Last weekend, online shopping appeared to hit its Tipping Point moment.
Cyber Monday, a term and concept invented by the National Retail Federation in 2005, has caught on. With sales in excess of $1 billion, 2010’s Cyber Monday was the heaviest day ever for online spending. And Cyber Monday 2011 online sales beat those numbers handily, up more than were up 33 percent over the year prior.
According to IBM, during the recent Black Friday to Cyber Monday shopping frenzy, spending via mobile devices more than tripled in the U.S., reaching as high as 9.8% of total sales for Black Friday. And eMarketer is now predicting that online spending will hit $50 billion in 2015, nearly double 2010’s number. So who stands to benefit from this trend? In wholly different ways, A few Canadian tech stocks appear to be locked into the sweet spot of online spending.
1. Descartes Systems Group (TSX:DSG)
More things shipped means more business for Waterloo’s Descartes Systems. After nearly becoming a dot-bomb casualty, former Gartner analyst Art Mesher rescued Descartes, which he estimated was days away from folding. The company has since become an emerging leader in global logistics technology; solutions that help its customers make and receive shipments.
Descartes now finds itself at the cutting edge of a trend; across the globe governments are looking to untangle and standardize their logistics operations. An increasing amount of evidence suggests a clear link between logistics performance and economics growth. The World Bank’s Logistics Performance Index showed that low and middle income countries such as Brazil and Columbia have given their economies a shot in the arm through improved logistics, while other emerging economies, such as Turkey, have been hurt by a lack of logistics infrastructure.
With a push for improved logistics from worldwide governments, and more items being shipped due to a rise in online spending, Descartes is poised to benefit from intercepting trends.
This story is brought to you by Cantech Letter sponsor Verisante (TSXV:VRS). Verisante just received Health Canada approval for Aura™, the company’s skin cancer detection device. Click here for more information.
2. Selectcore (TSXV:SCG)
Primarily through selling prepaid wireless cards, Vaughan, Ontario’s Selectcore has grown its revenue from $37 million in fiscal 2006 to over $103 million in 2010. The prepaid wireless market is a good place to be. Telecom industry research firm Atlantic ACM estimates that this sector will grow from $19.3 billion in 2010 to $25.3 billion by 2015.
But the numbers on prepaid wireless are dwarfed by the size of the prepaid credit card market. An independent research report commissioned by MasterCard estimates that market will surpass $440 billion by 2017, which is more than four times its estimated 2009 value of $120.2 billion Selectcore’s Iridium joins the company’s other financial offering; ReCash, a voucher that can be loaded with cash and transferred instantly to another customer’s card via text message, online or by dialing a toll-free number.
Selectcore’s new product offering mean the online market can tap the potential of the unbanked. The Federal Deposit Insurance Corporation estimates that 7.7 percent of US households don’t have a checking or savings account, and another 17.9% are underbanked; relying on payday loans and pawn shops, and unfavorable lenders.
3. Mediagrif (TSX:MDF)
[polldaddy poll=5719938]Little by little, The ease and convenience we experience when buying khakis from LL Bean or an audio book from Amazon is filtering into the enterprise. Large network administrators are clearly finding that the level of comfort they feel when making personal purchases should extend to the experience when they buy, for instance, five-thousand cases of wine or bid on a government construction contract.
Quebec’s MediaGrif provides the technology behind online marketplaces. The Company has built such forums for the automotive industry (Truck Parts Locator) , for the wine and spirits business (Global Wine and Spirits) and for the diamonds and jewelery business (Polygon). Earlier this month, Mediagrif dipped a toe into the retail side of e-commerce when it acquired LesPAC Inc. from Yellow Media. With more than three-quarters of a million members, the site is the top online destination for classified ads in Quebec.