Investors frequently describe Amazon as the “leading e-commerce stock.” This makes sense given that it pioneered and continues to be a force in the business.

Nonetheless, they may turn against Amazon since e-commerce development has slowed substantially. Instead, some of its international colleagues continue to grow significantly, which may prompt investors to consider Shopify (SHOP -0.14%), MercadoLibre (MELI -0.86%), or Sea Limited (SE -2.20%) as the new top e-commerce stocks.

1. Shopify

Shopify will most likely thrive not because of its e-commerce platform, but because of how it supports its e-retailers. Yes, the Ottawa-based firm has established a competitive advantage by providing a strong sales platform that clients can readily personalize.

Shopify, on the other hand, provides assistance to customers through an enormous ecosystem. These clients can use inventory management, payment, and capital-raising services. Additionally, Shopify’s fulfillment arm may assist customers with storing, packaging, and shipping goods.

According to BuiltWith, these qualities helped Shopify become the leading e-commerce platform supplier in the United States, with a 25% market share. Shopify beat out website builder Wix and WordPress plugin WooCommerce to earn the title.

To be sure, the cost of establishing a fulfillment network contributed to the company’s return to losses. And, as e-commerce growth slows in a digital bear market, Shopify stock has fallen around 80% from its all-time high.

Despite these hurdles, revenue for the first nine months of 2022 increased 20% year on year to $3.9 billion. In addition, the price-to-sales (P/S) ratio of 8.8 reached a multiyear low. Given Shopify’s growing impact, purchasing now could be a wise decision.

2. MercadoLibre

MercadoLibre, like Shopify, has prospered in a diverse ecosystem. The Argentine conglomerate, whose name means “free market,” has prospered by bundling services meant to meet obstacles peculiar to conducting business in Latin America.

One big issue is that a significant portion of the local population lacks bank accounts and credit cards. Its fintech business, Mercado Pago, addresses this issue by providing services to simplify online purchases for cash-based customers. This includes loans through Mercado Credito, which can compute credit scores and provide loans to people or corporations.

Furthermore, Mercado Envios may store, package, and deliver products. That section can frequently give same-day or next-day delivery, a service not generally available in that portion of the world.

MercadoLibre produced over $7.5 billion in net revenue through this ecosystem in the first nine months of 2020, a 52% increase year on year. In addition, thanks to initiatives to reduce the cost of net revenue, its $317 million in net income during the time increased 146% year over year.

Despite this performance, the bear market weighed on the online and direct marketing retail stock, which fell by more than half from its all-time high.

Nonetheless, the P/S ratio of 5 shows a moderate recovery from all-time lows. Despite these circumstances, MercadoLibre’s strong revenue growth has been maintained, indicating that this reduced stock price may not last.

3. Sea Limited

Another stock to consider is Sea Limited, which has emerged as the MercadoLibre of Southeast Asia. It, like its Latin American equivalent, has an e-commerce branch, Shopee. Shopee has emerged as the top e-commerce site in Southeast Asia, and it has expanded into Poland and four Latin American nations.

In addition, like MercadoLibre, the Singaporean company has a fintech division. This sector, Sea Money, provides digital financial services in its Asian regions.

It varies from its contemporaries, though, in that it began in gaming and continues to manage Garena, a game development and publishing company. Garena is well known for her battle royale game Free Fire, which was the most downloaded game from 2019 to 2021.

Sea’s sectors produced $9 billion in revenue in the first nine months of the year, up 34% from the same period last year. Although Garena’s income increased by only 1% during that time period, revenue from e-commerce and other services increased by 70%!

Nonetheless, fast spending growth resulted in losses growing by 45% to approximately $2.1 billion during that time. In addition, amid the tech bear market, Sea Limited shares have fallen 75% this year.

However, because the decrease brought the P/S ratio down to just around 3, the losses may become more palatable for certain investors. And, given that its e-commerce and gaming businesses should eventually revive, Sea Limited stock should benefit as well.

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