Which E-Commerce Businesses Should I Invest in This Year?

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As we continue going forward in2021, the stock market is set to see a rise inthe value of several e-commerce businesses. As a result of the ongoing pandemic, there has been an increase in demand for an online presence, in both our personal lives and for businesses, as well as a huge surge in the use of online retail – which is not set to change this year. Seen as a long-term investment, as e-commerce companies continue to develop and grow, traders should be looking to learn more about how to trade stocks and adding shares of this nature to their portfolio for 2021. So, we’ve put together the e-commerce businesses that are on our ones-to-watch list.

MercadoLibre (MELI)

Based in Latin America, MercadoLibre (MELI) is the largest e-commerce company and payment platform for that region. First launched in 1999, the company has developed to not only include an online marketplace, but also a payments business, called Mercado Pago. This was a wise move, as majority of its users came from an unbanked population, and looking for a means of paying via online.

Due to a shift from physical shopping to online shopping, rising Latin American internet users, and the acceleration of these factors due to the recent global pandemic, MELI continues to expand. From the years 2015 to 2019, the registered users grew from 144.6 million to 320.6 million, and at the beginning of 2020, the company saw an additional 46.8 million users of the site. Its stock has also quadrupled in value over the past five years. MELI now operates across 18 countries, with its highest markets being Brazil (65% of its revenue last quarter), Argentina (19%), and Mexico (12%).

Although some may deem MELI stock to be initially expensive, market analysts expect the revenue of the company to rise by 67% over this year, with earnings predicted to double the year after.

Pinduoduo (PDD)

One of the largest e-commerce companies in China (third behind Alibaba and JD.com), Pinduoduo (PDD) had a staggery 731 million active buyers, just over the past year, with expectations that this will continue in 2021. It has become a leading site for the purchase and shipping of fresh fruit and vegetables.

Despite only launching five years ago, the e-commerce site has gone from strength to strength, with its revenue soaring by 130% last year and an expected rise of 84% in revenue this year. In terms of PDD stock, their value has also quadrupled over the past year, and is a surprisingly affordable purchase compared to other e-commerce companies.

Shopify (SHOP)

This Canadian e-commerce company is not one that is based on consumers, but in fact supports over 1 million business to provide a platform for their own retail websites. Now operating across 175 countries, Shopify (SHOP) was launched back in 2006. With continuous development since then,it has also benefited from the increase and need for businesses to diversify into the online space, due to the pandemic. This has meant there has been recent and accelerated growth for the SHOP company, and a record performance to date.

Amazon (AMZN)

As one of the biggest and most obvious e-commerce companies in the world, Amazon (AMZN) is the top e-commerce business to invest in. A continuously well-established online retail site for over 25 years, AMZN has also profited from a pandemic lifestyle and the increased demand in online shopping. Not only has it seen a huge revenue of $282 billion last year from its e-commerce platform alone, it also introduced over 175,000 new jobs. And there is no expectation for this growth to stop.

The AMZN company has always diversified its business, with the launch of Amazon Fresh groceries and Amazon Prime Video over the years. Most recently, the introduction of Amazon Web Services (AWS) has seen the company now deal with business applications, machine learning and analytics – a sector of the business which on average generates a revenue of $40 billion. Market analysts expect that AMZN stocks could rise even higher this year as the shift to online shopping continues to increase, and are seen as a solid long-term investment.

 


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