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Politicians and academics are pounding the table over worries that Big Tech has grown too dominant. They see Amazon.com as having all but won the Internet game, squashing the competition and leaving little hope for new entrants.

Not so fast. It’s often when companies look most unstoppable that they are at the greatest risk of disruption. Indeed, the e-commerce world is already pushing back on the Amazon monopoly narrative.

Without using Amazon (ticker: AMZN) or eBay (EBAY), small merchants are flourishing online—thanks to the platform, services, and tools of the cloud-based software company Shopify (SHOP).

It is a huge opportunity; eMarketer forecasts that global online sales outside China will grow by 12% annually through 2022, from $1.4 trillion last year. The firm says e-commerce is still just 8% of the total global retail market, excluding China.

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Many companies have tried to remove the friction of online sales. Most have failed. EBay famously bought GSI Commerce, an early leader in creating online shopping sites, for $2.4 billion in 2011 and sold it for just $925 million four years later.

Shopify has been steadily growing its own platform since 2004, when Tobias Lütke, a scrappy software engineer, tried to sell snowboards online. When he couldn’t find e-commerce software that worked well, he built his own. That business grew into Shopify, which Lütke continues to run from the company’s headquarters in Ottawa.

So why has Shopify thrived?

Famed venture capitalist John Doerr once said about winning in business: “Ideas are easy, execution is everything.” Shopify has executed. The company uses cloud computing to offer better reliability, lower upfront costs, and scalability to more than 820,000 merchant customers, generating revenue through a combination of monthly subscription and transaction fees.

The company’s revenue has grown an annualized 80% over the past five years. Since its initial public offering in May 2015, Shopify stock has risen 1,100%, versus the market’s 40% gain.

The company has expanded Lütke’s original online-store-creation offering with payment products, point-of-sale hardware, shipping services, and bricks-and-mortar inventory management. It is now part-Square, part-Amazon, part-back-office operations, and part-financial services.

Shopify says its online platform—the aggregated sales of its U.S. customer base—ranks as the third largest in the country after Amazon and eBay. Moreover, the company’s point-of-sale systems are in more physical stores than Walmart, Apple, and Target have, combined.

“Shopify’s ascent corresponds to the rise of direct-to-consumer brands, and the shift of [small businesses] to online storefronts,” Andrew Lipsman, principal analyst at eMarketer, wrote in an email. “Shopify has dramatically lowered the barrier to entry for merchants, allowing them to traverse geographic boundaries and go direct to their customers.”

Thomas Epting, a Shopify executive, says the company is driven by its mission to help entrepreneurs. He cites three reasons for why merchants choose Shopify over Amazon: Stores want to maintain a direct relationship with their customers; they want to create unique branding experiences versus shipping Amazon-cloaked boxes; and businesses worry that Amazon will one day create lower-priced knockoffs of their products.

“Shopify’s merchants want to compete on the same service level [as Amazon], but do not want to give up their buyer data, their branding experience, or ultimately their business,” he says.

Angélique Chmielewski, founder of lifestyle home products seller Nalata Nalata, says Shopify helped her online boutique expand its presence. Like many Shopify customers, Nalata Nalata has made the jump from online-only to brick and mortar, with a store in lower Manhattan. “The integrated inventory management system has been incredibly useful and worked well for us,” she says.

Last month, Shopify took another big step toward becoming a viable alternative to Amazon. It unveiled the Shopify Fulfillment Network, which will give merchants the ability to offer timely deliveries under their own branding, along with affordable shipping rates.

Epting, director of product for Shopify’s new fulfillment network, says that the company’s scale and data allow it to use predictive analytics to put goods in warehouses close to eventual customers.

So where does Shopify go from here? Its shares have surged 127% this year, versus the S&P 500’s 19% gain. If it was in the benchmark index, it would rank No. 1 in return.

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But Shopify stock isn’t cheap. It trades at nearly 500 times the consensus earnings forecast for the next 12 months. Last month, several Wall Street firms downgraded the stock on valuation concerns.

While that valuation is certainly stratospheric, as a multiple of revenue, the air is not quite as thin. The stock commands 22 times estimated forward sales of $1.6 billion. Shopify isn’t trying to optimize for near-term profit; it estimates that the total addressable market for its services to small and medium-sized business is $70 billion a year.

If Shopify captures a larger piece of that market over time, it can grow into its valuation, as Amazon has done over the past decade.

“As a growth investor, the endgame isn’t calendar 2020 or 2021,” says Brian Peterson, an analyst with Raymond James. “It is how big could Shopify be five, 10, or 20 years from now.”

Write to Tae Kim at tae.kim@barrons.com