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Sea Limited American Depositary Shares each representing one Class A (SE)
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Shopify Inc. Class A Subordinate Voting Shares (SHOP)
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MercadoLibre Inc. (MELI)
I can see how SHOP might stand out on the basis of its global reach (i.e., which offsets possible weakness in North America), but have to wonder if, in the new world order, SouthEast Asia is the territory for e-commerce growth; ideas?
We like all three names listed, but we also feel that each name has its own role to play. We feel that Southeast Asia can likely see more e-commerce growth due to a younger, mobile-first generation, and with rising incomes. Latin America also has potential for e-commerce growth.
With that being said, MELI and SE are more of a play on emerging market e-commerce growth, whereas SHOP caters mostly to developed nations.
SHOP is the most expensive of the names, and its recent momentum has not been as strong as SE or MELI, but sales and earnings growth for all three names have been similar in the past year. Forward growth estimates are fairly similar for SHOP and MELI over the next year, while SE is expected to see much stronger earnings growth.
We think that SHOP's relative expansiveness can be explained by its global presence, and its focus on developed nations. For investors that are looking for emerging market exposure, we think that MELI and SE are strong options.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in SE.