3 E-Commerce Stocks, Many stocks in e-commerce struggled during the last year when investors worried about the slowing of growth in the post-pandemic world. The effects of rising inflation in consumer consumption have made these stocks even more unattractive as rising interest rates added to the tension by pushing investors towards more cautious quality stocks.
However, as people continue to buy more items online and more products are sold online, the global e-commerce market will likely grow at a compound annual pace of around 27 percent between 2022-2027, as per Infiniti Research. It’s an excellent idea to block out the noise in the near term and purchase a few of the top online-based stocks to invest in in the long run. Three solid online-shopping stocks that fit the criteria: Amazon (NASDAQ AMZN), Etsy (NASDAQ ETSY), and Pinduoduo(NASDAQ PDD).
Amazon’s stock price was cut in half by 2022 when the expansion of its e-commerce and cloud-based businesses slowed. The company’s e-commerce operations initially took a lot of work to compare to its surge in growth during the outbreak. The slowdown was further aggravated by disruptions to supply chains (especially for its third-party vendors located in Asia) and headwinds of inflation.
Cloud services were growing quickly during the epidemic as more people used internet-based services; they also cooled off after rising rates of interest and macroeconomic factors prompted large-scale enterprise customers to limit the amount they spend.
Since Amazon’s core business lost its enthusiasm, it increased spending on the latest Prime features and new media content. This is why experts predict that the company’s revenue will increase by 9% in 2022, as it reports an operating loss.
The slower growth and rising costs caused a stir among the bulls, but investors shouldn’t ignore Amazon’s strengths. Amazon still has over 200 million Prime customers and continues to expand offline through Whole Foods, Amazon Go, and other brick-and-mortar stores.
The Prime ecosystem is continuing to grow with new streaming music, videos, and video games, and Amazon Web Services will likely remain the world’s most popular cloud infrastructure platform shortly. These strengths indicate that Amazon will bounce back from the downturn in its cycle, and its stock will likely reach new heights.
Etsy’s stocks also took a serious decline, dropping around 43% by 2022 since the marketplace for artisans had to contend with the same issues post-pandemic that plagued Amazon. However, the Etsy slowdown has been further complicated because of several difficult comparisons to the unusually high sales of masks made by hand during the pandemic and also the inorganic gains due to the acquisition of musical instruments marketplace Reverb as well as the fashion resale marketplace Depop as well as Brazilian hand-crafted marketplace Elo7.
The analysts predict that Etsy’s revenues will increase by 8% by 2022 even as it earns an operating loss. The integration with Reverb, Depop, and Elo7 could reduce its short-term margins. However, these marketplaces may also increase their potential as an alternative to Amazon.
Etsy is facing a variety of near-term obstacles, but it continues to expand even when Amazon and other online retailers launch similar marketplaces. It was home to 94.1 million buyers active in the third quarter of 2022 and 7.4 million registered sellers during the 3rd quarter of 2022. This is compared to the number of active customers to 24 in the first quarter of 2022 and 1.6 million sellers at the close of 2015. It created a viable niche by leveraging its first-mover advantage and lower cost of selling and is likely to expand as more consumers look for exclusive products.
The stock of Pinduoduo, the third largest E-commerce firm in China following Alibaba and JD.com, soared 45 percent in 2022. Pinduoduo was growing faster than its major competitors due to the rapid growth of its agriculture business, which brings fresh fruits and vegetables directly from farmers to consumers. The primary discount market, which encourages customers to join to purchase bulk items, also prospered even amid a slowdown in the Chinese economy slows down.
Pinduoduo was in financial trouble for several years before the decision to end its low-margin marketplace for first-party sellers and swiftly cut back on its expenditure. The cost-cutting initiatives allowed Pinduoduo to make a full-year net income in 2021.
Although Pinduoduo offered a staggering 882 million customers as of the beginning of 2022, it mostly was not subject to oversight by China’s regulators for antitrust, who have imposed sanctions and fines in the case of Alibaba in 2021. In the end, Pinduoduo probably gained from the decision of the government to prohibit Alibaba’s e-commerce department from negotiating exclusive agreements with merchants, utilizing aggressive promotional strategies that result in losses, and making major acquisitions. Analysts predict that Pinduoduo’s revenue and earnings will grow by 45% and 174% in 2022 and 2023, respectively.
Pinduoduo isn’t operating an infrastructure cloud or streaming video platform or any other media business that isn’t profitable similar to Alibaba. This relative simplicity creates Pinduoduo with an attractive and simple strategy to capitalize on China’s expanding electronic commerce industry, which will increase in 2023 when China finally removes its zero-COVID policy.
Economic weakness is expected to impact the oil price in 2023.
(Reuters) Oil prices are poised for modest increases in 2023, as a dreary global economic landscape and COVID-19-related flare-ups that have erupted in China could impede growth in demand and counteract the effects of the supply shortages due to sanctions against Russia as the results of a Reuters poll on Friday showed.
An analysis of the opinions of thirty analysts and economists predicted that Brent crude to average $89.37 per barrel in 2023. This is 4.6 percent less than the $93.65 consensus of a November survey. The benchmark for the world has been $99 for a barrel in 2022.
U.S. crude is projected to be at an average of $84.84 per barrel by 2023, up from the previous month’s $87.80 average.
“We believe that the world will slide into a recession by the beginning of 2023, as the consequences of rising inflation and high rates of interest are felt,” said Bradley Saunders, the associate economist for Capital Economics.
Brent has fallen by more than 15 percent since the beginning of November and was trading in the region of $84 per barrel on Friday after the high COVID-19 case volumes in China decreased the outlook for growth in demand for oil in the world’s top crude importer. [O/R]
“The oil market remains robust despite a declining global demand forecast as the fears of recession abound,” said Edward Moya, an analyst in the senior division of OANDA and announcing that China will be the main priority at the beginning of next year.
Many analysts predicted that oil demand would increase significantly in 2023’s 2nd half. It will be due to the ease of COVID-19 limits in China and central banks adopting a more aggressive approach to interest rates.
The poll revealed that the effect on Russian oil from Western sanctions against Russian oil production is likely to be minimal.
“We are not expecting an effect from the price cap designed to provide the ability to bargain with buyers from third countries,” analysts at Goldman Sachs wrote in a note.
This week, Moscow signed a law prohibiting the supply of oil and products made of oil to the countries participating in the Group of Seven (G7) price cap starting in February. 1 for five months.
“In the case of a drastic decline in Russian exports (which we do not anticipate to happen), OPEC+ will likely be prepared to boost output to keep the prices from getting too high,” data and analytics firm Kpler claimed.
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