After a terrible 2022, the e-commerce industry seems to have found a bottom in 2023. Top players like Shopify and Amazon delivered an improved performance that resonated well with investors, which helped explain the robust share price performance.
Likewise, Global-e Online (GLBE 0.69%) performed well in 2023 with solid growth. Better still, the young company is just warming up and could keep churning out above-average performance in the near and longer term.
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Global-e executed well throughout 2023
Global-e is a growth stock many investors may not have heard of before but it's worth paying attention to these days -- and for good reason. When most e-commerce companies (such as Amazon and Shopify) struggled in 2022 amid the reopening of global economies, Global-e achieved a 67% increase in revenue and positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Global-e's robust performance continued into 2023, with revenue improving 43% and adjusted EBITDA more than doubling in the first nine months of 2023. The solid financial performance came from strong improvement in gross merchandise value (GMV), up by 47% year over year to $2.4 billion. It is also worth mentioning that growth was across all markets, including the United States, U.K., and E.U.
Global-e's solid performance stems from its ability to solve complex cross-border e-commerce problems for clients, including logistics, regulation, tax issues, localization, etc. By removing these hurdles for businesses, Global-e helps clients scale their cross-border sales quickly and become more successful. Ted Baker, Richemont Group, LVMH, and Walt Disney are examples of well-established brands using Global-e's services, a testament to the company's success in its endeavor.
In short, Global-e executed well even though it's just a young company founded around 10 years ago. Despite its size, this small company has global ambition and is well on track to sustain its growth momentum.
NASDAQ: GLBE
Key Data Points
Investors have started to pay attention
Global-e's rise has been remarkable, tripling its revenue from $136 million in 2020 to $409 million in 2022. Yet, what the young company has achieved to date is just the tip of the iceberg, considering the vast untapped market opportunity ahead of it.
For perspective, Global-e estimated that the global e-commerce market will reach $5.8 trillion by 2023, of which the cross-border e-commerce industry could be worth $736 billion. With an annualized GMV of less than $4 billion, Global-e has captured less than 1% of this opportunity.
To this end, the e-commerce company is working hard to grow as fast as it can handle. It is signing new customers to its platform, expanding into new markets, forming new partnerships, expanding existing customer wallet share, etc. to keep its growth machine going.
For instance, it enrolled new brands like Ted Baker and Lacoste in the third quarter of 2023 while expanding its existing relationships with LVMH by adding new maisons Repossi, Emilio Pucci, and Patou. In the same quarter, it renewed its third-party relationship with Shopify for another year and joined forces with Wix Commerce.
In short, Global-e has positioned itself for more growth in the coming years. As market sentiment for the e-commerce industry has gradually improved, investors have paid more attention to the upside opportunity rather than just the downside risk, contributing to the higher share price.
What it means for investors
Investors are always looking for the next big trend to find companies that could grow multiple times their existing size. With Global-e, investors need not jump into new and unproven trends. Instead, the young company is well-positioned to rise with an existing and proven tailwind.
Moreover, this young company has plenty of levers to pull to sustain growth, such as adding new clients, deepening its relationship with Shopify, adding new partners, and more. With so much going on for the company, investors should keep the stock on their radar.
