Successful growth investment often comes down to identifying which industries are about to grow. And of all the growing markets in the world right now, few are more promising than e-commerce.
According to Statista, global retail e-commerce sales will exceed $ 6.5 trillion by 2023, compared to $ 3.5 trillion in 2019. Those sales will be largely driven or conducted by a select group of companies.
Here are five companies that can help you as an investor claim your share of this rapidly expanding mass market.
These actions will help you benefit from the incredible growth of e-commerce. Image Source: Getty Images.
1. Visa and 2. Mastercard
When investors think of e-commerce stocks, they often overlook Visa (NYSE: V) and MasterCard (NYSE: MA). That’s a mistake. Many online purchases are made with credit and debit cards, and Visa and Mastercard operate the two largest card processing networks in the world. That makes them particularly well positioned to benefit from the growing growth of e-commerce.
Like an online toll road, Visa and Mastercard charge a small fee each time someone uses one of their cards to conduct an online transaction, and the number of times this happens is skyrocketing. U.S. e-commerce spending rose 93% year-over-year in May, according to Mastercard.
Furthermore, Mastercard’s global study showed that consumers around the world are moving further and further away from cash towards digital contactless payments. Thanks to their powerful position in the online payment processing industry, Mastercard and Visa can benefit from these megatrends more than any other business.
3. PayPal
Like the credit card giants, PayPal (NASDAQ: PYPL) is helping to enable online shopping. PayPal makes eCommerce sales easier, faster, and more secure by eliminating the need for shoppers to enter their payment information every time they buy something online. By saving buyers time and effort, PayPal also helps increase merchant sales conversion rates and, by extension, the profitability of their online stores.
PayPal stocks are also a great way to invest in the explosive growth of peer-to-peer payments. PayPal has Venmo, the fast growing mobile payment application that allows people to easily and quickly send money to other Venmo users. The Mastercard study makes clear that the coronavirus pandemic is accelerating the growth of digital cash transfers, and PayPal, thanks in part to its ownership of Venmo, offers you another great way to take advantage of this trend.
4. Shopify
While COVID-19 is driving the growth of electronic commerce, it has had a devastating impact on much of the traditional retail industry. In turn, many brick and mortar dealers turn to Shopify (NYSE: SHOP) to change your online business. Shopify provides small, and growing, businesses with almost all the tools they need to build and grow their online operations.
Shopify recently reached major partnership agreements with Facebook, Walmartand Chipotle – all of which should help drive its expansion. More than 1 million merchants already rely on Shopify to power their online businesses, and with some of the largest and most powerful companies now on board, even more merchants are likely to flock to the Shopify platform.
5. Amazon.com
It’s hard to make a list of the best e-commerce stocks to buy without mentioning Amazon.com (NASDAQ: AMZN). The online retail titan dominates many e-commerce markets around the world. Amazon, therefore, is poised to reap the lion’s share of the industry’s profits in the coming decades.
Better yet, like the other stocks on this list, Amazon offers its shareholders many ways to earn. Cloud computing and digital advertising are just some of the massive industries in which Amazon has built a powerful presence, and it is likely to enter more new markets in the coming years. Therefore, Amazon stocks provide you with a way to profit from the expansion of multiple growth markets, making it an investment that is likely to pay off handsomely for you and other investors in the long run.
