The Global e-commerce market is expected to reach almost $7 trillion by 2023, up from $3.5 trillion in 2019 (Statista). In this blog we highlight three stocks which are likely to benefit from the boom of e-commerce.
Walmart (NYSE: WMT)
Although it is true that one does not immediately think of Walmart when considering e-commerce stocks, this is a mistake. In the second quarter of 2020, the company’s e-commerce sales rose 97%, bringing up the total revenue to an outstanding $137.7 billion.
Thinking that Walmart is just resting on its laurels would be the second mistake. Indeed, the company really capitalized on this sudden growth in many respects. First, they recently announced the launch of their own “prime” service – Walmart + –, with many advantages for subscribers, such as same day delivery, gas discounts and more to be announced. Also, they partnered up with Shopify in order to expand its third-party merchant network. 1’200 Shopify merchants will be able to sell their merchandise on Walmart.com, and the goal is to bring this number up to one million.
If Walmart was the all-time winner of the physical retail industry, it was a little slow jumping into the e-commerce business. However, they are now on track, and we should be on the look out for the potential success of their online ambitions.
JD.com (NASDAQ: JD)
Out of the $7 trillion total global revenue expected from e-commerce by 2023, $4 trillion belong to China alone. For this reason, JD.com is in a great position to keep growing and assert its grasp on the Asian market.
The company has been betting on heavy investment in order to build the best fulfilment network in China. And it seems to have worked. Indeed, its revenue grew 34% year over year, bringing them up to $28.5 billion in the second quarter after a 21% gain in Q1.
Let do a quick reasoning here. China’s total e-commerce market is expected to double in size in the coming years. If it does not make any major mistakes, JD.com's sales and profits should follow the same trend. It would not be a stretch to expect that its stock price should reflect it too.
PayPal (NASDAQ: PYPL)
People tend to think only of product retailers and forget about the systems that permit e-commerce such as payment platforms. PayPal is also one of the top-performing stocks within the e-commerce industry this year. With new solutions such as the One Touch checkout feature – paying in a click without needing to enter your credit card details – PayPal is contributing to making online shopping an easier and more seamless experience.
As forerunner to the development of the online payments industry, PayPal has delivered important returns to its shareholders. We should also note that PayPal crushed its earnings in Q2 with the best quarter ever. Their earnings rose 85% year to year and amounted to $1.5 billion, with a revenue of $5.3 billion. Payment volumes reached $222 billion.
They also own Venmo, a peer to peer payment platform in which volumes have been growing continuously. This trend is expected to hold, as users spend more and more time online and are turning towards digital apps to send money rather than cash transactions.
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