CHICAGO, July 7, 2014 /PRNewswire/ --Today, Zacks Equity Research discusses the eCommerce, including Priceline (Nasdaq:PCLN-Free Report), Expedia (Nasdaq:EXPE-Free Report), Orbitz Worldwide (NYSE:OWW-Free Report), TripAdvisor (Nasdaq:TRIP-Free Report) and Qunar (Nasdaq:QUNR-Free Report).
Industry: eCommerce
Link: http://www.zacks.com/commentary/33270/e-commerce-stocks-on-which-to-click-pt-2
Although retail ecommerce is the segment that most of us are interested in, it is in fact just a part of the overall ecommerce market. Retailers and service providers generate just 5.2% and 3.1%, respectively of their revenues online, a slightly higher percentage than they did in the prior year. The U.S. Census Bureau categorizes these two segments as business-to-consumer.
According to the U.S. Census Bureau, the manufacturing sector is the most reliant on e-commerce sales (51.9% of their total shipments), followed by merchant wholesalers (26.4% of their total sales). These two segments make up the business-to-business category.
The latest numbers from the Bureau suggest that growth rates across all segments were similar with services being just a bit slower. [All the above data from the U.S. Census Bureau relate to 2012, as published in May 2014.]
The industry is evolving very rapidly, so data collection and evaluation are particularly difficult. Consequently, one has to rely largely on surveys by both government and private agencies.
In this section, we will discuss segments of the ecommerce market than do not relate directly to the retail of goods, and focus instead on travel, payments, security and advertising.
Travel
The U.S. Commerce Department expects international travel to the U.S. to continue increasing over the next few years. Visitor volume is currently expected to increase 3.7-4.2% a year from 2013 to 2017 leading to a 26% increase in the number of users by 2018. Visitors from the Caribbean are expected to be the slowest-growing (1%). The Middle East, Asia and South America are expected to grow 67%, 60% and 52%, respectively.
The fastest growth is expected to come from China (229%), Saudi Arabia (191%), Russian Federation (79%), Brazil (66%), Argentina (65%) and Columbia (54%).
The Travel and Tourism industry remains one of the country's strongest industries, although the first quarter of 2014 did not go that well. According to the BEA, the industry declined 1.0% in the quarter, better than the real GDP decline of 2.9% (in the fourth quarter of 2013 it grew 4.5% compared to GDP growth of 2.6%). The recreation and entertainment segment was the main driver of weakness, declining 11.2% in the quarter (compared to a 0.9% increase in the previous quarter).
Food services and drinking places also contributed with a 3.5% decline (compared to a 7.4% increase in the previous quarter). Accommodation prices went up 13.2% while passenger air transportation prices dropped 5.5%. They were down 8.0% and 7.0%, respectively in the previous quarter.
The top travel booking sites are Booking.com, Expedia.com, Hotels.com, Priceline.com, Kayak.com (acquired by Priceline), Travelocity.com, Orbitz.com and Hotwire.com. Since Booking.com and Kayak are part of Priceline (Nasdaq:PCLN-Free Report) and both Hotels.com and Hotwire.com part of Expedia (Nasdaq:EXPE-Free Report), this narrows down the top companies in the segment to Priceline, Expedia, Orbitz Worldwide (NYSE:OWW-Free Report) and Travelocity. However, there are several others worth considering that include TripAdvisor (Nasdaq:TRIP-Free Report), which was spun off from Expedia, and Qunar (Nasdaq:QUNR-Free Report), which recently had its IPO.
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