MENU

Here’s why you can get rich investing in ecommerce shares on the ASX

I think that investing into ecommerce shares on the ASX could be one of the best ways to become rich with your portfolio.

The economics of ecommerce, platforms and networks are usually very good. A single website (and app) with efficient distribution centres is a much cheaper business model to operate than a national footprint of retail stores.

The more users and sellers it can attract to its platform, the stronger the economies of scale. Once a platform gets ahead of competitors, it’s quite rare that you’ll see competitors able to catch up.

Chinese company Alibaba just held its annual Singles Day sales event. In 85 seconds it generated sales of US$1 billion and US$10 billion in the first hour. Overall, US$30.8 billion was spent, a 27% increase compared to last year. Quite amazing, right? It shows that the Chinese public isn’t stopping spending despite the trade ‘war’ with the US.

The Alibaba share price is up 91% over the past three years, despite the recent pull-back. We can buy an indirect slice of Alibaba through funds. Alibaba is 9.1% of the UBS IQ MSCI Asia APEX 50 Ethical ETF (ASX: UBP) portfolio and it’s 9.9% of the BetaShares Asia Technology Tigers ETF (ASX: ASIA) portfolio.

Amazon is another ecommerce giant that can point to growing economies of scale and huge disruption of bricks and mortar retailers as well. In the last year alone the Amazon share price is up over 50%. BetaShares NASDAQ 100 ETF (ASX: NDQ) is one of the most popular ways to get exposure to Amazon on the ASX.

The bigger these giants become the harder it is for a competitor to make a dent – similar to how Google is now such a dominant player of search.

Foolish takeaway

Over the next 10 years I imagine Amazon and Alibaba will be some of the best-performing blue chips in any share markets.

There some ASX shares that also operate ecommerce platforms such as Kogan.Com Ltd (ASX: KGN) and Paragon Care Ltd (ASX: PGC) which are fairly new to the ASX so they don’t have strong economic moats yet.

Whilst shares such as REA Group Limited (ASX: REA) and Carsales.Com Ltd (ASX: CAR) have been long-term ecommerce winners for shareholders.

Other market-beating shares that I’ve got my eye on are these top ASX stocks.

3 Top Shares To Buy In November

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison owns shares of BetaShares Asia Technology Tigers ETF and Paragon Care Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended carsales.com Limited, Kogan.com ltd, Paragon Care Limited, and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.