E-commerce is not a new trend but one that has been slowly growing over the years. And, for the most part, most TSX stocks that are exposed to e-commerce have been top stock performers.
While that trend will continue to grow slowly, in the short term, we are seeing a temporary increase to the pace at which consumers shop online.
This is not surprising at all, given the economic shutdowns limiting transactions at brick-and-mortar stores.
However, it once again goes to show the e-commerce trend is not going away. As more and more merchants and consumers adopt e-commerce, the industry will see faster scale.
This scale will see lower delivery times and better overall logistics. And these developments should increase consumers’ willingness to buy online, creating a rapid cycle of growth in the industry.
E-commerce is one of the best growth trends of the 21st century that you won’t want to miss. Here are three top TSX stocks to play the growing online shopping trend.
TSX tech stock
One of the biggest developments in the e-commerce industry was the design and introduction of specific shopping platforms, where merchants can go to sell their goods.
Having a good platform and high-quality infrastructure makes life easier for merchants. This incentivizes more companies to sell their products online, which, in turn, will send more consumers online.
Shopify’s platform helps merchants with everything from inventory management, social media advertising, and more.
So, the development of Shopify’s platform will not only make the company stronger, but it will help the entire industry grow.
This puts Shopify at the centre of e-commerce and one of the most important TSX stocks in the industry. So, if you are betting on the popularity of e-commerce to continue growing, you can’t go wrong owning a stock like Shopify.
TSX transportation stock
Another critical aspect of the online shopping industry is logistics and transportation. That’s where a top growth stock like Cargojet (TSX:CJT) comes in.
Cargojet is responsible for the majority of overnight, time-sensitive shipping in Canada. The company even has major agreements with Amazon.
Part of the reason consumers may choose to forgo online shopping is if the wait times to receive the products are too long. So, sellers must have access to transportation that can get items to consumers rapidly.
Cargojet has always been key to this industry. This makes an investment in Cargojet a great way to gain exposure to the long-term growth.
Even during this crisis, the stock was initially sold off as the market crash. However, soon after, the stock was bid up rapidly, as investors realized this could have a major positive impact on the company.
Plus, at a time when fuel, one of the biggest costs of airlines, just became a lot cheaper, Cargojet is poised to see some rapid growth in profitability.
TSX real estate stock
The last stock to consider is a stock in the real estate industry. Although e-commerce has had a huge negative impact on retail stocks and, therefore, retail REITs, the one thing that it’s done is increase the demand for warehouses.
This makes high-quality industrial REITs such as Granite REIT (TSX:GRT.UN) great long-term investments.
Retailers and merchants increasingly need somewhere to store inventory. Especially if they are cutting down on the number of stores they own.
Warehouses are increasingly seeing demand for their space. The demand is so strong that Granite has already renewed 80% of the leases that were set to expire this year. Plus, it’s done so at an average rent increase of 7.4%.
Granite is a slightly different stock than Cargojet and Shopify. While it’s still exposed to the growth in the sector, investors will likely see their gains through increased dividends as opposed to solely capital gains.
This way, investors can set themselves up a growing passive-income stream, which will continue to increase as Granite’s operations expand.
E-commerce will continue to grow in popularity. So, if you want to gain some exposure to the next big growth trend, these are the top TSX stocks to buy.
In addition to these high-quality growth stocks, don't miss out on these three stocks set for major gains.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Amazon, CARGOJET INC., Shopify, and Shopify and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.