2 ASX ecommerce shares to buy in January

Adore Beauty Group Limited (ASX:ABY) and this ASX ecommerce share could be great options for investors in January. Here’s why…

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As I mentioned here earlier today, IBM estimates that the pandemic has accelerated the shift to online shopping by as much as five years.

This bodes well for a number of companies on the Australian share market such as the ecommerce companies listed below.

Here’s what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

The first ecommerce company to look at is Adore Beauty. It is a recently listed online retailer which sells third-party beauty and personal care products to over 590,000 active customers across the ANZ region. From these customers, the company is expecting to generate revenue of $158.2 million in 2020. This will be up 76% on the prior corresponding period.

Pleasingly, this is still only scratching at the surface of its opportunity in the ANZ market. The company notes that Frost & Sullivan estimates that the ANZ beauty and personal care products market was worth $10.9 billion in 2019.

One broker that is positive on its prospects is Morgan Stanley. It has an overweight rating and $8.35 price target on the company’s shares. This compares to the current Adore Beauty share price of $5.38. It believes the company will benefit from the shift to online shopping.

MyDeal.com.au Limited (ASX: MYD)

Another ecommerce company to look at is MyDeal.com.au. It is an online retail marketplace provider with a focus on furniture, homewares, appliances, technology, baby products, and hardware.

Due to the aforementioned acceleration in the shift to online shopping this year, MyDeal has been a very strong performer. During the first quarter of FY 2021, the company delivered a 317% increase in gross sales to $56.67 million. This was underpinned by a 268% increase in active customers to 669,897.

Analysts at RBC Capital Markets are fans of the company. The broker has a buy rating and $1.60 price target on its shares. RBC Capital Markets thinks the company is at an inflection point as annualised gross transaction value exceeds $200 million and customer numbers approach 700,000.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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