E-Commerce Growth: The Bright Spot In A Weakened Macroeconomy

Amazon.com, Inc. AMZN and Alibaba Group Holding Limited BABA with its online retail service AliExpress, it is not strange that all the traditional retailers, giant companies like Walmart Inc. WMT and Target Corporation TGT keep working to increase their presence in the online retail market.

All the mentioned companies are almost like synonyms for their industry segments. But there are other players as well, which might also be a good deal for the potential investors, like Shopify Inc. SHOP and Etsy, Inc. ETSY. Let take a closer look at some latest news from those companies.

Amazon

Amazon keeps trying to increase its speed of delivery. And they are not alone. Target also keeps introducing new, faster methods of delivering, trying to increase its customer traffic as well. Amazon's new approach includes mini-fulfillment centers, allowing the customers in certain cities to have their goods delivered in just a few hours.

The customer can choose the available delivery time slot after being satisfied with his or her cart. This also means that those customers can make more than one purchase per day. On the other hand, this is not really in line with Amazon's decision to aim for a carbon-free business. Maybe with the use of electric vehicles, these two segments can be more complementary. So, on the one hand, we have faster deliveries. On the other, Amazon issued a warning that some deliveries might be delayed due to the coronavirus outbreak impact.

Alibaba Group Holding Limited

Alibaba and its online retail service AliExpress keep growing in revenues, just like Amazon. Some traders even speak of Alibaba being a Chinese Amazon. Although the effects of coronavirus are greatest in China, and businesses are interrupted due to lack of staff, both in a primary business segment as well as supporting parts (like transport and delivery companies), the fact that many people are staying at home means that they are opting for online shopping to get whatever is needed. Alibaba managed to grow its quarterly revenues for 38% whereas its non-GAAP earnings per share grew 49%. Company's new retail business revenue went up for 128%, and the international retail business 27%, local consumer service revenue had a  47% boost and cloud-computing revenue indeed reached the clouds with a 62% increase. This momentum is also here to stay.

Shopify Inc.

Shopify SHOP decided to turn to online sellers and provide them with service on how to set their virtual stores, in a few easy steps. This new approach is a grade addendum to the e-commerce market. In the first nine months of 2019, Shopify managed to grow 47% in revenues, compared to the same period the year before. Similar to Alibaba, more and more people opted for online shopping, which means, more and more online sellers can find their place in the sun. And Shopify saw that opportunity.

Etsy, Inc.

Same as Shopify, Etsy ETSY decided not to compete with the giants, but to offer something different. Etsy saw its chance in buyers and sellers of handmade goods, which is the true spirit of millennial shoppers who are for example not a fan of diamonds, giving Tiffany and Co TIF quite a headache. Q4 results which were above the expectations pushed up the stock price. That is no surprise since the company showed a 35% increase in revenue.

Conclusion

E-commerce and online shopping will probably remain as a favorite for most investors. But there are new ideas and businesses within the segment which should not be overlooked. So, let's do our best to spot them in time.

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