THE YIELD: Lockdowns and Uplifts. How the ASX is Responding to COVID Fears

We saw the value of ASX-listed e-commerce companies sky-rocket in 2020 pandemic times, as consumer demand surged and digital uptake was propelled forward. Though recent months have had some asking whether this growth was maintainable. As the world reopened and restrictions eased, was it time for e-comm to recalibrate?

Put your mask on and lock your doors, because this week has shown that the e-comm explosion is far from over. 

A few weeks ago we noted that Kogan wasn’t necessarily living up to the listing hype. But just a few back-to-back nation-wide lockdowns later, and it’s already an impressive performer. Kogan had started to gain traction in June after a May slump, and it seems with renewed pandemic anxieties, investors are once again looking towards e-commerce stocks. Kogan shares are up 18.5% over 14 days. Cettire shares are up 25.2% over the same period, some of which may be a post-trading halt stabilisation and some of which may be the COVID-related e-comm tailwind. 

Temple & Webster experienced exponential pandemic growth last year, though this has slowed in recent months. Like its e-comm counterparts, it’s benefiting from the online surge with investors realising time stuck at home = purchases for the home. Over the last fortnight its share price has increased 7.9% closing out on Tuesday at $11.01. Redbubble has grown by 4.7% over the same period. Redbubble shares seemed to have fallen out of favour with investors, steadily dropping from over $5.80 in April down to $3.60 on Tuesday, though this is still growth from earlier in June. As we head to the end of financial year, will the share price continue to lift?

But perhaps the most surprising turn of events is not which ASX-listed e-commerce are performing better in the ‘new normal’ COVID era, but which aren’t. MyDeal hasn’t experienced the same push from lockdown-related announcements, dropping by 9.5% in the last fortnight. Is it because investors are still concerned that it was overvalued at listing? Is it about a wider concern about the viability of its business model? Have other companies like Kogan et. al. just stolen the limelight? 

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

The Power Retail E-Commerce Revenue Index forecast that June would see growth on year-on-year revenue after a May slump. With Delta on the loose, this is only set to boost revenue further. So are investors who may have panicked getting back on the e-comm bandwagon? It may be reactive buy-up because of recent announcements or perhaps investors are looking more at long-term growth and scalability. 

Will share prices continue to grow in direct relationship to COVID numbers, or was this just a short-term boost? ASX-listed e-commerce companies are clearly benefiting from the current landscape, recording an average of 12.8% growth over 30 days compared to their ASX 200 counterparts which recorded 1.7%. The next few weeks will be interesting as Australians battle with yet another step backwards in a pandemic-sense and the release of end of financial year reporting.  

Figures are current as at close of ASX on 29 June 2021. This is analysis only and not intended as investment advice.