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.