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Shopify Is the Poster Child of New E-Commerce

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E-commerce is on fire this year as the pandemic kick-started a behavioral shift in consumers and accelerated online retail. Stitch Fix’s (NASDAQ: SFIX) saw its shares rise nearly 50% this week after reporting stellar results, along with accelerated customer growth and upbeat outlook. But it is the e-commerce behemoth Shopify (NYSE:SHOP) that surpassed eBay (NASDAQ:EBAY) this year, as the second-largest e-commerce platform in the U.S. by sales volume after Amazon (NASDAQ:AMZN). This was quite a blow for eBay, the world’s first online auction platform for person-to-person transactions. This explains why Shopify stock has soared more than 3,700% over the past half of a decade, with Amazon stock growing 375%, leaving eBay far behind at 76% increase. Here is a deeper look into Shopify’s success story.

1. New e-commerce is decentralized

eBay’s platform could have been revolutionary back at its days, but today, it has been overrun by Etsy (NASDAQ: ETSY) as well as social media platforms like Pinterest (NYSE: PINS) and Facebook‘s (NASDAQ: FB) Instagram who have integrating online purchases into their ecosystems.

Shopify that gathers over a million merchants helps them set up online stores, process payments, manage their marketing campaigns and fulfill orders. In other words, Shopify operates behind the scenes to help companies establish their own online presence without being dependant on Amazon or eBay. This is what being disruptive means. Earlier this year, Shopify even launched Shop, a consumer-facing app that provides searchable listings for its merchants.

Its decentralized approach gives merchants the freedom to expand their online footprint without diluting their identity in a crowded marketplace. It makes it easy for merchants to achieve economies of scale as their business grows.

2. Fortune favors the bold

Over the past half of a decade, eBay’s business has been shrinking. Back in 2015, it spun off PayPal (NASDAQ: PYPL) and shut down its fixed-price subsidiary Half.com in 2017. This year, it sold its online tickets platform StubHub and it plans to sell its online classifieds platform. It also reduced its marketing spending last year in an effort to boost its profit and the percentage of each sale it retains as revenue. By prioritizing profit over growth, eBay is confirming it is a mature company which therefore implies, its growth prospects are limited.

On the other end, since its IPO in 2015, Shopify has expanded significantly by acquiring the digital consulting and product development firm Boltmade in 2016, the drop-shipping platform Oberlo in 2017, and the warehouse automation company 6 River Systems last year. It has partnered with Amazon to let merchants sell products on Amazon from their Shopify stores. It has added similar integrations with Facebook, Alphabet’s Google (NASDAQ: GOOGL), Snap’s (NYSE: SNAP) Snapchat, and ByteDance’s TikTok.

Shopify has also expanded its own payments platform, Shopify Payments, which processed nearly half of its gross merchandise volume (GMV) last quarter. It launched its own fulfillment network to offer additional services via its own app, along with tweaking its premium Shopify Plus tier for larger merchants. These efforts only confirm Shopify’s is reinvesting cash to keep growing as opposed to cutting costs to protect its bottom line.

3. Emphasis on continuous growth

eBay’s revenue’s sluggish growth of 1% last year was blamed on reduced marketing expenses and higher internet sales taxes in several states across the US. Adjusted net income rose just 5%, but its earnings per share were boosted 22% by big buybacks. This year, eBay expects its revenue and adjusted EPS to rise approximately 20% but these favourable growth rates are attributable to the overall acceleration in online sales due to the pandemic. This will no longer be the case next year, revenue and earnings are expected to grow only 7% and 9%, respectively, next year.

Last year, Shopify’s revenue rose 47% and its GMV surged 49%. Its adjusted EPS did drop 30% but this is due to 6 River Systems being integrated into its new fulfillment network. But this year, analysts expect revenue for the full year will be boosted 81% with adjusted EPS expanding more than 10x. Analysts expect Shopify will continue generating high double-digit sales growth, but its earnings growth could remain unpredictable due to the ongoing investments to expand its ecosystem.

