2 Best E-Commerce Stocks to Ride This Global Trend Higher

Successful investing is all about finding the opportunities hiding in plain sight. And there's no better place to find these opportunities than in the e-commerce sector. I'm going to show you two of the best e-commerce stocks you can buy now, and they aren't what you think...

With a vaccine potentially still months away and many physical stores still closed or limiting their customers, people have continued to turn to the Internet for their retail needs.

This trend is still growing. The Department of Commerce reports that out of roughly $1.3 trillion in retails sales in the second quarter of 2020, $211 billion was e-commerce. That is 16.1% of total retail sales, up 36.44% quarter over quarter and up almost 50% in one year on a percentage basis. That's a lot of new business coming in for companies like Amazon.com Inc. (NASDAQ: AMZN), Shopify Inc. (NYSE: SHOP), and Walmart Inc. (NYSE: WMT). These days you can get anything online, from a car at Carvana Co. (NYSE: CVNA), to pet food at Chewy Inc. (NYSE: CHWY), to groceries from Instacart, Amazon, or Peapod.

This isn't going away either. While people will no doubt return to physical retail, a fundamental change has happened in the way people shop, and that will last forever. For me, I've found grocery delivery to be much easier than going to the grocery store. Even buying a new chair from Wayfair Inc. (NYSE: W) using its augmented reality technology was a very pleasant experience.

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But these are the first companies you think of when you think of e-commerce. That means every other investor has thought of them too.

What I'm going to show you are the real opportunities in this trend, because it's going global...

The Best E-Commerce Stocks Are Still Under the Radar

You see, the United States isn't the only place seeing big gains in e-commerce. I'm going to share with you two companies that I've been keeping a close eye on that still have plenty of room to run higher.

I first wrote about a company that I believe is the Amazon of Latin America back in June, and I'm still just as excited about this company today. It continues to target a population that is double that of the United States. The company is MercadoLibre Inc. (NASDAQ: MELI), and since I first discussed it here on Money Morning in June, it is up more than 20%.

But if you think you've missed the biggest gains, think again.

It has plenty of room to continue to grow, and just like Amazon, it has created an ecosystem of services. Not only does it have the top e-commerce platform in Latin America, but it also provides logistics, payments, credit, and advertising.

If last quarter is any indication, MercadoLibre has really started to show its strength with 61.1% revenue growth year over year (YoY). This was led by gross merchandise value (GMV) being up over 100% and a 43% increase in unique active users during the quarter, up from 30% in the first quarter. On top of that, MercadoLibre saw an incredible amount of growth in new users at 75% YoY, giving validation to the platform and giving it a new base for growth, especially as customers are buying more and more online.

Not only e-commerce, its payments business now has 52 million payers using Mercado Pago, which grew 64% YoY. MercadoLibre has built the critical building blocks for e-commerce and should continue to execute over its competitors.

And that's not the only e-commerce stock I like.

Like Amazon and MercadoLibre, one of my favorite growth stories is also an e-commerce play and one that is tapping into the Southeast Asia market. I wrote about Sea Ltd. (NYSE: SE) back in July and how it is tapping into 300% industry growth, and it has not disappointed.

With stellar earnings this week, it is now up over 250% this year and hitting all-time highs. Overall adjusted revenue was up 93.4% YoY, and gross profit was up 106.1% YoY. Sea is in the midst of a major transition. While its digital entertainment business helped to support its e-commerce division, it has grown far past that with its e-commerce revenue up 187.7% YoY.

In Indonesia, where Shopee is the largest e-commerce platform, it finished the quarter with 260 million orders and ranked first in the country by average monthly active users and downloads according to App Annie. Sea also performed well in many of its other markets. Shopee ranked No. 1 in the shopping category on App Annie in Southeast Asia and Taiwan.

Sea has also created an ecosystem and saw accelerated growth in adoption of its SeaMoney offerings. Its mobile wallet services surpassed 15 million users, and payment volume was over $1.6 billion.

A significant change has happened with consumer behavior over the last six months, and while the trend toward e-commerce may slow down a bit as pandemic restrictions ease and a vaccine is distributed, the fact is that e-commerce has improved lives for millions of people and should continue to grow.

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