Shared hosting is a good fit for small sites, blogs and modest online stores. It is cheap, simple to run and usually lets you start WooCommerce or PrestaShop without much technical knowledge.
On that kind of hosting the server resources are shared with many other customers. You do not get your own processor, RAM or database. The provider sets the limits inside which your site may run.
When it is enough and when it starts to fall short
At low traffic this is rarely a problem. Things change when the store serves more customers, a larger catalogue, imports, integrations, scheduled jobs or ad campaigns. Product pages get slower, the cart and checkout take longer to load, and in the worst case you see errors or a short outage.
Magento Open Source on such an account usually needs more than a shared pack gives you: its own cache, a search engine and jobs that run every minute. WooCommerce and PrestaShop will start. With more parallel checkouts they often hit the process limit and the shared database.
How to check
Look in the hosting panel at CPU, RAM, disk and how many processes may run at once. Check the campaign hour, not the night. More important than homepage speed is the response time of the cart, checkout, search and product filters.
If the store regularly uses most of the available resources, slows down under heavier traffic, or starts to need Redis, its own database settings or more PHP processes, buying a bigger shared pack often stops making sense.
When to move to your own machine
That is a good moment to move to a VPS or your own virtual machine. The cost is higher. In return you get more control, more predictable resources and a server you can tune to the store.
Store operations: ecommerce. Your own machine on Proxmox or an instance in the cloud. When you have server access: diagnostic commands. When the store is down and the ticket waits in a queue: hosting escalation.
In short: shared hosting is good at the start. When the limit is the hosting, not the application, it is time to move to your own machine.