E-commerce sales will soar to $6.5 trillion by 2023, according to Statista. It's an enormous global market, one which will help many investors will earn a fortune in the coming years.
To help you do the same, here are three great e-commerce stocks that are poised to deliver handsome gains to their shareholders in 2021 and beyond.
1. Pinterest
Pinterest (PINS -0.55%) bills itself as a "visual discovery engine." Essentially, it's a social media platform that people use to search for images related to their passions and interests. It's intended to be aspirational, and as Pinterest puts it, help its users "go from inspiration to reality."
The online retail market is booming. Here's where to invest your money. Image source: Getty Images.
To enable them to do so, Pinterest uses advanced artificial intelligence technology to serve up recommendations, some of which are advertisements. Pinterest's focus on visual discovery lends itself well to digital ads. And as its users search for ways to better their lives or pursue their passions, they're primed to take action -- and make online purchases.
Put it all together, and it's a powerful formula for growth as an e-commerce entity. Pinterest added more than 100 million users over the past year. Its revenue, in turn, surged 58% year over year to $443 million, while its adjusted net income rose nearly 15-fold to $87 million.
Pinterest's shares are up roughly 170% since its initial public offering (IPO) in April 2019. And with its impressive growth poised to continue in 2021, investors can expect more gains in the year ahead.
2. PayPal
While Pinterest helps online marketers reach potential customers, PayPal (PYPL 0.34%) makes it easier for them to complete their sales transactions. The digital payments leader is a key enabler of the global e-commerce industry, and it's set to grow briskly alongside this booming market.
PayPal makes online purchases faster and more secure. People can use its One Touch service to buy items on their mobile devices with just a few clicks, bypassing the need to enter their billing information. By speeding up the checkout process, PayPal's tools also help to improve online merchants' conversion rates, boosting their sales and profits in the process.
PayPal's strong growth has helped it become a financial titan. Its revenue rose 25% year over year to $5.5 billion in the third quarter. Adjusted operating income, meanwhile, soared 45% to $1.5 billion. This impressive profitability has allowed the company to amass more than $8 billion in net cash on its fortress-like balance sheet.
In 2021, PayPal plans to give its more than 360 million customers the opportunity to fund their accounts with bitcoin and other cryptocurrencies, which they'll then be able to use to make purchases at over 26 million online sites worldwide. The company will immediately convert the cryptocurrency to fiat currency, such as U.S. dollars, thereby eliminating any exchange risk for its merchants. This is just one more way PayPal will help to fuel the growth of the e-commerce industry in 2021 and beyond, as well as its own growth -- and shareholders' profits -- in the process.
3. JD.com
China is the biggest e-commerce market in the world, and JD.com (JD 2.21%) is its largest online retailer by revenue. China's online sales will grow to more than $4 trillion by 2023, up from $1.9 trillion in 2019, according to eMarketer. And much of these sales will take place on JD.com's e-commerce platform.
Unlike many of its rivals, JD.com has come to be known for selling higher-quality merchandise. As a direct retailer, it has greater control over its entire supply chain and can provide its more than 440 million customers with authentic merchandise. Additionally, its top-tier fulfillment network offers next-day or faster delivery service to 99% of China's 1.4 billion people.
JD.com's e-commerce and delivery services have proved vital during the coronavirus pandemic, particularly in its early stages when many brick-and-mortar retail stores in China were forced to close. This helped to accelerate its growth. The company's revenue jumped 29% to $25.7 billion in the third quarter, fueled by a 32% increase in active customers, while its adjusted net income soared 80% to $819 million.
With the Chinese e-commerce market set to become even more immense in the coming decade, JD.com has a long runway for expansion still ahead. That makes its stock a great buy today.
