Amazon.com, Inc. (AMZN), the giant e-marketer, the third-largest digital advertisement seller seems to be on the way of making it to the top. The Q1 advertising revenue, although not specifically mentioned in the annual reports, stood at $2.72 billion.
There has been a 36% increase in the income generated through these ad services from the previous year. However, the growth rate seems to be increasing at a diminishing rate, with last year’s quarterly growth figuring to 95% to 138% and revenues 57% more than that in 2016. But, the declining growth rate does not imply that the market might fall for Amazon.
Tough Competition For Google And Facebook
While on one hand, the Amazon ad-biz is soaring high, the same cannot be said for Google (GOOG). The company along with Alphabet, its parent, saw its all-time low growth rate of 15% in 2019 Q1 since 2016. This might be a result of Amazon’s expanding market share. Even though Amazon still holds little market share as compared to the top-two giants – Google and Facebook (FB) – but, it seems to be gaining a popular reputation among the CPG retailers. With more and more retailers keeping an increased budget for advertising with Amazon, things sure are looking bright for the company.
With Amazon being a shopping site as well, the consumers find it quicker and easier to search for the desired product and buy it on just a few clicks, even less with saved bank account details. Not to forget the exceptional heavy discounts and offers provided by Amazon, sparsely luring in customers. These incline retailers all the more to advertise their products on Amazon.
The Digital Age
The Amazon advertisement business seems to be quite appealing in today’s digitalization age. Google and Facebook are at the risk of losing their business to this giant. But, this does not mean that Google is at a stance of losing its prime position. Google, with its large customer base, unlike Amazon, incorporates not only a few select retailers but other business scopes as well, like that of financial service providers, realtors, etc. This puts Google a step ahead of Amazon, making it unlikely to be overthrown by the latter.
Facebook, on the other hand, has little to worry about. Its advertising model is quite different than that of Amazon or Google, which has a search-based model. Facebook takes into account the demographics, interests and online habits of its users offering them a wider range of advertisers. But, the biggest threat looms over the traditional advertisement media which might go extinct in time.
Is The Road Ahead Sweet For Starbucks Stock Price?
Starbucks stock price delivered a total return of 170% over the past five years. That’s thanks to the opening of new stores and increased sales at the existing ones. The future of the company doesn’t seem disappointing either with plans of expansion in China and digital initiatives.
Even though the US has been the largest market for Starbucks along with being the most profitable one as well, the growth in the market is little. The company is thus looking at other markets – China to be specific- for its primary growth driver. The market in China remains unexplored with most of its 1.4 billion population drinking tea.
With the view that China grows to a larger market than the US market, Starbucks is opening restaurants in the country at a pace considered aggressive. We’re talking 600 stores annually or one store every 15 hours. The company, however, faces tough competition in the Chinese market from Luckin Coffee which is the country’s famous coffee chain.
Who Could Profit From Starbucks Growth?
There’s no question about it when companies like this grow, there’s likely opportunity for others to capitalize. But when it comes to coffee, besides the bean growers, who might benefit from growth like this? Well, think about how you get your coffee.
Do you go to Starbucks every day or….by chance…do you get delivery? Chances are you’re like me and have yours delivered. Where many of the on-demand delivery companies like DoorDash or Postmates aren’t currently public, there are some companies to pay attention to.
Uber, unfortunately, may be on the backburner for now. The company has leveraged multiple operating arms and recent financials weren’t promising. Companies that “stay in their lane” have become a focus. Grubhub (GRUB) for example, has held a near 100% increase in share price from just 5 years ago. At one point, GrubHub stock price skyrocketed to highs of nearly $150 a share.
But that was then and this is now. Other companies are taking a lean approach while also extending their businesses to benefit from the likes of Amazon and others. ParcelPal Technology (PTNYF) (PKG) is one of these companies and it’s trading at a fraction of GRUB, UBER, and other delivery stocks.
ParcelPal (PTNYF) (PKG) created an on-demand marketplace where customers can shop for anything from food to clothes. There is no more waiting in line for lunch or rushing to the store after work to grab your clothes. With ParcelPal on-demand, customers simply shop from the app, choose the items they want, and pay.
As the marijuana industry evolves, new opportunities have come about. One of the bigger deals closed in 2019 was between ParcelPal (PTNYF) (PKG) and Yield Growth! The deals form an alliance between the two companies for same-day and on-demand delivery, sale, of hemp-based cosmetics from Yield Growth’s subsidiary Urban Juve in Canada.
Urban Juve hemp products currently sell in over 90 locations including well-known pharmacy chains across North America, with a plan to expand that to 130 retail outlets in the near future.
Customers will be able to track their purchase in real-time and have their product delivered to any location they specify. As time and regulations allow, ParcelPal’s cannabis network will continue to grow, with the goal of capturing a major piece of Canada’s $5.2 B legal cannabis market.
Does The Next Half Decade Map Out Profitably For Starbucks?
Growth like this could open opportunities for continued success for not only Starbucks but the ancillary companies that can take advantage of this growth. By the end of Q3, the total number of Starbucks’ stores in China reported an increase of 16% year-over-year to 3,900 locations, while the comparable store-sales increased by 6%.
These figures imply the company’s expansion of store base as well as consistent sales production in the existing ones. Forecasts suggest that there would be more 3,000 new stores in China by the next five years, provided things continue to go as smoothly.
The digital initiatives taken by Starbucks are also proving to e quite profitable. In Q3, the active members for the company’s reward program in the US increased 14% year-over-year to 17.2 million members. The company’s digital loyalty program is also helping boost the sales not only in the US but also in China which now has active rewards members to the count of 9 million. The 9 million members are a year-over-year increase of 36%.
