7 Stocks to Buy for the Future of E-commerce
The global e-commerce industry could see up to $6.3 trillion in revenue just this year, according to Shopify.com. By 2026, it could be up to $8.1 trillion. That tells us there’s plenty of big opportunity to grow around for e-commerce stocks. And clearly, that’s worth paying attention to — especially for companies like Amazon, Chewy, and MercadoLibre to name a few. In fact, let’s take a look at seven of the most interesting e-commerce stocks to pay very close attention to.
E-Commerce Stocks: Chewy (CHWY)
Investors interested in the growth in the pet industry should consider e-commerce stocks, like Chewy (NYSE:CHWY). The company is a leading online retailer of pet products and offers a wide range of pet-related products, including food, toys, and health supplies, through its e-commerce platform. Chewy has grown rapidly in recent years and has established itself as a major player in the pet products industry. The pet care industry is expected to grow at a modest but respectable rate of 5.1% annually through 2030. That modest growth, combined with market size, measured at $46.1 billion in 2021, makes Chewy a logical investment.
2023 has seen CHWY stock improve from $35 to $45 as growth stocks have rebounded on bullish expectations. The battle against inflation is far from over but signs of improvement have helped Chewy and other growth stocks thus far. The company reported $2.53 billion in sales in early December, a year-over-year increase of 14.5%. That growth serves as a strong argument favoring Chewy as a buy for the future of E-commerce.
E-Commerce Stocks: MercadoLibre (MELI)
MercadoLibre (NASDAQ:MELI) is the leading online marketplace in Latin America. The company operates across the entire region, offering a wide range of products and services to consumers and businesses. MercadoLibre has become one of the largest e-commerce platforms in the region, providing a convenient and accessible way for people to buy and sell goods online. The company has seen significant growth in recent years and is well-positioned to benefit from the continued growth of e-commerce in Latin America.
MELI stock has garnered quite a bit of attention in 2023, with demand driving prices higher. That said, a recent lull in prices has opened another opportunity to buy with shares having significant upside. MercadoLibre holds a dominant position within Latin American e-commerce. It is often referred to as the Amazon of Latin America with its 45% third-quarter sales growth indicating why investors remain interested. MercadoLibre’s fintech revenues are outpacing its overall growth, serving as a further point of attraction.
E-Commerce Stocks: Pinduoduo (PDD)
Pinduoduo (NASDAQ:PDD) is a leading Chinese e-commerce platform, which allows users to purchase products at a discount by pooling their buying power. The company has grown rapidly, becoming one of the largest e-commerce platforms in China. With China having recently removed Covid restrictions, Piduoduo should garner much more interest as its home country’s economy rebounds. Pinduoduo is a growth company in the purest sense. Its Q3 revenues of $4.991 billion represented a 65% increase YoY. That level of growth is exceptional in a company of Pinduoduo’s size. Fortunately, the company reported a net income of $1.488 billion and is highly profitable which is often not the case in many other growth stocks.
As China continues to mature and its economy improves, PDD stock should rise. It is an American depositary receipt (ADR) and therefore subject to the geopolitical risk inherent in U.S.-China relations. That said, its upside arguably outweighs those negatives.
Carparts.com (NASDAQ:PRTS) is a leading online retailer of automotive parts and accessories in the United States and the Philippines. The company offers a wide range of products for various types of vehicles through its e-commerce platform. PRTS is well-positioned to benefit from the continued growth of e-commerce and the automotive aftermarket sector. It’s also benefiting from a stronger automotive parts market. The company experienced strong growth in 2022 with record Q3 revenues of $164.8 million, up 16% YoY. Those strong sales resulted in gross profit that increased 19%, to $56.1 million. The company represents one of many growing e-commerce niches investor capital will continue to follow for its growth.
Farfetch (NYSE:FTCH) is a leading global technology platform for luxury fashion. The company was founded in 2007 and operates an e-commerce platform that connects consumers with a network of over 1,000 boutiques and brands from around the world. Farfetch offers a unique and curated shopping experience for luxury fashion lovers which should benefit from overarching trends moving forward.
FTCH is well-positioned to benefit from the continued growth of the luxury fashion and e-commerce industries, as well as the increasing demand for high-end fashion products. Investors interested in the fashion and technology sectors may want to consider FTCH as a potential investment opportunity. FTCH stock is a reasonable investment to consider based on anticipated growth in personal luxury between 3-8% this year. Overall market value is anticipated to increase by 60% beyond 2022 levels by 2030. The firm’s Q3 results weren’t especially strong meaning that the stock’s current discount price could represent a strong entry point if those growth figures are true and also apply to Farfetch.
Jumia Technologies (JMIA)
Jumia Technologies (NYSE:JMIA) is an e-commerce platform that operates across Africa. The company was founded in 2012 and operates in 11 African countries, offering a wide range of products and services, including fashion, electronics, and home goods. Jumia has established itself as a leading player in the African e-commerce market and has a growing customer base.
If MercadoLibre is a buy for the massive potential in e-commerce growth across Latin America, then the same is true of Jumia in relation to African e-commerce. Jumia’s operations across 11 million African nations cover 600 million customers accounting for 70% of the continent’s GDP. The e-commerce market in the region is expected to experience a compound annual growth rate of 26.5% between 2023 and 2028. Jumia could very well represent the future of e-commerce across Africa, making its potential very strong. Through the first 9 months of 2022, Jumia’s revenues grew by 34.2%, reaching $155.4 million. A strong growth narrative favors JMIA stock but the company does continue to produce losses.
RumbleON (NASDAQ:RMBL) is a Texas-based e-commerce company focused on the sale of pre-owned vehicles. RMBL is well-positioned to benefit from the continued growth of e-commerce and the increasing demand for online solutions in the pre-owned vehicle market. Investors interested in the technology and automotive sectors may want to consider RMBL as a potential investment opportunity.RumbleON primarily sells pre-owned power sports vehicles. In the most recent quarter, pre-owned power sports sales accounted for 92.4% of overall unit sales and 81.9% of overall revenues.
RumbleON’s year-over-year growth has been impressive. Unit sales increased 249% in Q3, with 19,908 units sold. Revenues increased to $470.3 million, up 113% YoY. That said, the company did decline on a sequential basis following $546.1 million in revenues in Q2. Encouragingly, RumbleON was in the black during both of those periods, posting respective net incomes of $14 million and $3 million.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.