E-commerce Stocks Rally as Black Friday Shoppers Drive Record Online Spending

Strong Thanksgiving and Black Friday Online Sales Boost E-commerce Retailers, Propelling Stock Gains

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The Black Friday weekend witnessed a surge in online spending, reaching a record $9.8 billion in the U.S., marking a 7.5% increase from the previous year, according to Adobe Analytics. E-commerce stocks experienced a notable rally on Monday as investors reacted positively to the robust early results. Etsy and Wayfair shares closed up approximately 3% and 7%, respectively, while Amazon’s stock climbed 0.6%. Shopify, a provider of online retail software, saw its shares rise nearly 5% after reporting a record $4.1 billion in merchant sales.

Cyber Weekend, spanning from Black Friday to Cyber Monday, saw online sales increase by 7.7% to $10.3 billion, with Cyber Monday sales expected to reach up to $12.4 billion, making it the largest U.S. online shopping day of the year, as projected by Adobe.

Buy-now-pay-later services, including Affirm, Klarna, and Afterpay, played a significant role in online spending, contributing $5.9 billion between November 1 and November 23, a 13.4% increase from the previous year, according to Adobe. Affirm shares closed up nearly 12% on Monday.

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Budget-conscious consumers, faced with high grocery prices and the resumption of student loan payments, turned to buy-now-pay-later features to stretch their budgets. The National Retail Federation anticipates higher spending this holiday season, projecting a 3% to 4% year-over-year increase in sales for November and December.

New entrants in the e-commerce space, such as TikTok and the Chinese online marketplace Temu, also aimed to capitalize on holiday demand with promotions and discounts. TikTok, through its TikTok Shop storefront, offered free shipping and discounts of 20% to 30% on various items. Temu, known for its bargain basement deals, presented discounts of up to 90% on products across different categories.

As the five-day shopping period from Thanksgiving to Cyber Monday serves as a barometer for the overall holiday shopping season, analysts and investors are closely monitoring the results to gauge consumer spending trends. The resilience of e-commerce, coupled with the popularity of buy-now-pay-later services, indicates a robust start to the holiday shopping season for online retailers.