Amazon recently reported blow-out earnings which saw the e-commerce giant reach a $1 trillion market cap (again), but who are its main competitors?
It’s one of the most recognizable companies in the world, it has a long-serving founder-CEO who keeps driving the brand to greater heights, and its fulfillment centers are known for speed and efficiency.
Amazon (NASDAQ: AMZN) controls roughly half of the e-commerce market in the U.S., but it is starting to paint a target on its back as smaller, eager competitors look to knock it off its perch.
It is estimated that Alibaba (NYSE: BABA) currently controls roughly 80% of all online retail sales in China, which itself is the third-largest consumer market on the planet. No mean feat for a company that must compete with the behemoth that is Amazon.
Going public in 2014, the company’s share price has grown more than 270% over the past 5 years in comparison to Amazon’s more than 400% in the same period. As well as this, Alibaba has returned 28% over the past 12 months, compared to Amazon’s 23%. The company’s revenue grew by 144% from 2017 to 2019, up to $56 billion in that period. This is expected to increase by a further 78% to almost $100 billion by 2021. In 2019 alone, BABA’s core e-commerce model drew in a record $5.4 billion, up 29% on the year before.
With investments in more than 160 businesses, Alibaba is diversifying well, and nowhere better than its cloud segment. In its last earnings call in November it announced cloud growth of 64% compared to Amazon Web Services 35% increase. Alibaba is already the Amazon of China and is branching out internationally.
MercadoLibre (NASDAQ: MELI) was one of the top e-commerce stocks last year, rising more than 90% in 2019 alone. Often considered the ‘Amazon of Latin America’, the e-commerce firm is the largest e-commerce platform in the region, selling 98 million items in its last quarter worth $3.6 billion — up more than 17% year on year.
Not ready to rest on its laurels, MercadoLibre has begun expanding its fintech arm, MercadoPago, as a direct competitor to PayPal (NASDAQ: PYPL). Besides this and e-commerce, it has four other segments: logistics solutions, SaaS through Mercado Shops, credit, and advertisements.
Latin America’s e-commerce market is estimated to more than double in value from $101 billion to $210 billion by 2022 as more people are getting online. With home-court advantage, MercadoLibre could keep Amazon at bay as it corners this emerging market, even if it is not much of a threat to Amazon in other markets right now.
There isn’t a better success story on Wall Street right now than Shopify (NYSE: SHOP). To put it into context: if you had invested $10,000 in Shopify on upon its IPO, its 2,750% gains would leave you with more than $285,000 today. That’s a lot of cheddar!
The Canadian e-commerce platform was already successful when it went public in 2015, but its successive growth has been astonishing. It is up more than 170% in the past year alone, with its stock at an all-time high and is showing no signs of slowing down. Monthly recurring revenue grew 39% in its last earnings call, while gross merchandising value grew from $28 billion to $40 billion for the last three quarters.
E-commerce as a whole is becoming the dominant force in retail, making up 11% of all retail sales, up from 4% a decade ago. With that in mind, Shopify’s addressable market opportunity could well reach $100 billion or more as the market continues to grow.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in Amazon, MercadoLibre, and Shopify. Read our full disclosure policy here.