STOCK WATCH: What Does a Roadmap Mean for ASX E-Com Performance?

Both NSW and Victoria have revealed their roadmap for easing restrictions and ending lockdown. With retail stores able to reopen before Christmas, what does this mean for the value of e-commerce listed ASX companies?

The average of the Australian Listed E-Com Index is still well above the above ASX-200, though the gap is closing slightly. Last week we reported that the Australian Listed E-Com Index grew an average of 13.5% over 90 days compared to the ASX-200 which grew only 0.7% in the same period. Now, the ASX E-Com Index has recorded 9.6% growth over three months, while the ASX-200 has shed 1.6%.

In the shorter term, the results are reversed. The ASX-200 shed 2.4% in the last week, while the ASX Listed E-Com Index shed 3.5%. Are investors losing confidence now that the path to Christmas is looking more clear?

While in-store retail may be opening up, the upcoming December quarter is forecast to be the biggest online shopping quarter on record.

Source: Australian Listed E-Commerce Index based on ASX reporting

Previously consistent Bike Exchange has been underperforming on the ASX, shedding a massive 28% over 90 days. Yet there does seem to be signs of recovery. Closing out at $0.18 on Monday, it has recorded an impressive 16.1% growth over the last week. As we head into the next quarter, we’d hope to see a share price of $0.20+, which is what we had been seeing through most of the last three months. The next few weeks will be interesting to watch.

While Kogan’s post-reporting slump was expected to rectify itself, this hasn’t quite eventuated. It closed out at $9.45 on Monday, marking a 13.7% loss in share price value over three months. As we head into Christmas and the peak electronics purchase period, will we see $13+ share price value again?

We’ve seen both Adore and Booktopia shares remain steady over the last few months, and again this week, we’re not seeing massive swings one way or another. Closing out at $4.58 on Monday, Adore has recorded 2.2% growth over 90 days, while Booktopia’s $2.72 marks 4.6% growth over the same period.

Cettire, MyDeal, Redbubble and Temple & Webster all recorded impressive growth over 90 days. Cettire’s 54% growth (closing out at $3.60 on Monday) was the stand-out, but 25.3% from Temple & Webster is noteworthy, opening at $12.81 on Tuesday. But even with both MyDeal and Redbubble recording around 20%+ growth in a similar period, this doesn’t necessarily tell the whole story. Looking shorter term, MyDeal, Redbubble and even industry favourite Temple & Webster all shed between 1.3% – 1.5% in the last week. Even Cettire’s growth of 4.7% is minimal compared to the double digit growth we were seeing. So, are things slowing in the lead up to Christmas? Are investors concerned that brick and mortar retail in November onwards will claw back online retail’s grip on consumers?

We’ve seen that throughout the rolling lockdowns over the last (almost) two years, consumer behaviour has been permanently changed. Shoppers are heading online and staying online. While retail doors opening will mark yet another evolution of retail as we explore what the post-lockdown landscape looks like, reliance on e-commerce should not be viewed as something that was merely reactive or short-term response. While how investors respond now will be telling, it looks like we’re in for a rollercoaster few months. Will we look back in twelve months and gasp at how undervalued e-com was?

Figures are current as at close of ASX on 20 September 2021. This is analysis only and not intended as investment advice.

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