Christmas 2020 will be one unlike any other but is set to be a good one for ASX ecommerce stocks.

COVID-19 restrictions have seen people previously hesitant to try shopping online take the plunge out of necessity.

This resulted in a significant ecommerce boom and several ASX stocks becoming multi-baggers.

But this years’ Christmas shopping season looms as a further growth opportunity for online plays. It traditionally kicks off with Black Friday and Cyber Monday – November 27 and 30 respectively; although Single’s Day on November 11 is also a significant event.

Last week Deloitte Access Economics labelled the upcoming shopping season as “the largest eCommerce event in Australian history”.

Deloitte projected it would be worth $4.2 billion more in online spending activity – 25 per cent more than last year.

Mark Harrison, partner and executive director at Pitcher Partners Melbourne agrees.

“I suspect the transition to online shopping by more consumers over the past seven months, and the establishment of a better experience by many retailers will be reflected in strong Single’s Day and Black Friday events this November,” he told Stockhead.

“The offering by retailers is also likely to be more evident as they seek to capture sales that were lost through a disrupted trading year.”


ASX newcomers list in time for the holidays

Since the initial phase of the boom in the June quarter, the ASX’s ecommerce cohort has grown bigger through the recent listings of MyDeal (ASX:MYD) and Zebit (ASX:ZBT).

MyDeal experienced a boom long before its listing last week – its active customers has risen 268 per cent. CEO Sean Senvirtne is tipping that to grow further.

“We expect and are preparing for this year’s Christmas trading period to be a record for the MyDeal business,” he told Stockhead.

“We believe that [ecommerce] adoption may be further accelerated during the Christmas trading period, with consumers opting to avoid large crowds at shopping centres and instead choosing to shop online safely and conveniently from home,” he said.

Meanwhile, Zebit told shareholders in its prospectus its IPO proceeds would help it accelerate investment in customer acquisition ahead of the Christmas season.

It is forecasting 65.7 per cent of its annual revenue to come in the second half of the year.

While shareholders would have been disappointed with its debut, where it fell over 25 per cent, CEO Marc Schneider told Stockhead he was undeterred.

“Fluctuations happen in every market,” he said.

“We continue to support the Prospectus we outlined for the market and are now focused on executing our plan into Q4.”

MyDeal (ASX:MYD) and Zebit (ASX:ZBT) share price chart


Established stocks dreaming of a hot Christmas

Several other ASX ecommerce stocks expect Christmas to be a cracker for them.

Furniture retailer Nick Scali (ASX:NCK) is vehemently optimistic about Christmas – yesterday tipping a half year profit 70-80 per cent above last year. Only a few weeks ago it tipped 50-60 per cent growth.

It also noted that online sales had spike by 47 per cent in the first quarter of FY21, although this didn’t completely mitigate the impact of store closures in Melbourne & Auckland.

Temple & Webster (ASX:TPW) is one stock you could argue Christmas has come early for.

Last week it revealed its revenue in FY21 to date was up 138 per cent. Chairman Mark Coulter labelled the result pleasing considering it is only just entering its peak trading months now.

Adairs (ASX:ADH), which gave an update yesterday, was more cautious. It only went so far as to say the November/December trading period would be key for the company.

Nonetheless, FY21 had begun on a good note for Adairs. Its total sales rose 22 per cent and online sales represented 41 per cent of sales.

Nick Scali, Temple & Webster and Adairs are up 36 per cent, 375 per cent and 102 per cent in 12 months respectively.

Nick Scali (ASX:NCK), Temple and Webster (ASX:TPW) and Adairs (ASX:ADH) share price chart


Potential downsides

However it goes without saying the ecommerce boom this Christmas isn’t a guarantee.

It will be subject, of course, to Australia keeping infections under control and consumers regaining their mojo.

One company is kitchen appliance wholesaler Shriro (ASX:SHM). CEO Tim Hargreaves told shareholders yesterday he was “cautiously optimistic” for growth.

Speaking with Stockhead, he admitted it could be a bad Christmas if Australia saw a “third wave” of COVID-19.

“The caution remains around the consumer Christmas buying sentiment generally around COVID-19 and possible further implications of potential further outbreaks and potential economic ramifications,” he said.

But Hargreaves does expect the shift to online sales to continue in any event.

“Yes, [we expect] more of shift and growth of revenues via online channels, of course more in some categories such as watches and less so in products such as cooking appliances,” he said.

Pitcher Partners’ Harrison told Stockhead any ecommerce boom may need to battle low consumer confidence despite being Christmas.

“How much the average consumer is prepared to spend, rather than save, is yet to be seen,” he said.

“Offsetting this will be the substitution effect, with no overseas travel, and forced saving over recent months, consumers may be prepared to still spend.”