You don’t need us to remind you that this past year has seen all of us spend far more time at home. This has forced us to change our spending habits, adjusting to a new normal as best as we possibly can. One of the sectors that has greatly benefitted from our habit adjustments has been e-commerce.
Since physical retail was forced to close for a prolonged period, in an attempt to reduce transmission of coronavirus, the only access that we had to non-essential items was via online sites. This change in consumer behaviour has seen the ecommerce industry boom, with companies changing their strategies to cater for the increased demand from online shoppers.
Throughout 2020, e-commerce took the world by storm and continues to do so in 2021, with global e-commerce traffic expected to increase by 400 million this year. With such impressive growth forecasted, it seems like e-commerce stocks could be a valuable investment for the future. In this article, we will list the reasons why e-commerce stocks could be worth buying right now.
The effects of COVID-19 on e-commerce
As aforementioned, the pandemic has had a positive effect upon the e-commerce market. The increased flow of online traffic and purchases has seen the market’s revenues increase to $2.43 trillion in 2020, which is a 25% increase on the previous year’s figures. At the end of 2020, the US e-commerce market became the second-largest worldwide, behind the global leader, China.
The biggest contributor to the e-commerce industry is fashion, so if you, like most people, have taken to ordering the latest trends online, you’ve contributed to its staggering growth, expected to yield $759.5 billion in revenue by the end of 2021.
Other sectors that have received a notable increase in value are electronics, appliances, food, furniture and personal care. Although the retail sector has recently re-opened in the UK, this shift in behaviour has most likely changed the way that people prefer to shop and therefore, the industry will continue to flourish.
E-commerce stocks to invest in now:
- Amazon.com Inc. (NASDAQ: AMZN)
It probably comes as no surprise that this e-commerce giant is at the top of our investment priorities this year. The company has experienced impressive growth spurts year on year, and continues to grow almost 26 years after it was first established. Amazon is one of the largest global e-commerce platforms, and in the third quarter of 2020 recorded sales of $96.15 billion.
Amazon continues to thrive in 2021, and is ever-increasing its influence online as well as in physical retail, taking ownership of Whole Foods in 2017. All things considered, Amazon is a worthy long-term investment and is expected to thrive for the foreseeable future.
If you’re considering investing in e-commerce stocks, then you could benefit from using a contract for difference (CFD) trading platform, which will allow you to keep track of the stock’s value, by utilising an online site like https://www.plus500.co.uk/Trading/Stocks, for example. A CFD trading platform will allow you to speculate on the stock’s price movement, without owning the underlying asset.
- Shopify Inc. (NYSE: SHOP)
Shopify is a fairly new addition to the e-commerce scene. The Canadian platform is aimed at small businesses, to list their products and sell online. Though the company has only been around for the last decade, they now have 1.75 million sellers using their services. They have also thrived in this last year, with businesses turning to online retail to continue to operate throughout multiple lockdowns.
In 2020 the company reached record highs, experiencing a growth of 116%, with revenue from subscriptions growing by 41%. These impressive figures enabled the company to record a revenue of $977.7 million in February 2021.
If you’ve been considering buying shares in e-commerce stock then the current climate, where e-commerce has experienced a staggering growth spurt, could be the best time to open a position. Spurred by our change in behaviours, this boom is estimated to continue into the future, as our shopping habits alter and the e-commerce experience improves further.