The financial market is experiencing a huge upward trend in e-commerce businesses. Investors are seeing e-commerce stocks as an attractive buy and long-term investment, and are interested in the continuing growth and development of these companies. Here are the top e-commerce businesses that investors are watching right now and the strategies they are putting in place.
Amazon
The top e-commerce to invest in is possibly the most obvious one. Amazon (AMZN) was a well-established online retail platform before the coronavirus outbreak, but its platform has continued to perform well in a new pandemic lifestyle. Humbly selling its first book online over 25 years ago, the business now ranges across a variety of industries, with Amazon Fresh branching into the groceries sector in 2007 and Amazon Prime Video offering an entertainment service. The company is doing so well, it also has introduced over 175,000 new jobs recently.
AMZN is growing at an accelerating rate, with its e-commerce business side generating a huge $282 billion in revenue in the last year. But it’s not only taking advantage of the trend in online shopping, AMZN is also benefiting from the increase in internet traffic in general, with its Amazon Web Services (AWS), that was launched in 2006. AWS contributes massively to the business, with a $40 billion revenue run rate, and handles everything from analytics to business applications to machine learning. The continuous growth, long-term plans and investing mindset of the company means that AMZN stocks are one of the best e-commerce stocks of all time to invest in.
Shopify
Although Shopify (SHOP) may not be recognised as a consumer-facing brand, the Canadian company supports over 1 million businesses of all sizes, across 175 countries, who use the SHOP platform as a means to power their e-commerce retail stores, selling both physical and digital products. Launched in 2006, the recent increase in online spending by consumers, and the need for companies to have an online presence due to the coronavirus pandemic, has seen an accelerated growth for SHOP and a record performance for the company.
Even with this rocketing growth, the company still has potential to expand into more international sales, meaning that the SHOP system may see even more increase in revenue. With this opportunity and more investment in its platform, investors may want to get it on the SHOP stock as this upward trend happens.
MercadoLibre
Founded in 1999, MercadoLibre (MELI) is currently the largest e-commerce site and payment platform in Latin American. It began as an online marketplace to sell products, but due to majority of its users coming from an unbanked population, it diversified into fintech offerings, launching its payments business in 2003, called Mercado Pago. The company now operates across 18 countries, including Argentina, Brazil, Mexico, Colombia, Chile, Venezuela and Peru. Its revenue comes from a multitude of avenues including transaction fees, payments and classified adverts.
MELI stock has roughly quadrupled over the past five years, and with an increase in Latin American internet users, the spending habits of the population turning to online shopping, and the current coronavirus pandemic accelerating the rate of online purchases, MELI is definitely one to watch for investors.
JD.com
Online retailer JD.com (JD) is commonly compared to Amazon, as it operates in much the same way, with a network of warehouses, robots and wide delivery capabilities. Also founded in the late ‘90s, it’s China’s second biggest e-commerce market, and is known for its rapid delivery and a reach to cities and rural areas that other services do not provide – a benefit amidst the pandemic.
With company investments, and an increase in Chinese online consumers due to COVID-19, JD has seen a growth in revenue and profits. Plus, with one of China’s biggest online shopping day of the year – Singles Day – having taken place on November 11th, traders may well benefit in an investment in this e-commerce business, whilst diversifying their portfolio.
Traders can take advantage of the rise in the stock prices of these e-commerce companies, and are looking to use CFD trading as part of their strategy, to optimise their investment, with the use of leverage enhancing their buying power. With CFD trading meaning that you can also invest based on the prediction of the price movements in these e-commerce stocks and can access the global market in one single trading environment, this greatly increases their exposure to the markets. An increase in an online retail and payment presence of e-commerce businesses and a rise of online shopping due to the 2020 pandemic, means that these types of businesses are a worthwhile entry in to investors’ portfolios.