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These 3 E-Commerce Stocks Could Be The Next Amazon

July 29
10:55 2021

Amazon brought e-commerce to the U.S. consumer, and its all-time returns exceeding 187,000% make it one of most successful stocks ever. Investors may struggle to find another Amazon, but these three international e-commerce stocks all offer potential upside worth considering.

1. Southeast Asia

Sea Limited (NYSE:SE) is an internet company that operates in Southeast Asia. Its business is made of three primary segments: Shopee (e-commerce), Garena (gaming), and Sea Money (payments).

Sea Limited’s Shopee business is the most popular e-commerce website in Southeast Asia by a wide margin, with more than twice the traffic of second-place Lazada, owned by Alibaba Group Holding. Sea’s first-quarter 2021 revenue grew 147% year over year to $1.76 billion and is expected to generate full-year revenue of $8.3 billion in 2021.

Sea’s digital entertainment business, Garena, is behind the most popular battle royale game in the world, Free Fire. This is Sea Limited’s most profitable business, with 64.4% EBITDA margins that help lift the company’s overall profitability. Sea Limited is heavily investing in growing its business, so it shows a net loss, but in Q1 2021, Sea Limited posted $88 million in EBITDA, implying the underlying business is profitable.

The e-commerce market in Southeast Asia is estimated to grow to $300 billion by 2025 and currently has just a 5% penetration rate among the region’s 650 million residents. If Sea Limited can continue to hold its leading market position, there is still a lot of growth to be had over the long term.

2. Latin America

MercadoLibre (NASDAQ:MELI) is an e-commerce company in Latin America. Its business covers the entire retail transaction process, including Marketplace (e-commerce), Mercado Pago (payments), and Mercado Envios (shipping).

MercadoLibre’s marketplace is the de facto leading e-commerce website in Latin America, where it’s been operating for more than 20 years. MercadoLibre grew revenue 158% year over year to $1.37 billion in the first quarter of 2021 and is expected to hit $6.29 billion for the full year.

Continue Reading at The Motley Fool

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