3 Top E-Commerce Growth Stocks to Buy Now
TradingKey - The e-commerce sector continues to be a hotbed of innovation and growth, offering investors opportunities to tap into transformative companies with long-term potential.
When we think about e-commerce stocks to buy, we want to have some common characteristics; an already-large user base, huge total addressable market (TAM), preferably a built-in/integrated payments system, and the position of market leader in its niche.
The last one is particularly important as buying the market leader tends to mean a company has established a competitive moat – that has separated it from the rest of the pack – for a reason.
With all that in mind, here are three e-commerce businesses that are redefining commerce in their respective markets through their innovative strategies and significant growth potential. For investors, here are three e-commerce growth stocks that are worth a closer look for investors and why they’re worth buying now.
- Shopify: Empowering entrepreneurs globally
Shopify Inc (NYSE: SHOP) is synonymous with e-commerce entrepreneurship. It enables merchants of all sizes to create, manage, and scale their online stores through its comprehensive platform. As of the third quarter of 2024, Shopify boasts over 2 million active merchants, a testament to its global reach and relevance.
Shopify’s value proposition lies in its ability to help businesses thrive in the digital economy. From customisable storefronts to integrated payment solutions via Shopify Payments, the platform simplifies the complex process of running an online business.
It also offers tools like Shopify Capital, providing merchants with working capital, and Shopify Fulfillment that connect merchants to third-party fulfillment partners to ensure seamless delivery experiences.
Key Shopify Q3 2024 growth metrics
Source: Shopify’s Q3 earnings presentation
Shopify’s partnerships with global giants like Amazon and Meta Platforms enhance its reach, while its subscription-based revenue model ensures recurring income. In Q3 2024, revenue grew 26% year-on-year to US$2.16 billion, marking its sixth consecutive quarter of over 25% revenue growth (excluding logistics).
Meanwhile, Gross Merchandise Volume (GMV) rose 24% to US$69.7 billion, reflecting strong merchant activity. Additionally, the implementation of artificial intelligence (AI) features, such as the AI assistant Sidekick, has improved merchant tools, contributing to increased adoption, higher conversion rates and better customer satisfaction.
- MercadoLibre: Dominating Latin America’s e-commerce
MercadoLibre Inc (NASDAQ: MELI) is the largest e-commerce and fintech platform in Latin America, operating in 18 countries across the region. The company is a dominant force in Latin America, seamlessly integrating e-commerce, payments, and logistics.
It caters to a vast and underserved market, providing not just an online shopping platform but also critical financial services through its fintech arm, Mercado Pago. The company has created a powerful and virtuous ecosystem that supports both buyers and sellers, driving consistent growth across the region.
Key MercadoLibre Q3 2024 growth metrics
Source: MercadoLibre’s Q3 2024’s earnings presentation
MercadoLibre’s fintech offerings, including digital payments and credit solutions, are rapidly expanding. In Q3 2024, its total payment volume reached US$50.7 billion, driven by strong adoption in Brazil, Mexico, and Argentina.
The addition of six new fulfillment centers in Brazil and Mexico highlights the company’s commitment to improving logistics and delivery efficiency. Furthermore, the company’s credit portfolio expanded by 77% year-on-year to US$6 billion, marking its fastest growth since early 2022. With a dual focus on e-commerce and financial services, both of which complement the other, MercadoLibre continues to capture market share and drive long-term growth.
- Sea Ltd: Southeast Asia’s e-commerce juggernaut
Sea Ltd (NYSE: SE) is a powerhouse name in Southeast Asia, combining e-commerce, gaming, and digital payments to address the region’s growing digital economy.
Sea Ltd has become a leader in Southeast Asia’s rapidly expanding e-commerce market through its Shopee platform. Known for its mobile-first strategy and localised approach, Shopee has captured the hearts of consumers in key markets like Indonesia, Malaysia, and Thailand.
Beyond e-commerce, Sea Ltd also excels in digital payments through its SeaMoney division, which is transforming financial inclusion in the region.
Key Sea Ltd Q3 2024 growth metrics
Source: Sea Ltd’s Q3 earnings presentation
Shopee’s dominance in Southeast Asia stems from its ability to tailor offerings to local markets while leveraging mobile technology to engage a tech-savvy population. In Q3 2024, Shopee's e-commerce revenue surged 42.6% year-on-year to US$3.2 billion, with gross orders increasing by 24.2% to 2.8 billion.
SeaMoney, its digital payments arm, complemented this growth with a 38% rise in revenue, reaching US$615.7 million. Strategically, Sea has focused on streamlining operations and concentrating on profitable markets, leading to a net income of US$153.3 million for Q3 2024, a significant turnaround from a net loss of US$144 million in the same quarter the previous year.
With increasing internet penetration and accelerating e-commerce adoption in the region, Sea is well-positioned to capitalise on these continued trends.
Why these stocks are worth buying now
Shopify, MercadoLibre, and Sea all represent the best of what the e-commerce sector has to offer. Each company has established itself as a market leader with distinct competitive advantages and strong growth potential.
Shopify empowers entrepreneurs globally with its robust platform and AI-driven tools. MercadoLibre continues to dominate Latin America with its unique combination of e-commerce and fintech. Meanwhile, Sea leverages its expertise in Southeast Asia to tap into a rapidly digitising economy in the fast-growing ASEAN region.
For investors seeking exposure to high-growth markets, these stocks provide a rare mix of innovation, leadership, and a unique long-term opportunity to compound your wealth.
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