The coffee giant further expanded its partnership with Uber Eats with the aim of rolling out delivery throughout the US. For delivery services in China, the company has a partnership with Chinese e-commerce giant Alibaba that has successfully covered 2,900 of Starbucks’ stores across 80 cities in the country. The deliver sales are reported to contribute 6% of the company’s total sales in China in Q3 andy the figure is set to rise in the future.
ROKU Stock Price Hits Another All-Time High On Earnings Optimism
Video streaming platform Roku Inc (ROKU Stock Chart) has grown at an impressive pace in 2019. The Roku stock price has had a highly impressive run this year so far. The company’s financial results in Q2 2019 proved to be yet another smashing quarter and naturally, the stock gained.
The stock has gone up as much as fourfold in 2019 alone; however, there are experts who believe that this could just be the start of the company’s rise. Here are the three factors that indicate that there could be much more upside in the Roku stock from current levels.
First and foremost, the number of accounts in the Roku platform is growing at a highly impressive rate. At this point in time, the company boasts of 30.5 million accounts which are active and that reflects a 39% rise from 2018. Moreover, the users are spending more and more time on Roku.
More than 9 billion hours of content was streamed on the platform and that is a whopping 72% year on year rise in that particular metric. The average revenue per user is also by as much as 27% year on year.
Roku has gone public only two years ago but in the meantime, it has managed to shed its dependence on device sales, which does not generate much profit. Instead, it concentrated more on its streaming platform. The platform is definitely high margin and its revenues grew by as much as 86%. The platform revenues are ultimately the driving force behind the growth of the stock.
Device sales rose by 24%. Last but not least, Roku now finds itself in the middle of a streaming revolution and remains brilliantly placed to use it to its advantage. More and more media companies are now launching their own streaming platforms and that means more use of the Roku platform in the years to come. It is not for nothing that experts feel that this is merely the start for Roku.
Does The Future For Shopify Stock Price Look Bright?
Shopify Inc (SHOP Stock Price) has managed to keep its position as the leading company in multi-channel commerce platform for entrepreneurs worldwide. One of the best investment choices, the share price saw a rise of over 900% over the past three years.
In 2012 the company had revenue of just $24 million. The number of sales by the merchandise available on the platform (known as Gross Merchandise Volume) annually accounted for $700 million. By 2018 the company had managed to increase its top-line by 4,400% to $1.1 billion and the GMV had also surged to $41 billion.
Stocks Trading At Premium, Worth An Investment?
Over 5% of all retail e-commerce sales in the US is facilitated by Shopify, larger parts are contributed by Amazon and eBay. Shopify accommodates more than 800,000 businesses, providing them basic tools for selling goods online at a monthly cost of $9. The company also allows its clients to build fully functional online stores at a monthly charge of $29.
Other facilities and tools provided by Shopify include point-of-sales systems for physical retail stores, payment processing facilities, shipping facilities, and working capital loans facilities. It has added various other services with time and consequently become a key partner of several hundreds of businesses.
Interestingly, the giant still has massive scope for expanding its business. The small businesses have a market worth over $70 billion, while Shopify manages to address over $1 billion last year, indicating huge room for growth. The big businesses, on the other hand, look at joining hands with Shopify especially for the wide range of services provided by Shopify Plus which charges over $2000 or more monthly.
ParcelPal (PKG.CN) (PTNYF) & Shopify (SHOP) Integration Opening Big Doors For Cannabis In Canada
Originally scooped by Benzinga (see: Scoop: Shopify And ParcelPal To Integrate For Cannabis Delivery In Canada), ParcelPal has formally announced that it will be integrating with Shopify to offer cannabis products to customers of Shopify shops. This will be available in Vancouver, Calgary, and Saskatchewan. Customers ordering from Shopify stores in these areas will be able to receive cannabis at their own homes.
“Shopify is the main e-commerce platform in Canada for cannabis. Our integration onto the Shopify platform allows us to easily integrate and begin executing within the space.”ParcelPal’s President and CEO Kelly Abbott told Benzinga
Two of the company’s current clients (Choom Holdings and Kiaro) already have established outlets on the Shopify platform. The move, as the company puts it, will “give them an omnichannel approach to their sales. This will give us access to the recreational and medical market.”
For the full ParcelPal release, Click Here.
The opportunity that ParcelPal (PTNYF) (PKG) may be presenting now draws comparisons to the way early investors had an opportunity with companies like Uber and GrubHub (GRUB) before they went mainstream in the US. GrubHub priced its initial public offering at $26 per share and now trades nearly 5x that price just as this market is beginning to heat up!
The difference with ParcelPal (PTNYF) (PKG) is that it is going directly after the international markets that have very limited access to technology like this right now. But this is just a small piece of a much bigger picture. Want to see how ParcelPal has already been working with one of the biggest online retailers in the world? Yes We’re Talking About Amazon!
The Road Ahead For Shopify
In addition to ParcelPal, Johnson & Johnson (JNJ Stock Price) and Procter & Gamble (PG Stock Price) are a few of the many giants which are clients of Shopify. Moreover, after the announcement of the launch of the new fulfillment network, the opportunity increased even more for Shopify. The company also plans to provide personalized packaging and shipping facilities across the US.
That’s along with the utilization of machine learning so as to optimize inventories and reduce costs of shipment. The personalized packaging feature would help Shopify to stand out. It would also boost competition with companies like Amazon, which market their own brand on third-party shipped packages.
These factors considered, Shopify is in the position to gain increased market share. Shares trade at a premium price which is 30 times the sales of the company. However, that does not classify the stock as an overvalued one, especially with the future looking as bright.
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