Over the past few years, we’ve seen a dramatic shift in the way consumers shop.
Many people now rely on the internet to buy their favorite products.
Online shopping is not only convenient, but it also gives consumers a broader range of items to choose from.
The COVID-19 pandemic has caused the eCommerce space to boom, as many consumers preferred to shop online for safety reasons.
Even as the pandemic comes to an end, there’s still high demand for eCommerce.
We’ve rounded up the best eCommerce stocks to buy today so that you can benefit from growth in this sector.
Best e-Commerce Stocks To Buy
Amazon.com Inc. (NASDAQ: AMZN)
Amazon is the company that fundamentally changed the e-Commerce market.
Initially focused on selling books, Amazon has its eyes set on rendering brick and mortar establishments obsolete.
Through Amazon, consumers have access to an unparalleled marketplace of products and services.
No matter what you’re looking for, there’s a good chance you can find it on Amazon.
Consumers have relied heavily on Amazon during the pandemic to get their essentials, and the company’s online sales only continue to grow.
Their revenue and earnings numbers have been growing steadily, even though the company slightly missed their second-quarter numbers.
Amazon currently has one of the highest share prices on the market, so it’s not going to be suitable for every investor.
This online retail giant has proven that they aren’t going anywhere anytime soon, so it may be an excellent long-term portfolio pick for those who can stomach the high price point.
Buyers may want to wait for a price dip before adding this stock to their portfolio to really maximize returns.
eBay Inc. (NASDAQ: EBAY)
As another one of the largest eCommerce platforms in the U.S., eBay facilitates online sales between consumers and businesses.
The company has played an important part in allowing consumer-to-consumer transactions to continue throughout the pandemic and beyond.
eBay gives consumers the option to buy, purchase, and bid on new and used goods.
You can find anything you need on eBay. Whether it’s a new Bluetooth motorcycle helmet or a gaming mouse, eBay has it.
Its P2P model is very different from Amazon and other more traditional retailers.
Since they offer peer-to-peer transactions, they don’t have to worry about supply chain issues as much as other retailers.
eBay stock has seen consistent growth throughout this year. However, they still have a relatively low P/E ratio, meaning they could be slightly undervalued.
The company has also announced that it will be buying back $5 billion in shares this year, which could help keep its stock price stable.
This is an attractive e-Commerce pick to watch moving forward.
Etsy Inc. (NASDAQ: ETSY)
Etsy is another peer-to-peer eCommerce company that has done very well over the past year. Etsy allows members to set up their own ‘shops’ to sell handmade and vintage items.
Part of Etsy’s appeal is its selection of unique items that consumers can’t find anywhere else.
Like eBay, Etsy doesn’t have to worry about supply chain issues.
They also have a very loyal customer base – in 2018, 60 percent of their sales were from repeat buyers.
Etsy has made a few notable acquisitions this year, which shows that they are invested in continued growth for their business.
The most notable of these is Depop, a clothing resale app.
Etsy’s focus on handmade and vintage items sets them apart from other big names in e-Commerce.
This stock has delivered excellent returns over the last year, which appears to be just the beginning.
Chewy Inc. (NYSE: CHWY)
Chewy is a popular e-Commerce retailer that specializes in pet products.
They offer products from thousands of different pet brands and also provide recurring subscriptions for pet essentials.
Although Chewy’s stock took a dip in March, they are regaining ground and still see a 57% share increase from last year.
The company is seeing impressive revenue gains year over year.
Chewy became profitable for the first time at the end of 2020.
They did experience losses in the first half of 2021, but analysts expect the company to finally break even soon.
Chewy has carved a unique niche for itself in the e-Commerce market and appears to have substantial long-term growth prospects.
These factors make Chewy an exciting investment opportunity.
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e-Commerce Stocks: Retailers
Walmart Inc. (NYSE: WMT)
With sales of nearly $520 billion in 2020, Walmart is the largest American retail corporation.
The coronavirus pandemic completely changed the brick-and-mortar sales narrative as consumers switched to online purchases for safety reasons.
While many other retail giants struggled during the pandemic, Walmart was able to transition to e-Commerce fairly easily.
They also offered services like curbside pickup to keep consumers coming back.
While this stock has dropped off a bit in March, it has since recovered well and is on an upward trajectory now.
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Walmart is often considered a good recession-proof stock because of its focus on essential items.
They also offer a 1.49 percent dividend yield, which is certainly enticing to income investors.
Target Corporation (NYSE: TGT)
Target is the 10th largest retail chain in the U.S.
While they’re known primarily for their brick-and-mortar stores, they have been expanding their e-Commerce efforts over the past few years.
They now offer a robust online shopping experience. Customers can opt for delivery or pick up their items at a local Target location.
Target stands out from its competitors due to the quality of its items.
