a consumer profile that was then sold without his consent.

Shopify, backed by the US Chamber of Commerce, contended that the ruling could unfairly subject global service providers to lawsuits in unrelated jurisdictions.

The Shopify surge

In South Africa, it seems that Shopify has become the visa stamp for joining the online retail economy.

According to data from Store Leads, a platform that provides e-commerce store data, Shopify’s usage in South Africa grew 23% year on year in the first quarter of 2025. Cape Town leads the pack with 4,426 stores, followed by Johannesburg (2,377) and Pretoria (1,426).

Apparel is the biggest category, but beauty and fitness as well as home and garden are fast climbers.

The appeal is obvious: Shopify removes the complexity and cost of digital retail. Businesses and entrepreneurs can focus on their product while Shopify handles payments, templates, search engine optimisation and even product descriptions.

Shopify’s global performance reflects its local traction. In its latest results for the year to the end of December 2024, the company reported a 31% year-over-year revenue jump, with full-year revenue climbing 26%. Its free cash flow margin expanded to 22%.

What is Shopify doing with clicks?

Shopify’s data privacy policy is filled with tech industry boilerplates. Yes, it collects data; yes, it’s to improve services; yes, it complies with the EU’s General Data Protection Regulation and the California Consumer Privacy Act.

The fine print hides in the footnotes. Consent falls on the merchant. Cookie disclosures are optional unless you’re in a regulated zone. If you’re using a stock Shopify theme, chances are you’re deploying cookies and collecting user data.

The privacy policy states that it does not sell customer data to third parties, but it may share your data with some of its partners for specific purposes. They include marketing, advertising and analytics partners to personalise ads and understand user behaviour.

Read more: How to protect your data privacy: A digital media expert provides steps you can take and explains why you can’t go it alone

It doesn’t seem to be malicious, but it’s murky. Many small businesses may not be legally literate in digital compliance, and so ignorance can become a liability.

Popia? It’s barely known

South Africa’s data privacy law, the Protection of Personal Information Act (Popia), is meant to protect consumers from forms of data mining that go unnoticed.

Although Popia is a robust framework on paper, enforcement remains patchy in practice. It applies to anyone collecting user data in the country, whether it’s a Silicon Valley behemoth or a Joburg candle maker with a website and a dream.

“Even if a company does not have its headquarters in South Africa, it could still be subject to compliance with Popia if it uses processing means, for example data or telecommunications infrastructure, in South Africa,” said Wendy Tembedza, tech law expert and partner at Webber Wentzel.

Read more: A fresh perspective: Confessions of a convert to the Popi Act

If you’re running an online store, you don’t get to plead ignorance. “Popia requires that businesses provide users of their websites with certain minimum information through a privacy policy,” Tembedza said. That includes the data you’re collecting, why it’s being collected and what you plan to do with it.

“Popia introduced controls that have significant impact on businesses that sell customer data,” Tembedza told Daily Maverick. Direct marketing without consent is also tightly regulated.

Shopify helps entrepreneurs

Launching a business during lockdown with no technical background, Jana Leonard didn’t need a crash course in coding; she needed something that just worked. And Spotify delivered.

“Shopify powers our entire online presence, from showcasing products to processing orders and managing the customer experience,” the founder of local decor brand The Baskiti Co told Daily Maverick.

Leonard described Shopify’s back end as being “incredibly intuitive”, especially for someone without web development experience. She does worry a little about data privacy. “I’m aware they store certain data, though I’m not sure for exactly how long,” Leonard said. “But I do know our customers’ data is never sold to third parties, which gives me peace of mind.”

Tariffs, tech and tenacity

Shopify may be navigating legal challenges in California, but its ship hasn’t sprung a leak – at least not in the eyes of investors.

“Shopify can be viewed as a high-beta proxy for e-commerce growth,” Choni Goldfein, an investment analyst at EasyAssetManagement, said.

“As the macro environment evolves, particularly with new tariffs on Chinese imports and signs of decelerated consumer spending, we perceive heightened sensitivity for platforms like Shopify.”

Goldfein pointed out that many Shopify merchants rely on Chinese manufacturers. Tariffs could push up prices and squeeze margins. “Amazon, by contrast, has broader pricing power, greater vertical integration and a significant base in consumer staples, giving it more resilience in a downturn,” he said.

Read more: E-commerce could add over R91bn to SA economy by 2035 — report

How does this affect you?

Is Shopify ‘stealing’ your data?

No. The US lawsuit doesn’t allege theft, per se. It challenges how data is collected and what is done with it, especially when users aren’t clearly informed.

What about Popia?

If your online store collects user data, the Protection of Personal Information Act applies. It’s your job to disclose this clearly.

Can you keep using Shopify?

Yes. But check your cookie settings and add a privacy policy. Digital convenience should not equate to blind trust.

Shopify logo Shopify is using artificial intelligence to enhance user experience and internal efficiency. (Photo: David Kawai / Bloomberg via Getty Images)

The company’s next move seems to be geared towards artificial intelligence (AI) to future-proof its value proposition.

Its Shopify Magic suite now includes AI-generated emails, blogs and product descriptions. Shopify Sidekick, a new AI assistant, helps merchants with business decisions, theme edits and analytics.

“The company is building with AI at the core to enhance user experience and internal efficiency,” said Shaun Krom, a portfolio manager and chief investment officer at EasyAssetManagement.

Still, consumer spending is softening. “E-commerce growth has remained notably more stable than in-person retail,” Krom said. “However, this resilience could face pressure in the coming quarters as newly announced tariffs begin to impact supply chains and consumer pricing.” DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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