December 2, 2020
For years now, businesses and consumers have turned to e-commerce retailers to find the products, services, and equipment they require. The current pandemic has further accelerated the transition from in-store to online purchases as consumers look to fulfill their holiday shopping lists safely. Illustrating this, traffic at brick-and-mortar stores on Black Friday fell by 52.1% compared with last year, according to preliminary data from Sensormatic Solutions, a leading global retail solutions provider. By comparison, online spending on that same day surged 21.6% to $9 billion – a new record.
While Amazon.com (Tii:AMZN) may be the most widely-known e-commerce marketplace and Walmart Inc. (Tii:WMT) is the poster child for an old-school brick-and-mortar successfully incorporating an e-commerce platform into its business model, let’s take a look at some e-commerce pure-plays benefiting from the consumer shift to online shopping.
Alphabet Inc. (Tii:GOOG)
The company behind the world’s most widely-used search engine, Alphabet’s portfolio includes the Google Shopping e-commerce platform. Google shopping allows consumers to compare brands, products, and prices to find the best deals. Products featured on the site include electronics, cookware, appliances, video games, clothing, furniture, and many others. While it calls itself an e-commerce marketplace, it functions more as a comparison shopping engine (CSE) that allows retail companies to post their ads to the website. Pinning down how much Google Shopping has made in revenue is difficult, as Alphabet does not break that out separately in their annual reports. Google properties as a whole contributed $160.7 billion to Alphabet Inc.’s 2019 revenues.
Wayfair Inc. (Tii:W)
An online furniture and home goods company, Wayfair has more than 11,000 global companies offering decor, lighting, bedding, rugs, cookware, and furniture on its site. Also, the company also offers rolling deals to consumers. Last year alone, the company generated $9.1 billion in direct retail revenue. Presently, Wayfair offers 60% off pet furniture for the holiday season. So, you can find a range of dog beds to cat trees for your special pet family members. With the holiday sales season rolling in to help generate revenue and raise stock prices, you can find something for everyone on your wish list.
eBay Inc. (Tii:EBAY)
Unlike other platforms that may strictly allow consumers to connect with companies to purchase products, eBay allows consumers to sell to other consumers – from collectibles and memorabilia to used cars and travel packages. One of the original innovators in the e-commerce space, eBay has benefited from consumers visiting malls less and online sites more. For its fiscal third quarter of 2020, the company reported better-than-expected revenues of $2.6 billion, a 25% increase as gross merchandise volume (GMV) rose 22%. Adjusting to the challenges of 2020, eBay opened an "Authentication Station" in Los Angeles that allows consumers to have their items evaluated and inspected before being sold without a person having to leave their car.
JD.com, Inc. (Tii:JD)
With one of its best revenue quarters ever in the books and plans to spin-off its health unit and list it on the Hong Kong stock exchange, Beijing-based JD.com is a global Fortune 500 B2C marketplace platform that reported 2019 revenues of 576.9 billion Renminbi ($82.9 billion) in 2019. Boasting the largest drone delivery system, infrastructure, and capability globally and 441 million annual active customers (90% of whom make purchases via mobile devices), the company offers a diverse selection of products that include electronics, apparel, cosmetics, and even fresh food.
Alibaba Group Holding Limited (Tii:BABA)
With the Chinese equivalent of $72 billion in fiscal 2020 revenues, this multinational e-commerce, retail, Internet, and technology company is the world's largest e-commerce platform. If that wasn’t enough, it was also rated as the fifth-largest artificial intelligence company. Alibaba also hosts the largest B2B, C2C, and B2C marketplaces in the world. Its B2C platform features the Taobao Mall (TMall) online store that offers a range of products to its 500 million monthly active users.
Rakuten, Inc. (Tii:RKUNY)
While some may not be familiar with Rakuten, Inc., this Japanese company has a large global outreach for its e-commerce products. Known as Rakuten Ichibi in Japan, Club Rakuten in the United Kingdom, and simply Rakuten in France and the United States, this company has a wide range of businesses in its portfolio that includes Internet Services, FinTech, and Mobile. Its e-commerce platform allows shoppers to find deals to their favorite stores and in turn, receives a commission for directing customers their way. That commission is then offered to consumers as a cash-back reward. For 2019, Rakuten generated revenue of just over $11.62 billion U.S.
While it’s unknown whether consumers will continue to shop online at current levels once the pandemic has passed, one can safely assume that e-commerce isn’t going away any time soon. And platforms such as these are certainly at the right cyberspace at the right time.