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Will the E-Commerce Boom Continue?

The rise of e-commerce over 2020 was nothing short of gigantic. With the Covid-19 pandemic wreaking havoc across the world, country after country went into lockdown and the stay-at-home culture was formed. This culture shift had a huge impact on the societal trend towards online shopping, and thus e-commerce boomed as the year went on. According to a report from the United Nations Conference on Trade and Development (UNCTD), e-commerce global penetration rose from 16% in 2019 to 19% in 2020. E-commerce sales worldwide increased by 4% over 2020 to total $26.7 trillion, while retail sales declined by 1%. Among the top four companies with the highest levels of Gross Merchandise Value for 2020 were Alibaba and Amazon, taking first and second place respectively. Alibaba, Amazon and Wish are among the strongest e-commerce performers at the moment, so let’s see how they are performing in 2021 after the big e-commerce boom of 2020. 

Amazon remains a powerhouse 

Amazon had a wild year in 2020, and it looks like the company may continue its rocket to the moon for the rest of 2021. The e-commerce goliath’s Q1 results for 2021 were recently released, showing a whopping $108.5 billion in net sales, which is a 44% increase from Q1 of 2020. Amazon’s profits were $8.1 billion in the first quarter, and the company expects to continue surpassing the $100 billion mark in net sales over the next quarter. Thanks to Amazon’s continued innovation, the company has managed to stay relevant and necessary for consumers, and it has even gained ground in the grocery sector with Amazon Fresh stores and online deliveries. The company’s advertising revenue has also increased by a sizeable 73% year-on-year so far. That said, it’s little wonder Amazon is considered one of the top growth stocks at the moment by analysts. Towards the end of April, Amazon was once again trading well over the $3000 mark, hitting $3470.52 on the 30th.

Alibaba hits a speed bump

One of China’s biggest e-commerce platforms, Alibaba share prices hit an all-time high of $319.32 in October 2020. Since then, the company’s share prices have had a wobble, partly as a result of the failed Ant Group IPO, which is Alibaba’s affiliate company. At the end of April 2021, Alibaba’s stock was down about 30% from its all-time high last year. Alibaba has about 1 billion active customers, however the company has entered choppy waters in the markets this year. Reasons include the company’s hefty $18.2 billion fine in China for “behaving like a monopoly” and co-founder Jack Ma’s mysterious disappearance for a few months after the Ant Group’s failed IPO. Investor confidence, as a result, has slumped, which may have contributed to the company’s slow share price decline. Having said that however, Alibaba’s forecasted price earnings number is set at 20.28 and its price-sales is forecasted at 6.38. Also, the Chinese e-commerce giant’s Q3 fiscal 2021 results showed a 37% increase year-on-year to $33.8 billion. So those following the global e-commerce saga ought to keep their eye on Alibaba’s ups and downs to see where share prices could be headed next.

Wish makes bargain shopping popular

Wish parent company ContextLogic had a cracker of a year in 2020 with a 34% year-on-year increase in revenue, to reach $2.5 billion. Wish is used in over 100 countries and now has 550,000 partner merchants on its platform, which was a 435% increase to last year. Wish has focussed on creating an affordable shopping experience for consumers and is looking towards yet another year of growth, as it becomes the number one shopping app in 42 countries around the globe. There is a positive outlook for affordable shopping, thanks to the current economic uncertainty, as well as online purchasing due to the global shift towards e-commerce, which bodes well for companies like Wish. ContextLogic’s share price hit a huge high in February of this year just two months after its December IPO at $24 per share, however prices then dropped 59% by mid-April. Having said that, the company could still be finding its feet in the markets and share prices have been particularly volatile since it went public, so those looking toward CFD stock trading with a regulated broker ought to watch these stocks to see where they will land next. 

CFD stock trading with a regulated broker

What’s next for e-commerce? The sector looks poised for success with the growing global need for online shopping, but will e-commerce still remain popular in the post-lockdown world? And what sort of price volatility could we expect to see going forward? 

This type of volatility may present both opportunities and risks for certain informed traders who engage in CFD stock trading with a regulated broker. CFDs, or Contracts for Difference allow you to take advantage of price changes in both directions—increases as well as decreases—of top e-commerce companies like Alibaba and Amazon, without having to purchase the underlying asset (in this case any actual shares). In other words, trading CFDs allow you to invest in price volatility, so if you expect the price of an instrument (such as shares in Amazon) to go up, you could open a ‘Buy’ deal or ‘Go long’ but if you expect the price to go down, you could open a ‘Sell’ deal or ‘Go short.’ 

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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