The stocks of e-commerce companies surged following the record online spending by Black Friday shoppers


The stocks of e-commerce companies surged following the record online spending by Black Friday shoppers On Thanksgiving and throughout the Black Friday weekend, shoppers came out in large numbers, mostly avoiding physical stores in favor of the convenience of online shopping from their own sofas.

Online spending on Black Friday in the U.S. hit a new high of $9.8 billion, marking a 7.5% increase from the previous year, as reported by Adobe Analytics. Additionally, online sales over Cyber Weekend, spanning from Black Friday to Cyber Monday, saw a 7.7% jump, reaching $10.3 billion. It is anticipated that Cyber Monday sales could reach a whopping $12.4 billion, establishing it as the largest online shopping day of the year in the United States, according to Adobe.

The impressive performance was a great benefit for numerous e-commerce retailers, leading to a surge in their stocks on Monday as investors celebrated the promising early results. Etsy and Wayfair saw their shares close up by about 3% and 7% respectively, while Amazon's stock rose by 0.6%. In addition, Shopify's shares increased by almost 5% in afternoon trading after the company, which offers software for online retailers, announced that merchants achieved a record $4.1 billion in sales.

Analysts and investors are paying close attention to the sales performance during the five-day period from Thanksgiving Day to Cyber Monday, using it as an indicator for the overall holiday shopping season. The National Retail Federation anticipates that shoppers will spend more this year compared to the previous year, with sales in November and December expected to increase by 3% to 4% year-over-year. Despite a decrease in inflation, grocery prices remain high, and the restarting of student loan payments has impacted some consumers' holiday spending budgets.

Against this background, cost-conscious consumers have resorted to utilizing buy-now-pay-later options in order to make their money go further. Providers of buy-now-pay-later services like Affirm, Klarna, and Afterpay generated $5.9 billion in online spending between November 1 and November 23, marking a 13.4% increase from the previous year, as reported by Adobe. On Monday, shares of Affirm rose by nearly 12%.

In an interview on CNBC's "The Exchange," Klarna CEO Sebastian Siemiatkowski expressed surprise at the strong performance of buy-now-pay-later services during Black Friday. He noted that both buy-now-pay-later services and Klarna itself have gained significant market share, with more merchants offering the service and more consumers choosing it.

Additionally, new entrants in e-commerce, such as TikTok and the Chinese online marketplace Temu, seized the opportunity to capitalize on holiday demand by offering heavy promotions. TikTok's TikTok Shop storefront in the U.S. provided free shipping and discounts of 20% to 30% on a wide range of items, while Temu offered Black Friday and Cyber Monday deals with discounts of up to 90% on various products. These discounts included a "Cyber Week Clearance" starting at 39 cents and significant price reductions on items such as a plastic rice washing bowl.

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