The COVID-19 pandemic has affected every industry in the world but also accelerated many trends, and eCommerce might be one of the biggest.
Many retail platforms witnessed unprecedented traffic increase in 2020, surpassing even holiday season traffic peaks. The coronavirus-led boom in online sales caused a surge in revenues and market capitalization of the market’s biggest players.
According to data presented by Buy Shares, the market capitalization of Amazon, Alibaba Group, JD.com, eBay, and Rakuten, as the five largest eCommerce companies globally, hit almost $2.6trn in October, a 90% jump year-over-year.
Amazon and Alibaba Combined Market Cap Surged by $1.1T YoY
In September 2019, the combined market cap of the five eCommerce giants amounted to $1.38trn, revealed Yahoo Finance data. By the end of the year, this figure jumped to $1.58trn.
After a slight drop to $1.57trn in March, it rose to $2.1trn in June, a 33% increase since the beginning of 2020. In the next three months, this value jumped by $490bn, reaching almost $2.6trn in October.
Amazon witnessed an 83% increase in market capitalization year-over-year. In December 2019, the combined value of shares of the world’s leading eCommerce company hit $920bn. Over the next three months, this figure rose to $972bn, despite the stock market crash in March. In June, Amazon smashed through the one trillion benchmark and continued growing. Statistics show the retail and eCommerce giant`s market cap stood at $1.58trn in the last week of October, a $720bn increase year-over-year.
The company recently reported its better-than-expected third-quarter results, which revealed double-digit revenue growth. Amazon revenue spiked 37% YoY to $96.15bn between June and September, up from $92.7bn expected. Earnings per share hit $12.37, much more than $7.41 expected.
Alibaba Group, the world’s second-largest eCommerce company, witnessed a 90% growth in market cap, with the total value of shares rising from $436.1bn in September 2019 to $831.4bn in October.
The revenue of the Chinese tech giant jumped 30% YoY to $22.8bn in the third quarter of 2020, with adjusted EBITDA up 28% year-over-year. The number of active consumers on China retail marketplaces hit 757 million, 15 million up from the twelve months ended June 30.
Chief Financial Officer of Alibaba Group, Maggie Wu, said: “Our domestic core commerce business continued growing steadily during the post-COVID-19 environment in China through higher purchase frequency and consumer spending, while cloud computing revenue grew 60% year-over-year, driven by the acceleration in digitalization across all industries and businesses of all sizes in China.”
Statistics show the combined market cap of the two largest eCommerce companies globally stood at $2.4trn in October, a $1.1trn increase year-over-year.
JD.com Witnessed a 215% YoY Growth, the Biggest Increase in 2020
China’s largest online retailer by revenue, JD.com, reported rising profitability and sales growth in its first quarter of being listed on both Wall Street and in Hong Kong. In August, the company reported quarterly net profits of Rmb16bn ($2.3bn), up from Rmb600m a year ago. Revenue jumped 34% YoY to Rmb201bn, up from the Rmb191bn forecast by analysts. The annual buyers’ count also rose by 30% to 417 million, the most significant increase in two years.
JD.com also announced an investment of $830 million from private equity group Hillhouse Capital in its JD Health unit, which offers an online pharmacy and medical consultations.
In December 2019, the market capitalization of the Beijing-based company hit $51.7bn. In the next six months, this figure increased by 45% to almost $60bn. The noticeable upward trend continued in the following months, with the market cap soaring by 215% YoY to $129.6bn in October, the most significant increase among the top five companies.
As the fourth-largest eCommerce firm by market cap, eBay witnessed a 16% growth in a year, with the combined value of shares rising from $31.9bn in September 2019 to $37.2bn in October.
The market cap of Japanese eCommerce company Rakuten, the fifth-largest eCommerce giant on the list, rose by only 3% in this period reaching $13.7bn at the end of last month.
Interswitch is the Most Valuable African Startup
Interswitch, the leading payment processing company headquartered in Lagos, Nigeria, is Africa’s most valuable start-up at a US$ 1 billion valuation.