They offer a variety of high-quality and sustainable products at a relatively affordable price.
The company also consistently updates its business model to provide a better experience for customers.
For example, they have been opening small-format stores in urban locations for better accessibility.
Target stock has been on a steady upward trajectory, delivering very strong returns for investors over the past year.
In addition to this sustained growth, this stock also provides a 1.45 percent dividend yield.
Overall, Target has proven itself to be a reliable portfolio addition.
e-Commerce Stocks: Software
Shopify Inc. (NYSE: SHOP)
Shopify is a Canadian-based platform that makes it easy for small businesses to sell online.
This platform offers a wide variety of e-Commerce tools and integrations.
These include product listings, payment processing, email marketing, and more.
Shopify stock continues to be very expensive, and there’s some indication it could be overvalued.
However, you shouldn’t necessarily write this stock off because of its high price tag.
Shopify shares are steadily climbing, with a 43% increase in share price over the last year.
The company saw strong revenue and user growth in the second quarter of this year despite relaxed pandemic restrictions in the U.S.
Many analysts expect this growth to continue.
e-Commerce Payment Stocks
Paypal Holdings Inc. (NASDAQ: PYPL)
Paypal is an online payment processing service that allows users to send and receive money.
Paypal has become a popular payment option for online businesses of all sizes.
Many consumers like it because it allows you to pay online without giving individual businesses your credit card information.
In addition to their own namesake services, PayPal also owns Venmo, a popular peer-to-peer payment app.
They’ve also recently launched Zettle, which is a point-of-sale system for small businesses.
This stock has been on a steady upward trajectory this year, but that’s not much of a surprise given the company’s finances.
They’ve seen steady revenue and earnings growth over the past five years.
PayPal is currently the world’s leading online payment processing system.
Given their recent successes, this seems unlikely to change anytime soon.
Square, Inc. (NYSE: S.Q.)
Square is a financial service and mobile payment platform.
The platform is run by the founders of Twitter and is based in San Francisco.
Paypal and Square are often considered to be direct competitors, but they actually offer different services.
Square offers a full suite of business management tools, including a very popular point of sale system for brick-and-mortar businesses.
The company does offer some e-Commerce tools as well.
Square owns the Cash App, a popular peer-to-peer payment system with some e-Commerce features.
Square’s transaction revenue was up in the second quarter of 2021 and is expected to continue to do well for the rest of the year.
In addition, Bitcoin sales have further boosted the company’s revenue.
The company is looking into more acquisitions in the near future to extend its footprint further.
So far this year, Square has delivered huge returns.
They are one of the top e-Commerce and fintech stocks to keep an eye on this year.
Best Chinese eCommerce Stocks
Alibaba Group Holding Limited (NYSE: BABA)
Often coined the “Amazon of the East,” Alibaba is an e-Commerce company based out of China.
BABA stock has been discussed heavily in the media this year.
After peaking in all the way back in October, the company’s stock has been on a downward trajectory.
Much of this is due to Chinese regulatory boards investigating the business.
Co-founder Jack Ma’s disappearance from the public eye in late 2020 has played a role as well.
However, Alibaba’s businesses continue to generate huge revenue numbers and are a crucial part of the Chinese economy.
This is definitely one of the riskier e-Commerce stocks on the market right now, so it will not be the right choice for every investor.
However, Alibaba has a huge Chinese market share, and it’s very possible they could bounce back from these setbacks.
This may be a great time to invest when shares are down.
JD.Com, Inc. (NASDAQ: JD)
As another e-Commerce company, JD.com is based out of Beijing, China. JD.com is Alibaba’s biggest competitor.
That being said, J.D. controls just 17% of the market share in China.
Alibaba holds as much as 59% of the market.
Walmart currently owns 12% of the company and is evidently placing bets on the Chinese e-Commerce market.
This stock peaked in February but has dropped off since then.
It’s only in August that the company shows a hint of upward momentum.
JD.com’s financials have been strong, and their price-to-earnings ratio is low, meaning it’s likely undervalued.
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Should You Invest In e-Commerce Stocks?
Now is a great time to buy into e-Commerce stocks.
Consumers have gotten used to the convenience of being able to buy their favorite products online.
This is something that’s unlikely to change, even as the pandemic comes to an end.
In the future, delivery services may be considered essential, as opposed to a helpful convenience.
For many small businesses, it’s easier and more affordable to sell their products online instead of having to build a brick-and-mortar store.
Investing in the companies that are offering e-Commerce services now is a great way to get in on this trend.
Best e-Commerce Stocks: Final Thoughts
Some of the world’s largest companies right now are e-Commerce companies.
These stocks have been incredibly successful this year as a result of the high demand for their services.
These stocks likely won’t slow down anytime soon.
Now is a great time to invest in e-Commerce stocks and take advantage of these changing consumer behaviors.
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