5 Reasons to Invest in Ecommerce Stocks

Author: James Clark

All signs on green for Ecommerce in stock trading

Stock traders love investing in innovative and futuristic technology that potentially offers explosive returns. This includes artificial intelligence, blockchain, self-driving cars, and space flight, etc. In 2020, COVID-19 put the business world on hold for months by restricting foot traffic. As a result, businesses took their operations to the internet by embracing eCommerce technology.

Since then, the digital sales industry has gained more momentum with optimized delivery services, superior customer service, and elevated market penetration. With the industry booming, eCommerce stocks are making some serious noise in the stock market and attracting more investors.

Why You Should Invest in Ecommerce Stocks?

Here are 5 reasons to invest in Ecommerce stocks in 2021:

1. A Long-Term Growth Opportunity

The Ecommerce industry generates trillions of dollars in revenue every year in the US alone, so you can imagine its potential in the global markets. With more people shopping from home during the pandemic, it’s hard to see consumers go back to brick-and-mortar chains like they used to. Lockdowns and fear of the virus have accelerated the desire for convenience, and this trend is rapidly becoming the new normal.

2. Several Industries Embracing the eCommerce Route

Even if there was no pandemic, the eCommerce industry was bringing about a tectonic change in customer preference. Many brick-and-mortar stores declined in sales while those who were smart enough to digitally transform took advantage. As a result, eCommerce stocks grew in value and became more liquid over time.
Giants like Amazon and Ali Baba are starting to face competition from other rising eCommerce businesses like Walmart and Target. Furthermore, payment companies like PayPal are adapting their services to make transactions easier for consumers.

3. More Winners than Losers

One thing that remains paramount about the stock market is that emerging technologies like Artificial intelligence, cryptocurrencies, and now, Ecommerce. Many eCommerce stocks are still not profitable thanks to the 800-pound gorilla Amazon playing king. As a result, there will be losers in the game.

Still, the pandemic increased the stocks of companies like Wayfair, Etsy, and GrubHub, indicating there will be more winners than losers in the future. Plus, there’s more to an eCommerce platform than selling groceries, gadgets, electronics, and food. Did you know that Netflix and Uber are both Ecommerce platforms?

4. Ecommerce is an Improving Technology

Perhaps the most important reason to invest in Ecommerce stocks is that it gets better as technology improves. The Ecommerce industry has optimized business-consumer connectivity and adopted other trending technologies like Big Data, Blockchain, and AI.

5. Artificial Intelligence

Ecommerce stocks climbed a mountain following the infusion of artificial intelligence into the industry to simplify the purchase journey and enhance the experience. For example, AI-based tech gadgets like Amazon Echo and Google Home can assist customers in doing online shopping. AI-based Chatbots are also becoming increasingly popular since the pandemic to offer round-the-clock customer service and assist customers with their queries regarding products and services.

Bottom Line

The bottom line is simple. Ecommerce stocks will continue to rise following the success of giants like Amazon and Netflix. However, if you’re a conservative trader, you should know that they are still volatile and will be for some time. Nonetheless, there are stocks in the market that are screaming buys. If you’re looking to diversify your portfolio, the eCommerce industry is where you need to head.

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