STOCK WATCH: E-Com Index Struggles, Adore Best Performer

If last week were the warning signs of E-Com’s downwards trajectory on the ASX, this week we’re well and truly in the thick of it.

Even reliable investor favourites have performed dismally, with Temple & Webster not only failing to maintain growth but actually shedding 2.5 percent in the last seven days, closing at $12.28 on Tuesday. In fact, the majority of the ASX Listed E-Commerce Index lost value, with Kogan opening at $9.71 this morning (down 5.1 percent in the last week), far from the $13+ we would be hoping to see heading into November. Similarly, Redbubble lost 6.7 percent in the last week, MyDeal lost 1.3 percent and Booktopia lost 7.9 percent, which is the biggest swing we’ve seen for some time.

While Booktopia has remained fairly steady over the last year (showing none of the real volatility we’ve seen in other companies) it has shed 15.9 percent over the last 90 days. This is after its Annual Report was released last week. ‘Our Prospectus set some very ambitious targets for out first year as a listed company, and I am very happy to report we have been able to eclipse those expectations,’ said Tony Nash, CEO and Managing Director of Booktopia. So if underperformance isn’t the issue, why are we not seeing continued growth? Average annual spend per customer is up 14 percent, Underlying EBITDA is up 125 percent at $13.6 m (beating the Prospectus forecast by 45 percent). Chairman Chris Beare flagged that: ‘The Board’s priority over the coming year will be to continue to support the management team as they drive the growth of Booktopia. The business has a range of strategies in place to grow and diversify [its] revenue streams while ensuring [it] has the capacity, systems and processes in place to delivery [its] customers the best book buying experience possible.’

Source: Power Retail ASX Listed E-Com Index based on ASX reporting

Given what we’ve seen from MyDeal, Kogan, Booktopia, Temple & Webster and Redbubble, it’s no surprise that the ASX Listed E-Com Index shed 3.9 percent in the last fortnight (compared to the ASX200 which shed 0.7 percent in the same period). Adore Beauty did most of the heavy lifting over this period, closing at $5.01 on Tuesday and growing 7.3 percent in the last week and 8.7 percent over 30 days. While BikeExchange hasn’t yet reached the +$0.20 we were seeing just a few months ago, it closed at $0.18 on Tuesday representing growth of 5.9 percent in the last week. Cettire also recorded 3.8 percent growth over seven days and 10.3 percent over the last fortnight, closing at $3.52 on Tuesday. This value means it has jumped a massive 74.3 percent over 90 days, yet this is related to its recovery from the massive dip we saw back in June when questions were raised about its supply chain. It’s fair to say that given its current share price, investors are once again confident in Cettire’s business model.

With vaccination rates up and states opening up both borders for travel and physical retail stores, what does this mean for ASX-Listed E-Com companies? At the moment, investors seem wary (despite a clear indication that the consumers the pandemic pushed online are here to stay). Will November sales events and Christmas purchasing behaviour lead to a rebound effect on the ASX? Or is the move away from e-com a sign of the times?

Figures are current as at close of ASX on 2 November 2021. This is analysis only and not intended as investment advice.

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