The global retail market value will reach about $ 25 trillion in 2021, but only $ 4.9 trillion, of which about 20%, will be online sales. Retail is gradually moving online, and emerging markets could be a huge investment opportunity as they follow developed countries online.
Investors might well consider adding some exposure to their portfolios, and these three international stocks could do the trick.
1. DLocal: manage payments in emerging markets
Traders want to do business in emerging markets, but it is not easy as there are many payment methods. Emerging markets are very fragmented; each country has its currencies, banks, credit card providers, etc. It’s complicated for a trader like Amazon to process and manage all those small moving parts of the global payment system.
DLocal Limited (NASDAQ: DLO) is an “all-in-one” payment platform that enables payments to be received and sent between merchants and consumers in emerging markets such as Latin America, Africa and Asia, all in local currency. So, for example, a company like Uber, based in the United States, could send a payment to a driver in Bangladesh, depositing the payment in the driver’s local currency and into the driver’s local bank account using DLocal’s platform.
DLocal’s software has been immensely popular. The platform has attracted several renowned customers, including Amazon, Uber, Nike, Wix, and over 300 others. The company has released its second quarter 2021 results, its first report since going public in June.
It recorded $ 59 million in revenue, an increase of 186% year-on-year. The company’s net revenue retention rate, a figure that shows how much customers are increasing their spend on the platform, was 196% for the quarter, a very high figure indicating that DLocal’s services deliver value. attractive to its customers.
The company estimates its addressable market to be worth over $ 1,000 billion, so given its $ 2.1 billion payment volume for the first six months of 2021, we’re very early in the potential growth for DLocal.
2. MercadoLibre: an e-commerce titan in Latin America
The digitization of Latin America is still ongoing. At the end of 2020, market research service eMarketer estimated that Latin America would be the fastest growing e-commerce region in the world this year. While 85% of people in the United States have a smartphone these days, only 69% of people in Latin America have one, which will only increase to 80% by 2025.
E-commerce company Free Mercado (NASDAQ: MELI) has been operating in the heart of the region since its founding in 1999. The company is an e-commerce conglomerate that operates a marketplace, logistics segment and payment platform. Consumers can purchase an item, and MercadoLibre will process the order and payment, and fulfill the order.
The company recently released its second quarter 2021 results, and MercadoLibre has sold 245 million items, achieving company-wide revenue of $ 1.7 billion, an increase of 103% compared to 2020. Against the background, the second quarter of 2020 was the culmination of the COVID pandemic, which was a massive catalyst. for e-commerce. The fact that the company is growing at 103% compared to this âhigh barâ shows that MercadoLibre is growing rapidly with strong momentum.
3. Ozon Holdings: a growing e-commerce player in Russia
Russia’s e-commerce market is highly fragmented, despite its large size. With an estimated retail market size of $ 456 billion, only $ 41 billion is e-commerce, and the country’s top three players control less than 30 percent.
Similar to MercadoLibre, Ozon Holdings (NASDAQ: OZON) is an e-commerce marketplace that also offers fintech services, as well as delivery and logistics. It is investing in the development of its order fulfillment network and, by the end of this year, it will have triple the area of ââits distribution center in square feet that it had at the end of 2019.
As the company grows and takes more orders, it may start to take increasing market share due to the fragmented nature of the retail landscape in Russia. In its second quarter 2021 results, Ozon recorded 180% year-over-year order volume growth. Its active customers have grown 80% from 2020 and its seller base has grown 3.5 times over the same period. These jumps in users and order volumes show that Ozon’s growth strategy is working, and it justifies its continued investments in order fulfillment.
This article represents the opinion of the author, who may disagree with the âofficialâ recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.