THE YIELD: Do Listed E-Commerce Companies Measure Up?

Given the e-commerce boom and focus on digital, it may come as a surprise that many ASX-listed e-commerce companies are underperforming compared to the ASX 200. In fact, over the last 90 days, share prices for the ASX 200 have grown an average 4.4%. You could be forgiven for assuming that recent events (a lockdown landscape and general reliance on digital) would lead to a similar uptick in e-commerce shares. Yet over the same 90 day period, the Australian Listed E-Com Index has lost 10% of its share price value. 

Redbubble shares have dropped a massive 40.8% over 90 days and MyDeal has dropped by 23.2%. But these noticeable dips is where the similarity ends. MyDeal seems to be back in favour with investors, growing 24.6% over the last fortnight, closing out on Tuesday at 71 cents. Redbubble, on the other hand, lost 4.2% of its share price in the same period, closing out at $3.45 on Tuesday. Last week, MyDeal announced it had delivered gross sales of $218.1 million for the 2021 financial year, up 111.1% on the prior year. Private label experienced ‘significant momentum’, with $8.8 million in gross sales for FY21. Will it be able to maintain its share price momentum? What will it take for the Redbubble tide to turn? (Yet as we enter financial reporting periods, that question is fairly rhetorical.)

So, who was ahead of the -10% e-commerce average over 90 days? Adore Beauty shares experienced 4.2% growth and Booktopia 7.8%, neither of which are earth-shattering, but still impressive given the state of play. Cettire, on the other hand, recorded a huge 41.3% growth over 90 days, but couldn’t maintain this over the shorter periods (-10.3% at the 14 day mark and -8.9% in the last week). In contrast, Adore closed out at $5.21 yesterday, lifting its share price and marking 10.4% growth over seven days. 

Kogan’s share price dropped 16.8% over 90 days, well below the average, but experienced some growth at the 30 day mark (3.2%) and then another dip (-12%) at 14 days. If anything, this is reflective of an uncertain investor market waiting for FY21 results. Another e-commerce company in a seeming holding pattern is Temple & Webster, losing 2% of its share price over 90 days, but growing by 6.2% in the last week. Over the last few months it has continued to dip above and below the ASX 200 average as well as the Australian Listed E-Com Index.

Power Retail Australian Listed E-Comm Index, based on ASX reporting

Shares traded flat this morning, with the ASX 200 showing just 1% share price growth over seven days. The average for e-com in the same period is slightly up, at 3.3% (though this is in stark contrast to its 90 day average which was well below the ASX 200 benchmark). 

We know that e-commerce companies generally are in a strong position, buoyed by consumer confidence and a pandemic related digital push online. The question is whether consumer confidence translates to investor confidence. The reporting period in the coming weeks will surely give things a nudge, one way or another.

Figures are current as at close of ASX on 13 July 2021. This is analysis only and not intended as investment advice.