With the tremendous and growing success of websites like Amazon (NASDAQ:AMZN), Etsy (NASDAQ:ETSY), and Alibaba (NYSE: BABA), the eCommerce industry clearly has the potential to deliver colossal returns for investors. Each of these service providers have had blowout years, with their stocks gaining more than 50% in 2017. Investment opportunities are rife in the eCommerce industry, with stocks promising long-term gains.
Alibaba, the Chinese multinational organisation specialising in eCommerce, retail, and the Internet, is said to be a better investment than Amazon, believes financial analyst, Gorden Lam. Last year, the Chinese eCommerce giant sold over $25 billion of products on Single’s Day alone, breaking yet another record in this area. 168.2 billion RMB was generated, which is equivalent to approximately $25.3 billion in GMV (gross merchandise volume). In the first 30 minutes of the day, the eCommerce giant sold $7 billion of goods! This is an enormous difference compared to America’s largest shopping days, Black Friday and Cyber Monday, which hauled in a record $3 billion and $3.45 billion, respectively on sites like Amazon and eBay. Nevertheless, Amazon and Alibaba combined, command over $1 trillion market cap, with Amazon reigning the North American and European markets and Alibaba dominating China. Stocks for these retail leaders continue to soar. Amazon’s market cap sits at $1 trillion while Alibaba is expected to have an EPS growth rate of 35-40%, making them both tempting buying opportunities.
Investors in these eCommerce companies have been rewarded tremendously over the past 3 years, with the stocks growing at around 150% and 280%, respectively. In the next decade, Amazon plans to globalise its Marketplace by spending billions of dollars on establishing lower prices, a larger selection of products, and faster worldwide delivery. Alibaba on the other hand, is heavily invested in payment solutions and existing ecomm businesses.
Investors are increasingly turning their heads towards online retail stocks. U.S. retail sales alone totalled over $5 trillion, excluding restaurants and bars which had more than $5.7 trillion. As technology advances, so does the eCommerce market, especially in developing countries. Amazon, for example is set to break into the Indian market. If you want to invest your money in eCommerce stocks, know that this industry is only set to expand. Online sales in the U.S. are expected to climb to $485 billion by 2021, according to Statistica. It isn’t just retailers who are entering this sector- take a look at companies like XPO Logistics, Shopify, and Netflix that have jumped on the eCommerce bandwagon. It’s a service that can be used on mobile devices –90% percent of Alibaba sales, for example, were generated on mobile.
Online shopping is becoming easier, faster, and more convenient than ever and companies are improving their performance under the changing circumstances. There’s certainly plenty of growth ahead. It’s no surprise then that investors are looking towards this lucrative industry and grabbing its stocks at fast rates. eCommerce is quickly taking the world by storm and the investors inside it are destined to benefit from its success without fail.