The e-commerce industry has been an enormous tailwind that has led to the creation of some of the biggest companies like Amazon, Shopify, and Mercadolibre. But for those who missed the bus early on, betting on these massive companies today might not give them the same return potential that early investors had.
Fortunately, there are other up-and-coming companies with the potential to become future e-commerce giants. Global-E Online (NASDAQ: GLBE) is one of these companies.
Global-E is executing at a world-class level
Global-E is not a well-known growth stock -- it has been a public company for less than three years and is a foreign company based out of Israel.
But Global-E offers a valuable service by helping enterprising merchants sell their products overseas, solving problems in areas like customer acquisition, localization of the shopping experience, cross-border logistics, forex, tax issues, and others. The company's value proposition lies in its ability to solve these complex problems so sellers can focus on doing just one thing -- selling their products to customers globally.
So far, enterprises seem to like its service, which explains its rapid rise over the last few years. Between 2020 and 2022, revenue grew three-fold from $136 million to $409 million, propelled by the increase in demand for online products during the pandemic lockdown. Gross merchandise value (GMV) more than tripled from $774 million to $2.45 billion during that period.
While it was normal for e-commerce companies to deliver solid results during the lockdown periods, sustaining that performance in recent quarters became challenging as global economies reopened. But that's precisely what Global-E did.
The e-commerce company increased revenue 54% year over year in the first quarter of 2023 and sustained that momentum with 53% growth last quarter. The tech company attracted new brands like Mercedes, Carbon 38, Doen, Psycho Bunny, Maui & Sons, and Lulu's, while also growing its business with existing clients like the LVMH group. It has also been working with Shopify to help merchants scale their cross-border business.
And with a quarterly GMV of just $825 million, Global-E has an enormous opportunity to keep growing for years, if not decades -- more on this in the next section.
Global-E has a bright future ahead of it
Global e-commerce is a massive and growing industry. In its IPO prospectus, Global-E estimated this market could be worth $5.8 trillion by 2023. Within that, the cross-border e-commerce industry could reach $736 billion. With an annualized GMV of around $3.3 billion, the young company has just touched the tip of the iceberg.
It's determined to grab as much market share as possible by signing new companies and brands every quarter, growing its business with existing customers, and partnering with Shopify to accelerate its expansion plan.
And while it's doing well in early markets like the U.K., it's rapidly growing customers in newer regions across the United States, Europe, and Asia. For example, it onboarded Asia-based brands like Venroy, Rollie Nation, Lahana, and Lilybod in Australia; Japanese brands including Hinoya, 45R, A-tude, Nubian, and Anna Sui; and its first-ever Korean brand -- HYEIN SEO -- in the second quarter of 2023.
With Shopify as both an investor and partner, Global-E has access to plenty of resources, including merchants, technology, and potentially additional cash infusions, to help it scale its business to greater heights.
So while Global-E might not be a household name, it's one that investors (especially growth investors) should be paying attention to.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, Global-e Online, MercadoLibre, and Shopify. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
