Rising consumer spending, combined with the offering of a wide variety of products, efficient delivery services, and personalized shopping experience, should make the e-commerce segment witness good sales this holiday season. Though major companies are fit to benefit from these tailwinds, high input costs, growing supply chain issues, and ongoing market volatility could make overvalued e-commerce stocks Shopify (NYSE:SHOP), Sea Limited (SE), Coupang (CPNG), and Etsy (NASDAQ:ETSY) to witness a significant pullback in the near-term. Thus, it is wise to avoid them now.The e-commerce industry came into the limelight last year, as people resorted to online shopping amid lockdowns and social distancing restrictions. Thus, e-commerce sales amounted to more than $4.28 trillion in 2020. Rapid digitalization also helped small and medium enterprises and merchants to establish a strong e-commerce platform and provide a personalized shopping experience by analyzing consumer tastes. The global e-commerce market is expected to grow at a 29% CAGR to $10.87 trillion by 2025.
However, the gradual uplifting of social distancing measures and solid vaccination drive has allowed brick-and-mortar stores to witness high foot traffic and sales this holiday season. Moreover, inflationary pressures and growing supply chain bottlenecks could make many e-commerce companies lose momentum in the near term.
Given this backdrop, overvalued e-commerce stocks Shopify Inc . (SHOP), Sea Limited (SE), Coupang, Inc. (CPNG), and Etsy, Inc. (ETSY), are best avoided now.