Following last month’s debut of the Baird/Digital Commerce 360 Ecommerce Stock Index, September results are now in. Those results framed ecommerce companies catching up with the S&P 500, closing a gap from August. Moreover, JD.com Inc., Global-e and Wayfair all played key roles in their individual categories.
At a high level, the index spotlighted key trends in today’s markets.
September takeaways from Baird/Digital Commerce 360 Ecommerce Stock Index
- The Baird/Digital Commerce 360 Ecommerce Stock Index rose 10% in September, outperforming the S&P’s 2% increase, and is up nearly 19% year to date.
- International ecommerce surged 24% due to Chinese economic stimulus, while Online Retail and Ecommerce Technology groups rose 9% and 6%, respectively, driven by investor enthusiasm.
- Resilient consumer spending, supportive government policies, and positive online shopping trends helped performance, even as weakness persisted in Europe.
This index is a collaboration between Digital Commerce 360 and the wealth management, capital markets, asset management and private equity firm Baird. It is intended to provide perspective into how companies and technology providers that power digital commerce are being valued in public markets. The index contains four categories capturing activity extending throughout the Americas and China:
- Online Marketplaces
- Online Retail
- Ecommerce Tech
- International Companies
Readers should note that this index complements insights from Digital Commerce 360’s Top 1000 data. That database specifically tracks online retailers and their online sales in North America. The Baird/Digital Commerce 360 Ecommerce Stock Index, meanwhile, covers both B2C retail and B2B ecommerce companies, in addition to the technology vendors that serve them, with a broader focus on global activity. All commentary and reporting is provided for informational purposes only and is not intended to be financial advice.
Read August’s ecommerce stock index results here.
September ecommerce stock index results
“The Baird/Digital Commerce Ecommerce Stock Index increased 10% for the month of September, significantly outperforming the S&P index, which increased 2% month over month,” said Colin Sebastian, Baird’s managing director and senior research analyst covering internet/ecommerce. “For the year-to-date, the index is now up almost 19%, which is largely on par with the S&P.”
Across the four categories observed in the index, top performers led results, powered by important trends that helped their cohorts broadly. In September, policy in China was a significant factor.
“With respect to sub-sectors of ecommerce included in the index, in September, the International ecommerce group increased by 24% vs. August, with JD.com, Pinduoduo and Alibaba all benefiting from the Chinese government’s economic stimulus proposals to boost consumer spending,” Sebastian said.
Meanwhile, in the U.S., the Federal Reserve’s move to lower interest rates helped online retailers in cases where consumers are more likely to take on debt to fund purchases.
“The Online Retail group increased 9% for the month, led by Wayfair and Carvana, with prospects of easing Fed policy driving investor enthusiasm for rate-sensitive stocks — both companies have debt on their balance sheets and sell higher-priced items (furniture and cars, respectively),” he noted.
Elsewhere, the Ecommerce Technology group in the index also had a good month. It rose 6% over August, thanks to top performers Global-e, Klaviyo, PayPal and Shopify. The Online Marketplaces group also increased 5% for the month, with Instacart, DoorDash and eBay as its top three performers.
“Baird views the overall September index strength as indicative of resilient consumer non-discretionary spending trends, accommodating government policies, and prospects for healthy online shopping trends continuing through the holiday period, despite the shorter shopping window post-Thanksgiving and potential for distraction from elections,” Sebastian explained. “One soft spot remains Europe, where the macro outlook remains weak, and consumer spending trends continue to lag most other regions of the world.”
Stocks leading the index in September
Among international companies tracked in the index, JD.com stood ready to benefit from the fiscal stimulus package announced in China in September. As the fourth-largest online marketplace tracked in Digital Commerce 360’s Global Online Marketplaces Database, it can benefit from consumer spending alone. However, it also has interests in logistics, technology, health care and finance offerings.
In the U.S., Wayfair remains challenged in the middle of a turnaround plan and year that began with major layoffs. Wayfair’s revenue of $3.1 billion during its fiscal second quarter was down 1.7% year over year. However, renewed spending on home improvement, home furnishings and real estate in light of lower interest rates could benefit the furniture retailer, potentially improving its prospects.
Wayfair is No. 10 in the Top 1000 Database. It’s the largest Housewares & Home Furnishings online retailer in North America. Digital Commerce 360 projects Wayfair’s full-year ecommerce sales to reach $12.19 billion in 2024.
Wayfair web sales by year
In technology, Petah Tikva, Israel-based Global-e saw its revenue grow 26.0% year over year. That’s up to $168.0 million during its fiscal second quarter. The company provides an ecommerce platform and payment options for global transactions, such as those being provided through its Wix integration announced earlier this year. Global-e will hope to see the volume of sales and shipping through its services continue to keep that growth going.
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