A rapidly evolving market

The pandemic gave online retail a push greater than any other in history. COVID-19 has accelerated the e-commerce industry’s growth and more and more businesses are embracing this business revolution. Companies that previously embraced the e-commerce trend are experiencing expansion while traditional retail was struggling just to stay afloat.But as the market keeps evolving at a rapid face, it arguably favors disruptive players like Shopify that lets merchants build their own online brands and optionally links them to Amazon and social networks as opposed to trapping them in a walled aquarium filled with price wars.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

The US Is Catching Up In the EV Race

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Worksport Terravis Solar System On Electric Pickup Truck

Europe has overtaken China as the world’s biggest EV market. Encouraged by subsidies and offerings, consumers bought EVs at a record pace last year, nearly doubling the continent’s share of global new electric car sales to 43%. But this success is largely owed to government support programs, some of which will expire this year which is why analysts warn the momentum could be reversed if and when that support is withdrawn. Meanwhile, the U.S. is going full speed ahead and unlike Europe, the US market is not as sensitive to government and company discounts.

The US is “waking up”

Around 65 new EV models launched in Europe last year which is twice as many as in China, with another 99 scheduled to hit the market this year. North America saw 15 launches last year, but 64 are planned for this year. What happened with Europe is that manufacturers had the right products to offer such as Volkswagen AG (OTC: VWAGY), Europe’s biggest auto maker, with its ID.3 and ID.4 models. But, the US is well on its way to catch up as legacy automakers are set to being rolling out electric versions of their iconic models. General Motors (NYSE: GM) went as far as making a Super Bowl ad starring Will Ferrell, who called on American consumers to buy EVs and crush Norway that ended up as the world’s biggest EV market per capita last year.

Legacy automakers are catching up

GM’s EVs are starting to take shape with the new lower-priced Chevy Bolts, the first in its lineup of ‘affordable’ EVs. Ford Motor (NYSE: F) vowed to sell only EVs in Europe and the UK by 2030, making it the largest automaker to commit to all-electric sales on the continent by that timeframe with its first Mustang Mach-E arriving hitting dealerships. Although this vehicle needs to convince Wall Street that Ford is headed in the right direction, Ford’s most eagerly anticipated EV, the electric F-150 is a year away.

Electric pickups are coming

Until recently, the EV revolution was limited to small vehicles, with the most popular vehicles in the US, pickups and SUVs, absent from the offerings. But that is about to change this year as advances in battery technology made it more affordable to insert battery technology into heavier vehicles with many pickups due to hit the market over the next 12 to 24 months, including new entrants, Rivian R1T, Atlis XT pickup and Hercules Alpha, along with revived Hammer for GM not to miss any action.

Worksport expands capacity

Atlis Motor Vehicles and Hercules Electric vehicles partnered with innovative truck tonneau cover manufacturer Worksport to configure its ground-breaking TerraVis system, the world’s first solar charging and power storage system for pickups, into its eagerly anticipated models. This revolutionary technology helped Worksport receive its first trademark registration in China in February.

Expansion

Worksport LTD (OTC:WKSP) announced this morning its strategic manufacturing expansion. The company is in final phases of discussions with a few very-high-value strategic partners, Tier-1 and Tier-2 OEM manufacturing power houses in Canada to expand its manufacturing into North American state-of-the-art facilities with 20,000 to 50,000 square feet of operating space to meet its recent U.S.-based Private Label customer growth.

New ecosystems

These discussions involve logistics for the best and most effective ways to support the company’s growth and ensure scalability in Worksport’s manufacturing processes. The company tapped into both the pickup market as well as the consumer market by extending its solar fusion line with mobile TerraVis COR™ system that can be used independently and recharged via solar or A/C power. The expansion will not only support Worksport’s expanding and maturing footprint, it will give the company control over capital expenses, greatly reducing risks of overextending its financials during periods of intense demand while building its major-player Automotive, Freight & Transport, Marine, and Rail ecosystems, at helm of its CEO Steven Rossi. The company is going all in to exceed customer expectations and all of its efforts directly enhance and benefit the EV market.