Founded in 2002, Interswitch uses switching infrastructure to connect different banks in Nigeria and powered banks’ ATM cards. Presently, the company has over 11,000 ATMs on its network.
In 2010, Helios Investment Partners bought two-thirds of the company and in the following year, Interswitch bought a 60 percent stake in Bankom in Uganda.
Interswitch owns Verve, Nigeria’s most used payment card, and accounted for 18 million of 25 million cards in circulation in Nigeria. The company also owns Quickteller and recently purchased VANSO, a mobile-focused technology provider to banks.
Like Interswitch, Stripe, the company that acquired Nigeria’s Paystack for over US$200 million, is the most valuable startup in the USA at over US$70 billion valuation.
Klarna, Nubank, Paytm and Grab leads in Europe, Latin America, India and Southeast Asia with valuations of US$10.65 billion, US$10 billion, US$16 billion and US$14 billion, respectively.
E-commerce Black Friday Sales Estimated to Surge by 40% to 10.2 Billion
The 2020 holiday shopping season will be unique, as the pandemic shifted consumer behavior from retail stores to online shopping. In response, many retailers moved their services online to not miss out on this year’s profits. Atlas VPN team decided to look into how e-commerce sales are set to perform in the upcoming long weekend.
Researchers predict that the US e-commerce revenue will exceed last year’s earnings by 49.5% on Thanksgiving day, totaling $6.18 billion in revenue. Black Friday is calculated to reach $10.2 billion in sales, exceeding last years numbers by 39.4%
Rachel Welch, COO of Atlas VPN, shares her tips on how to stay safe when shopping online during the holiday season:
“Watch out for too-good-to-be-true deals from unknown sellers, as cybercriminals will also expect to turn a profit during the holiday season, even though they are not selling anything, except maybe a bag full of disappointment.”
Finally, analysis shows that on the last day of the long and full of special offers Thanksgiving weekend, consumers will go all out to bring record sales for e-commerce businesses, adding up to $12.89 billion.
To look at these five days from a wider perspective, e-commerce companies can expect to earn around 39.72% more than they did last year.
Alibaba Merchants Sell $40B in First Half Hour of Singles Day 2020, More than 2019 Event Full Sales
Singles Day 2020 was a roaring success, cementing its position as the world’s biggest shopping holiday. Sales across Alibaba’s platforms during the event totaled $74.1 billion, up from $38 billion in 2019.
According to the research data analyzed and published by Stock Apps, within the first 30 minutes of the event, the gross merchandise volume (GMV) surpassed 2019’s full-event sales, reaching $40.87 billion.
Moreover, instead of live events, Alibaba had 400 company executives and 30 celebrities hosting livestreams. Based on a study by Coresight, the Chinese livestream market is set to rack in sales worth $125 billion in 2020, compared to $63 billion in 2019. The US livestream market is a small fraction of that, valued at $5 billion.
China’s Tech Heavyweights Lose $280 Billion in Market Cap
Alibaba Singles Day 2020 dwarfed other major shopping holidays as has been the trend in previous years.
According to Practical eCommerce, Amazon Prime Day 2020 sales totaled $10.4 billion up from $7.16 billion in 2019. Cyber Monday sales in the US amounted to $7.9 billion in 2020 according to Statista. Black Friday and Thanksgiving added $9.7 billion to the figure to make $17.6 billion for the weekend.
Similarly, in 2018, Singles Day sold $30.8 billion while Prime Day sold $4.19 billion and Thanksgiving weekend got $14.2 billion.
However, the 2020 Singles Day event came in the wake of Ant Group’s suspension of a $37 billion listing. The suspension resulted in a $76 billion drop in Alibaba’s market cap, as the tech giant owns a two-thirds stake in Ant Group. Moreover, China’s regulators released anti-trust draft rules prior to the event, aimed at controlling monopolistic behavior.
Following the release, Alibaba shares plunged by 9.8%, as JD.com shed off 9.2%. Tencent similarly saw a 7.39% drop and Xiaomi fell by 8.18%. For the five companies, there was a combined loss of $280 billion in market capitalization.
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