As the retail landscape continues to transform thanks to the internet, there are plenty of intriguing companies changing how people shop. The e-commerce industry has come a very long way in a short period and provided plenty of great opportunities for investors to take advantage of, yet there's still a lot of room for growth. The number of digital shoppers keeps rising with every passing year, evident in the fact that in 2020 over 2 billion people purchased goods or services online.
The global e-commerce market is expected to grow at a CAGR of 22.9% from 2020 to 2027. When you stop to consider how the pandemic has accelerated the widespread adoption of online shopping, that estimate might be on the conservative side. Several companies stand out as great buys for exposure to this secular trend, and investors might want to add shares ahead of the holiday season, as it's typically the most successful time of the year for e-commerce businesses.
Here are three excellent e-commerce stocks to buy now.
1. Amazon
One could easily argue that the entire e-commerce industry wouldn't be where it is today without a company like Amazon (NASDAQ:AMZN). Although the stock has not delivered the type of performance investors have been accustomed to during 2021, there's still plenty of reasons to be optimistic about this big tech giant going forward.
I've mentioned in previous articles how investing in Amazon is essentially like owning several high-growth companies in one, which is undoubtedly appealing. Some examples include how Amazon Web Services offers exposure to the cloud, Amazon Prime Video provides exposure to a robust streaming platform, and the Amazon e-commerce platform and logistics business are simply unparalleled in terms of scale.
While the company disappointed analysts with its most recent earnings release, investors should consider adding shares, given how the upcoming quarter will reflect Black Friday sales. Tailwinds for online shopping and cloud computing are not going away anytime soon, and the company will continue to prosper thanks to these long-term trends.
It's worth noting that Goldman Sachs recently named Amazon as their top 2022 internet stock pick, which is undoubtedly a strong vote of confidence.
2. Shopify
Shopify (NYSE:SHOP) is another company that has played a significant role in the development of the e-commerce industry, as its cloud-based, multi-channel commerce platform has provided entrepreneurs with a way to sell their products online without the help of Amazon.
Shopify's software provides small and medium-sized businesses with a way to run their business across various sales channels, such as Web and mobile storefronts, physical retail locations, social media storefronts, and more. Thanks to its simplicity and wide assortment of features, it's very appealing to entrepreneurs, making selling online a breeze.
This is a growth stock trading at a lofty valuation. However, the company continues to deliver impressive earnings results that help justify its share price quarter after quarter. Most recently, Shopify reported Q3 revenue of $1.1 billion, up 46% year-over-year, and saw its gross merchandise volume reach $41.8 billion, up 35% year-over-year.
The stock is trading at new all-time highs after consolidating for about six months, which means an explosive rally could be on the horizon for this disruptive e-commerce company.
3. Nike
If you're interested in owning one of the strongest athletic apparel retailers in the world, Nike (NYSE:NKE) should be on your shopping list. The company has gotten its e-commerce strategy down, and Nike's digital sales have been soaring as a result. Nike reported that its Nike brand digital sales increased by 64% year-over-year in fiscal 2021, with all geographies showing strong double-digit growth. It's great to see that the trend is still intact in FY 22, as Nike brand digital sales jumped by 25% in Q1.
The company's long-term strategy includes reducing the number of retail partners that offer its products and expanding its direct-to-consumer channels, which has been a genius move given how many brick-and-mortar retailers have been hurting during the pandemic.
There's also a lot to like about the company's potential in international markets like China and Latin America, significantly as more people gain access to the internet. The bottom line is that Nike has dominated the athletic apparel and footwear markets over the years, and it's hard to imagine that changing anytime soon given the strength of the company's brand and a focus on investing big in e-commerce.