Takeaway

While most industry leaders welcome government efforts to fuel new technology markets such as EVs, auto makers worry that subsidies will only have a short-term impact. A global adoption without broader structural changes won’t create a self-sustaining market. What governments should focus on is developing the supporting infrastructure such as charging stations.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

This Week’s Stars Are Zoom, Target and Costco

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Zoom Video Communications (NASDAQ: ZM) will open the week on Monday after market close whereas big box retailers highlight the week’s other big releases, led by Target Inc. (NYSE: TGT) on Tuesday and Costco Wholesale Corp. (NYSE: COST) on Thursday.

Zoom Video Communications

According to Financial Times, researchers at Stanford University have confirmed what millions of remote workers already knew, that “Zoom fatigue” causes greater stress than meeting in real life because of the “non-verbal overload” of endless video calls. Not to mention that users are seeing reflections of themselves at a frequency and duration that hasn’t been seen before in the history of media and the history of people. Although some problems could be solved with trivial changes to its user interface, such as automatically hiding the “selfie” window, the bigger problem is On Zoom, behavior ordinarily reserved for close relationships such as faces seen close up has suddenly become the way we interact with casual acquaintances and even strangers. This new way of communication takes a toll on our mind and that could eventually hamper Zoom’s success with the stocking already having lost its luster due to vaccine developments.

Novavax (NASDAQ: NVAX) is preparing to launch its COVID-19 vaccine after 33 years of failed attempts and facing delisting from the Nasdaq as it couldn’t deliver a single approved shot. We will get a new chapter in a fairytale-like story of a little company that was on the verge of potentially closing getting the chance to play with the big boys in the race for the Covid vaccine. As soon as its vaccine gets approved, it is ready to produce 150m doses a month.

Nio (NYSE: NIO) will pop the hood after market close. Earlier it stated that Q4 deliveries were at a record of 17,353 vehicles which is an increase of 111% YoY and over the upward end of its guidance. But, when it comes to EVs, profitability has frequently taken a back seat and despite the encouraging deliveries, the company has been in the red.

Tuesday

Kohl’s (NYSE: KSS) and Target are due to report before market open. Last week, a group of activist investors pressured the department store to address stagnant sales and operating margins so it will be interesting to see how the story continues as critics find the company isn’t moving fast enough to turn itself around. On the other end, Wall Street expects Target to post a profit of $2.54 per-share on $27.4 billion in revenue which would be an impressive 50% profit increase. Some of its biggest peers have already reported fourth-quarter earnings but investors have big expectations for its holiday quarter. We already know Target had a good season as it revealed that sales grew 17% during the holidays which on its own is enough to outpace Walmart (NYSE:WMT), which just reported a 9% holiday quarter boost. But, this is a slight slowdown from its third quarter’s 21% growth so we’ll learn whether Target continued to win market share in each of its core selling categories. Nordstrom (NYSE: JWN) and Box Inc. (NYSE: BOX) will board the reporting train after market close.

Wednesday

Dollar Tree (NASDAQ: DLTR) will report before market open with Okta (NASDAQ: OKTA), Snowflake (NYSE SNOW) known for its ‘too hot to handle IPO’, Vroom Inc (NASDAQ: VRM), Splunk (NASDAQ: SPLK) will reveal their earnings after market close.

Thursday

Kroger (NYSE: KR) will report before market open with Opendoor Technologies (NASDAQ: OPEN), Broadcom (NASDAQ: AVGO), SmileDirectClub (NASDAQ: SDC), Costco and The Gap (NYSE: GPS) closing the earnings week after market close.

This week will be full of retail that was dramatically changed by the pandemic. We will also get a better idea if Zoom can maintain its success beyond the pandemic as despite its many benefits, digital communication didn’t measure up to in-person socializing.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Airbnb Delivered a Loss in Its First Post-IPO Earnings Report

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With its first earnings report as a public company, Airbnb Inc (NASDAQ: ABNB) posted an annual loss. Annual deficit of $4.6 billion was the result of the coronavirus pandemic ravaging the travel industry. But the uptick in local travel, combined with a successful cost cutting strategy helped the company’s market capitalization to exceed more than $100 billion which makes it more valuable than Marriott International Inc., (NASDAQ: MAR), Hilton Worldwide Holdings Inc. (NYSE: HLT) and Hyatt Hotels Corp. (NYSE: H) combined. Airbnb also had a far less sever revenue decline compared to its main rivals, Expedia (NASDAQ: EXPE) and Booking.com (NASDAQ: BKNG), which were down 67 and 63 per cent respectively over the same period. Airbnb’s share price nearly doubled from their IPO price.

