Clearwater’s Ecommex Index Update – Q3 2013

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With the UK economy growing at its fastest rate in more than three years and rising property prices influencing perceptions of wealth, it is little wonder that consumer confidence is now starting to pick up strongly.

This confidence has fed through to a more positive retail picture as the year has progressed. Although sections of the high street remain distinctly challenging, those stores with a strong multi-channel offering are now reaping the dividends. Last month online retailers in the UK saw their fastest growth for 13 years, according to IMRG and Capgemini, with web sales up 20% year on year in September. Increasing use of smartphones to shop, plus companies such as Asos and Dixons now offering same-day delivery, boosted the data and all the signs point towards another bumper online Christmas.

Such trends are mirrored in our own Ecommex index which measures how pure e-commerce consumer businesses worldwide are performing against more general retailers in terms of their market cap. As you can see from our table, Ecommex has had a very strong 2013, rising 33% over the first three quarters of the year, fractionally behind the FTSE 350 and running ahead of the S&P.

ECommex-graph-Nov-2013

Asos continues to be one of the star online performers here in the UK. Sales for the year ending August 31 rose 39% to £769m and growth accelerated in its final quarter over the Summer, with sales up 46%. Analysts think the company could now break the £1bn sales barrier in the coming year and its shares have more than doubled over the past 12 months.

Our index is still weighted quite strongly towards the US, where lots of e-commerce businesses are listed. Across the pond, the growth of key players has been no less impressive.

In the Summer, Ebay beat analyst expectations with revenue growth of 25% in the second quarter. Its payment business PayPal exceeded 100m active users and revenues exceeded $1bn for the first time. Ebay expects PayPal’s total payment volume on mobile phones to exceed $3bn this year. Meanwhile, online movie business Netflix shares are up by more than 400% this year. Sales in the third quarter came in at $1.1bn as the company reported that it had passed 40m global subscribers and had tripled profits in the quarter: further proof, if it were needed, of the phenomenal growth of today’s online players with market leading positions.