Shopify says changes to fulfillment network will not hit capacity

The logo of Shopify is seen outside its headquarters in Ottawa, Ontario, Canada, September 28, 2018. REUTERS/Chris Wattie//File Photo

Jan 24 (Reuters) – Canadian e-commerce giant Shopify Inc (SHOP.TO) said on Monday proposed changes to its fulfillment network would not reduce capacity to meet the needs of its customers, helping shares reverse course to trade up 7%.

Shares plunged nearly 9% earlier in the session to an 18-month low, weighed down by a global tech sell-off as well as a report last week that Shopify was terminating or reducing contracts with warehouses and fulfillment partners, which could reduce its capacity to ship orders from merchants.

“We will be making changes to (Shopify fulfillment network) to help merchants compete with big-box retailers, such as prioritizing two-day shipping at affordable prices and access to easy returns for U.S. shoppers,” the company said in a statement on Monday.

Reporting by Nivedita Balu in Bengaluru; Additional reporting by Chavi Mehta, Editing by Krishna Chandra Eluri and Sriraj Kalluvila

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