There’s no going back

The pandemic did initially crushed the home-sharing giant’s business when lockdowns were imposed across the globe. But, Airbnb avoided a disastrous outcome thanks to an unforeseen increase in local excursion. Although yearly revenue declined, it wasn’t as much as analysts expected as no one considered that people will find a way to get out of their everyday routine, even if it’s by making a local trip. The company’s CEO Brian Chesky doesn’t think to the world of travel will ever go back to how it was before COVID-19 started its relentless march across the globe but the company found a way to live with that.

Capitalize on new trends

Mr. Chesky outlined how the health crisis had reshaped the business, pointing to a significant uptick in long-term stays as people around the world work from home which will offer the freedom to live more nomadic lives. Some large employers have said they would offer that flexibility even when things return to normal, and Airbnb can capitalize on that trend.

Dealing with the pandemic

Although hotel chains with a significant footprint in big cities suffered, Airbnb redesigned the company’s website and app to show prospective travelers everything from lavish beach houses to rustic cabins nearby. Combined with cost-cutting efforts, it managed to weather to storm that paralyzed the whole world.

Figures

Fourth-quarter revenue fell 22% YoY to $859 million with full-year revenue dropping 30% to $3.3 billion. Fact Set analysts expected fourth-quarter revenue drop of 33% and and a drop of 32% for the full year.

The company trimmed a quarter of its staff, paused noncore operations and slashed its hefty marketing budget to keep expenses down. Although it couldn’t avoid a loss, the $3.9 billion loss for the quarter ended in December also includes IPO-related costs of $2.8 billion and an $827 million adjustment for the loans it needed to navigate through the crisis. Last year’s fourth quarter saw a loss of $351 million, but the latest loss brought the company’s full-year deficit to $4.6 billion, which is more than its losses in the previous four years combined, exceededing the average forecast of analysts surveyed by FactSet.

Airbnb’s full-year expenses rose 31% to $6.97 billion on the back of IPO-related stock compensation in the fourth quarter. However, before accounting for stock compensation, expenses in each category, from product development to operations and support services were lower. In this case, sales and marketing expenses declined 66% in 2020 compared to 2019 whereas when those costs are accounted for, the same expenses rose 44%.

Like other companies, Airbnb offered an adjusted metric that excludes such costs so the negative EBITDA shrank to $251 million compared to $253 million in the previous year. On the same basis, its Q4 loss narrowed significantly to $21 million from 2019’s Q4 loss of $276 million.

Outlook

Airbnb declined to give any formal guidance for the year ahead due to uncertainty of the undergoing health crisis. While the third quarter is the busiest for Airbnb, the company has turned a profit in that period since 2018, even during the pandemic, the first quarter is the slowest. But it expects bookings in the three months through March to be better than in the same period last year, when the health crisis first struck, but still below 2019 levels. The home sharing company plans to invest in marketing and product development during the first half of this year, so it is positioned to benefit from an expected rebound in the second half that the whole travel industry is hoping for. Management assured investors that costs will be controlled from soaring to pre-pandemic levels.

Airbnb’s valuation plummeted to $18 billion nearly a year ago, as it raced to secure funds to weather the crisis. Its rapid growth also came with its share of challenges as homeowners from Arizona to Florida and Massachusetts are campaigning for laws to govern short-term rentals as they mind the increased noise, as well as connect it to crime and falling property values. The bottom line is that remote work helped Airbnb’s earnings hold up better than expected amid a crushed travel industry and it could easily be the source of its future revenue. It suffered heavy losses, mostly due to costs related to its long-awaited market debut in December, but it is also confident about its post-Covid-19 prospects as it adapts to new lifestyle trends.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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