Ecommerce stocks have soared in recent months as the coronavirus pandemic has prompted consumers to accelerate their transition to online shopping.
So it’s no surprise that three of the industry’s leading exchange-traded funds – the Amplify Online Retail ETF (NASDAQ :), Global X E-commerce ETF (NASDAQ :), and ProShares Online Retail Fund (NYSE 🙂 – are all trading near their respective all-time highs.
While the main focus has been on mega-cap players such as Amazon (NASDAQ :), Alibaba (NYSE :), Shopify (NYSE :), and PayPal (NASDAQ :), three small-cap stocks could provide a boost. some of the best growth potential in the coming months and deserve to be considered given their emerging dominance in their respective e-commerce markets.
1. Pinduoduo: Chinese e-commerce platform
Shanghai-based Pinduoduo (NASDAQ 🙂 operates a fast-growing e-commerce platform that offers a wide variety of products at low prices, from clothing and electronics to furniture and housewares, and even consumer goods. grocery store.
It is currently the third largest e-commerce platform in China in terms of gross merchandise volume, behind Alibaba and JD (NASDAQ :).
PDD held its IPO in July 2018. Over the past 12 months, its shares have climbed nearly 450% as Chinese consumers shift their shopping online due to the coronavirus pandemic.
The shares hit a new all-time high of $ 212.31 on Tuesday before closing at $ 202.81, giving the Chinese e-commerce technology company a market cap of around $ 245 billion.
PDD is trading at a price-to-sell ratio of around 36, but despite concerns over high valuations, it looks poised to continue moving up, given its emerging status as one of the leading ecommerce operators. in China.
Pinduoduo – which has exceeded expectations for its early November – is expected to release its financial results before the US market opens on Wednesday, March 10. Consensus estimates are for earnings of $ 0.02 per share, significantly better than a loss of $ 0.24 per share. one year earlier.
Revenue is expected to climb nearly 77% year-over-year to an all-time high of $ 2.97 billion, driven by strong growth in monthly active users (MAUs) and active buyers.
Investors will be eager for any update on the number of Pinduoduo users to see if it can keep up its torrid growth rate. The e-commerce platform said it had 643.4 million UAMs and 731 million active buyers at the end of the third quarter, up 50% and 36% respectively from the previous year .
The gross cargo volume (GMV) on its platform, which climbed 73% year-on-year in the third quarter to $ 214.7 million, will also be the focus.
2. Jumia: Africa’s leading online marketplace
Jumia Technologies (NYSE :), based in Lagos, Nigeria, is Africa’s leading e-commerce platform, helping millions of consumers and sellers in multiple countries across the continent to connect and transact on one wide range of products, including fashion clothes, smartphones and groceries.
Jumia, nicknamed by some “ Amazon or Alibaba of Africa ”, also offers a logistics service, which allows the shipment and delivery of packages from sellers to consumers, and a payment service, which facilitates payments for online transactions. for the Jumia ecosystem.
JMIA stock debuted on the New York Stock Exchange in April 2019 and has been one of the industry’s best performers over the past year. Shares soared 950%, thanks to strong growth in e-commerce spending in Africa.
The shares closed at $ 61.88 yesterday, following their record high of $ 69.89 reached on February 10, giving the online retailer a market cap of around $ 5.6 billion.
The Africa-focused e-commerce company is expected to release its fourth quarter results ahead of the opening bell on Wednesday, February 24. Consensus calls for a loss per share of $ 0.36, following a loss of $ 0.79 per share a year earlier.
Revenue is expected to reach $ 41.9 million, from $ 49.2 million last year, due to the ongoing transition from a leading retail company to a third-party market platform.
Over the long term, the new strategy will see the company generate increased sales commissions and fulfillment costs and is expected to lead to significant improvements in results and higher user engagement levels.
Beyond the high and low numbers, annual active customers, which rose 23% to 6.7 million at the end of the third quarter, will be closely watched.
Jumia is Africa’s # 1 online marketplace and despite its stock skyrocketing, it remains a great way to bet on the growing e-commerce boom in the African market.
3. Ozon: main beneficiary of the growth of e-commerce in Russia
Founded in 1998 as an online bookstore, Moscow-based Ozon (NASDAQ 🙂 was one of Russia’s first e-commerce operators. It is the third largest online retail platform in the country and one of the six most valuable Russian technology companies.
The company’s online marketplace platform offers more than 5 million products in more than 20 product categories, including clothing, groceries, housewares, toys and electronics.
Ozon was also the first Russian online retailer to launch consumer loans for various online purchases, as well as its own branded debit card, which has increased emissions fivefold from 10,000 in 2019 to 260,000 in 2020. .
The e-commerce giant has gone public on the NASDAQ at the end of November at $ 30 per share, which gives it a valuation of $ 6.2 billion. It also enjoyed record sales growth during the COVID-19 pandemic.
OZON stock, which has gained 116% since its public debut, stood at $ 65.09 last night, not far from its all-time high of $ 68.60 on February 9. At current levels, it has a market capitalization of approximately $ 13.3 billion.
With a reasonable price / sales ratio of 11, Ozon offers investors a tremendous opportunity to tap into Russia’s under-penetrated and fragmented e-commerce market.
The annual rate was 93% in 2019 and in the first nine months of 2020 it jumped 70% to $ 876.5 million.
Even more impressive, the gross value of goods (GMV) more than doubled, increasing 142% year-on-year as Russian consumers flocked to its online marketplace.
Active buyers at the end of its last quarter jumped 138% from a year earlier to stand at 11.4 million. Meanwhile, more than 51 million people downloaded the company’s shopping app, which had 41 million monthly active users in the third quarter.