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A Foolish Take: E-commerce is still in early innings

Eric Bleeker
The Motley Fool

Think we’ve hit peak e-commerce? Think again. The profit potential of the e-commerce revolution can be seen in one simple chart:


Pretty remarkable, right? While online shopping is growing at a rapid rate of 15% a year, it’s still only 8% of all retail sales.

So even though it feels like Amazon and eBay are conquering the world, the reality is we’re still in the early innings of a massive shift to online shopping.

And that 92% worth of sales yet to move online is worth a lot: $4.4 trillion, to be exact.

Picking the big future winner in e-commerce is tough. There are a number of companies fighting for a slice of the pie. E-commerce platforms like Amazon, eBay, and MercadoLibre make it possible to order practically anything online. Companies like Shopify and Paypal help individuals and businesses transition to the digital world. The key thing to remember is that, with a market opportunity this big, the rising tide may lift several boats.

So-called “growth” investing is centered on the idea of picking growth stocks before their full potential is recognized – and priced-in – by the stock market. It’s big trends like these which often enable companies to grow many-fold over a number of years, rewarding investors in the process. Amazon’s 2,100%-plus return over the past decade is a perfect case in point.

Realizing those types of returns requires two things – vision and patience. An investor needs vision to recognize the growth potential and buy the companies in a strong position to benefit, and patience to hold them until the story plays out – a process that can often take decades.

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