A report put out today by Sanford Bernstein analyst Jeffrey Lindsey claims the same disparity in growth between the U.S. and the rest of the world exists in e-commerce as exists in economic growth overall.
Online retail commerce will rise only 14.3% in the U.S. in 2008 (still not a bad showing, I would imagine), but 26.5% overseas, writes Lindsey. That adds up to 21.5% combined, and even if economic growth slows globally, Lindsey expects e-commerce numbers to prove relatively resilient.
In a worse case scenario, where a drop in real U.S. GDP of 1.5% to 1.9% occurs for three to four quarters, Lindsey thinks online retail e-commerce would still increase by 18% this year.
Bear in mind that the overseas markets use e-commerce less, points out Lindsey, so they’re able to grow faster — online makes up only 2.5% of all retail overseas, he says, versus 3.5% in the U.S., which should help overseas outperform U.S. e-commerce for the next 5 years, he predicts.
Other factors of growth include the low but rapidly growing online user base in other countries, and the shift of dollars from offline to online purchasing for furniture, appliances, event ticket sales, electronics and packaged goods, in particular. Lindsey thinks use of broadband wireless on cell phones, moreover, could “cannibalize” a lot of purchasing done via desktop computers, rather than expanding the pie.
In conclusions, Lindsey writes, “Despite expectations of a worsening macro-economic environment and evidence of deceleration of U.S. e-commerce in certain sectors such as personal computers, we continue to believe that the retail e-commerce sector has a very high degree of recession/downturn resistance.” One note of caution: the dollar, if it continues to strengthen, could somewhat crimp overseas online buying.
Lindsey has an Outperform rating on Amazon.com (AMZN) and a price target of $97, and an Outperform rating on Ebay (EBAY), as well, with a price target of $38. Today, Amazon is down 73 cents, or .8%, at $87.30, while eBay is off 28 cents, or 1%, at $26.33.
Online retail commerce will rise only 14.3% in the U.S. in 2008 (still not a bad showing, I would imagine), but 26.5% overseas, writes Lindsey. That adds up to 21.5% combined, and even if economic growth slows globally, Lindsey expects e-commerce numbers to prove relatively resilient.
In a worse case scenario, where a drop in real U.S. GDP of 1.5% to 1.9% occurs for three to four quarters, Lindsey thinks online retail e-commerce would still increase by 18% this year.
Bear in mind that the overseas markets use e-commerce less, points out Lindsey, so they’re able to grow faster — online makes up only 2.5% of all retail overseas, he says, versus 3.5% in the U.S., which should help overseas outperform U.S. e-commerce for the next 5 years, he predicts.
Other factors of growth include the low but rapidly growing online user base in other countries, and the shift of dollars from offline to online purchasing for furniture, appliances, event ticket sales, electronics and packaged goods, in particular. Lindsey thinks use of broadband wireless on cell phones, moreover, could “cannibalize” a lot of purchasing done via desktop computers, rather than expanding the pie.
In conclusions, Lindsey writes, “Despite expectations of a worsening macro-economic environment and evidence of deceleration of U.S. e-commerce in certain sectors such as personal computers, we continue to believe that the retail e-commerce sector has a very high degree of recession/downturn resistance.” One note of caution: the dollar, if it continues to strengthen, could somewhat crimp overseas online buying.
Lindsey has an Outperform rating on Amazon.com (AMZN) and a price target of $97, and an Outperform rating on Ebay (EBAY), as well, with a price target of $38. Today, Amazon is down 73 cents, or .8%, at $87.30, while eBay is off 28 cents, or 1%, at $26.33.
