The Two Most Enticing E-Commerce Stocks for 2017
Since the inception of the Internet as consumer space, e-commerce, and in particular, on-line retailing, has been a sector experiencing constant growth. On-line retailing behemoths such as Amazon have become synonymous with a particular type of purchasing experience, and more and more people are buying all manner of products via their personal computers, laptops, tablets and mobiles.
On-line retail sales figures in Western Europe grew by 15.8% between 2015 and 2016 , up from £174.76 billion to £201.90 billion, whilst the figures for North America saw a growth of 14.4%, from £269.46 billion ($349.25 billion) in 2015, to £308.26 billion ($299.53 billion) in 2016. Furthermore, both markets are expected to grow a further 14.2 % and 14.9% , respectively, in 2017.
Considering the continued growth of the online retail market, e-commerce stocks are considered by many analysts to be one of the most fecund sectors of the stock market. Various other sectors, including the big hitter of the 2000s, consumer electronics, are seeing a decline in returns, and even though many of the most robust e-commerce stocks are from huge name companies, this doesn’t necessarily mean that they have plateaued in terms of value and return. In fact, two of the most tempting e-commerce stocks illustrate both the durability and innovation of this sector; one is a giant, and the other a growing force.
Amazon are the biggest name in the on-line retail world, even to the extent that the existence of Amazon boosts growth in other e-commerce businesses, who use it as a platform for their own products. Buying Amazon stock may seem, initially, like arriving very late to the proverbial party, however, there is potential for yet more growth in their value. One of the key drivers of this is Amazon’s nascent step into India. Of course, other businesses have tried and failed to penetrate the Indian market, but Amazon are primed to succeed where others have failed. This is because India now has a huge middle class, with households boasting a disposable income of at least $10,000 numbering 50 million in 2015. Furthermore, there are over 1 billion mobile phone subscribers in India, and Amazon are targeting these consumers through their mobile apps, as well as offering culturally relevant nuances to their service, such as allowing customers in India to pay with cash upon delivery. Amazon aren’t finished yet, and their stock could be set to rise considerably if their foray into India is successful.
Stamps.com Inc is a fairly self-explanatory company name – they let you print your own postage and shipping labels, removing the need to buy stamps. Considering the huge market for online retail, it is safe to assume there is an enormous volume of packages being sent through the mail. What Stamps.com have capitalized on is the struggling state of the US Postal service, which has been losing money for a long time, and whose cost-cutting measures included the closure of thousands of local branches. Stamps.com saw their total revenue jump by an enormous 79% from the third quarter of 2015 to the third quarter of 2016; in the same period their net income grew by 148%. Similarly, to Amazon, Stamps.com are an e-commerce business that also facilitates the growth of other e-commerce businesses – in this case by providing them with a convenient and cost-effective way of managing their outgoing deliveries- and the value of their stock could rise significantly over the next 1-3 years.
Photo credit: Jimi Filipovski