Future of eCommerce
Buying eCommerce stocks is definitely a winning strategy, especially now. Without a doubt, this market has been performing excellently in recent years. But the COVID-19 pandemic only accelerated the growth of the sphere in terms of profitability, not to mention qualitative and quantitative development.
Moreover, the number of emerging brands is increasing. Thus, the choice of where to invest has widened as ever before. Not only extremely expensive Amazon stocks are worth having, although it’s undoubtedly amazing. However, there are many more appealing yet affordable options around the globe!
So, let’s consider the eCommerce market condition, stock market trends, and credible eCommerce players to invest in.
Explore Striking Stats About eCommerce in 2020-2021
Online sales have always been a perspective and lucrative field for doing business and investing. As digitalization is evolving and devices are getting more convenient in use for all purposes, eCommerce is increasing its share on the whole retail market. In 2005 in the USA only 5,1% of the sales in retail were from the web. In 2019 the share increased to 15,8%. Year after year, the percentage of online sales rose steadily.
But then the COVID-19 pandemic started. This horrible situation has turned out as a real goldmine for eCommerce! For instance, in the US, the percentage of eCommerce sales in 2020 soared to 21,3%! Shopify, in their fresh study, upholds these unbelievable digits by the global stats. Reportedly, 16,4% of all retail sales were made online.
And this might be a historic turning point! During the pandemic, approximately 84% of consumers are buying online. This sector has already gained about 150 million newbies. People certainly got used to doing shopping on the internet. It’s handy, fast, and almost doesn’t require interaction with other human beings. Therefore, the eCommerce and mCommerce market, in particular, anticipate a further increase in the number of buyers and the sales volume as well.
Many of the prominent players in the digital commerce market are getting ready for the good times by rebuilding their websites as browser-run PWAs, or progressive web apps. Due to their blazing-fast speed and flawless UX/UI on every device, PWAs are extremely convenient for customers which consequently affects companies’ revenues. That’s why plenty of successful eCommerce PWA examples have recently emerged, including the renowned company Alibaba which we’ll discuss a bit later.
Specialists believe that the online retail revolution now is only at the very start. The conclusion here is simple: eCommerce stocks can bring about remarkable returns.
Get Acquainted with Best Growth Stocks
Probably, you’ve already known that it’s fairly simple nowadays to become a shareholder. It just takes several steps, from creating an account on the online brokerage to placing the order. But what should you choose when it comes to the process of investment itself?
Experienced investors advise looking for growth stocks. There are companies whose earnings upsurge faster than it’s seen on average on the market. Such businesses often create innovations or offer on-demand services and products to new markets that bring them success.
As usual, growth stocks are more costly than other shares. But for shareholders owning growth stocks promises significant returns in the future. Sometimes it seems they cost a fortune, but such shares have the potential to make you a fortune indeed.
How to Choose the Company to Invest in?
Examine all the options wisely in order to invest in reliable companies. There are three steps to choose the best variants from an infinite list of available companies.
Step 1- Study the macro trends on the market. Then find firms that perfectly match these tendencies in terms of their positioning. It’s a sign of their future well-being. Now, these trending areas include eCommerce, digital advertising, digital payments, cloud computing, and streaming entertainment.
Step 2- From the initial list, pick out only those businesses that have remarkable competitive advantages. For instance, tremendous scale and scalability (e.g., Amazon).
Another one is network effects. The larger audience a company has, the harder it is for other firms to supersede it (e.g., Facebook).
One more is high switching costs when it’s hard and/or expensive to go to another service so it’s unlikely to leave the provider (e.g., Shopify).
Step 3- Then opt for those brands that have access to a larger audience of ongoing and potential customers.
Best Growth Stocks to Consider
Let’s primarily take a look at the most prominent brands whose stocks are currently regarded as particularly attractive.
Established in 1994 as an online book store, Amazon now includes food delivery from Amazon Fresh, Amazon Prime Now, and Whole Foods, cloud solutions from Amazon Web Services, and many more evolving directions. Amazon’s current revenue and other key indicators look fantastically well, so its stocks are now worth roughly $3,000. But if you don’t want to spend such a sum on stocks, you can still invest by purchasing fractional shares.
This Canadian company founded in 2004 specializes in building online stores and providing additional eCommerce solutions. Shopify reported that it supports about 1 million business clients in 175 countries! Lately, Shopify’s B2B services were extremely demanded, and the company showcased a brilliant CAGR (compound annual growth rate) of 46%. That’s why Shopify is presently regarded as a pretty perspective entity for those who seek where to invest.
3. Alibaba Group
The largest Chinese eCommerce company founded in 1999 focuses on B2B, B2C, and C2C sales as well as cloud services. In 2020 Forbes named this corporation the 31st-largest public company in the world in the Global 2000 list.
4. Are There Others?
The pandemic favorably affected all three of these businesses. And their status is highly likely not only to remain stable but also to get better. Besides this, many recommend taking into account investing in two other evolving eCommerce players, MercadoLibre from Latin America and JD.com from China.
By the way, Bloomberg also advises giving attention to a couple of “Dark Horses”. Amongst the companies to note are Delivery Hero, ESR Cayman, Kroger, Merlin Properties, Primerica, and Zalando.
To Sum Up..
Since the internet and devices allow us to purchase easily and super quickly, eCommerce will take over a larger share of the retail market in the coming years. So, it’s a worthy idea to join this incredible force and make money. Just bear in mind that investing is a risky business in any case. Thus, prepare carefully, study some stock market dos and don’ts, and use the advice from experienced shareholders before making a final decision. Good luck!