3 Best Ecommerce Stocks to Buy in October


The e-commerce space has grown rapidly in recent years and the pandemic has accelerated the trend. However, there is still significant room for growth. According to some estimates, the market will reach $17.53 trillion by 2030, registering a compound annual growth rate of 15.1% by then.

The opportunity is enormous, and while many stocks are struggling in this lucrative sector, several stand out. Let’s look at three: Amazon (AMZN -4.77%), MercadoLibre (MELI -5.08%)and Etsy (ETSY -4.06%).

AMZN data by YCharts

1. Amazon

Amazon leads the retail e-commerce segment in the United States, with an estimated market share of 37.8% in June. It’s well ahead of second place walmartwhich held a 6.3% share.

Amazon’s valuable brand name helps it attract customers who often stay for the benefits. The company offers free one- or two-day shipping on thousands of items that are typically cheaper than what customers can find on other platforms. Amazon has ranked as the cheapest online retailer for five consecutive years, according to an annual study conducted by research firm Profitero.

Like many e-commerce specialists, Amazon benefits from the network effect because the value of its platform grows with more users. Online merchants looking for a large customer base will look to the biggest platforms, and Amazon is one of them. And as the number of merchants on his website increases, he attracts more customers.

Amazon will benefit from increased e-commerce adoption thanks to the strong lead it has already built. And those who invest in this company get more than just its e-commerce business. Amazon’s high-margin cloud computing unit is running full steam ahead. The company is also leading the cloud industry, a market that is on a solid growth trajectory.

Amazon has not emerged unscathed from the recent downturn. Its e-commerce unit was particularly hard hit. But with leadership in two major industries ripe for growth, the tech giant can turn the tide and get back to its market ways, making it a great stock to buy and hold for a while, especially in the future. current levels.

2. MercadoLibre

MercadoLibre has earned its nickname of “Latin America’s Amazon” by becoming the region’s largest e-commerce player. It leads all online marketplaces operating in Latin America in terms of monthly visits. And just like the original Amazon, MercadoLibre also benefits from a network effect – one of the main reasons it should remain at the top of the pecking order where it operates.

Newcomers looking to challenge MercadoLibre will need to make substantial upfront investments. Providing benefits such as day shipping requires building or acquiring the infrastructure to do so in various countries. It takes time and money. MercadoLibre has already done this – and continues to do so.

In addition, MercadoLibre offers a whole ecosystem of services. The company operates a fintech platform known as MercadoPago, a service that allows sellers to ship their orders throughout Latin America, known as Mercado Envios, and Mercado Shops, which allows merchants to create online storefronts.

All of these add-on services allow MercadoLibre to provide merchants and sellers with everything they need to succeed, keeping them from jumping ship. In other words, the tech giant also benefits from high switching costs. MercadoLibre will benefit from the increase in e-commerce penetration in Latin America, where it is lower than in other countries, such as the United States and China.

The company still has years of growth ahead of it. Don’t focus on the past year, where he struggled in the market.

3.Etsy

Etsy’s business differs slightly from that of its competitors in that the company’s platform primarily focuses on vintage and handmade products. On the one hand, this can be seen as a bad thing, as the pool of items sold on the platform is much smaller than it would otherwise be – only a number of items are handmade .

However, Etsy’s focus on this small niche is actually a strength. The company has become the go-to platform for buyers and sellers in this category, giving it a network effect with those interested in handmade items.

Etsy has suffered this year as revenue growth rates have plummeted, a familiar story on Wall Street with companies that excelled early in the pandemic. The good news is that Etsy still has plenty of white space within its target market. The company estimates a total addressable market of $2 trillion, of which it has captured a tiny 2.6% market share.

Etsy isn’t the only company in this space, and it won’t be the only ones taking advantage of this vast and growing market. However, he is one of its most important players and, thanks to the competitive advantage he has built, he is well positioned to progress steadily as he increases his revenues and profits. Etsy stock price will follow.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Prosper Junior Bakiny holds positions at Amazon. The Motley Fool has posts and endorses Amazon, Etsy, MercadoLibre, and Walmart Inc. The Motley Fool has a Disclosure Policy.

Previous Micro-loan disbursements increase by 14% - Newspaper
Next Will the scholarship be open on Columbus Day?