Amazon.com (NASDAQ:AMZN) is one of the biggest technological disruptors of our time. CEO Jeff Bezos may be handing over the reins as CEO, but he’s not going anywhere anytime soon. He’s a visionary, and even the great Warren Buffett admires the man. As Amazon continues spreading its wings over new markets, the incumbent players of said markets have the right to be scared. Look at what the e-commerce kingpin did to the world of retail!
Moving ahead, Amazon is likely to continue building a moat around its e-commerce and cloud offerings. But there are other less obvious markets that Amazon is going after, and they shouldn’t be ignored. Most notably, Amazon is going after the physical realm, and they could be making a huge splash over the next decade, with Amazon Fresh grocery stores and Amazon Go convenience stores.
Canadian companies disrupting the disruptor that is Amazon
Without further ado, let’s have a look at two top Canadian companies that I believe could give Amazon a good run for their money, as the ruthless e-commerce retailer looks to cut in on new turf. The first one is already an Amazon competitor in the e-commerce arena, and the second one may surprise you.
Surprise, surprise. We have Canadian e-commerce kingpin Shopify (TSX:SHOP)(NYSE:SHOP), which has been pretty successful in defending its small- and medium-sized business (SMB) turf from Amazon over the years. Shopify carved out a niche in the e-commerce space, and it’s building a pretty sizeable moat around it. Although Shopify’s moat and leadership are respectable, I do think it’s a mistake to underestimate the threat that is Amazon.
Earlier in the year, Amazon announced it acquired one of Shopify’s smaller competitors in Selz. Selz is an Australian e-commerce company that’s in the SMB arena. While the Selz deal went under the radar, I do think the move could pose a threat to Shopify over the coming years.
Whether Shopify can fend off Amazon again is anybody’s guess. I am a fan of Shopify’s managers, and they will not go down without a fight. Moreover, as the firm continues funnelling money into R&D initiatives, I think it’ll be tough, even for Amazon, to catch up to the king of SMB e-commerce.
Alimentation Couche-Tard (TSX:ATD.B) is a convenience store giant that’s not a direct competitor of Amazon today but will probably be one over the next decade, as Amazon.com looks to take over the world of brick-and-mortar retail. Grocery stores are already on alert, with Whole Foods in Amazon’s corner. And convenience stores could find themselves, to a lesser extent, competing with Amazon Fresh and Amazon Go stores.
Couche-Tard recently made headlines with its failed pursuit of grocer Carrefour. The c-store king is getting into big-scale grocery, and that could put it in direct competition with Amazon and its physical push.
Fortunately, Couche-Tard has not been sleeping at the wheel. The company is experimenting with next-gen technologies and has more than enough cash on the sidelines to invest in tech that will be found in the c-stores of the future. As the battle for c-stores and grocers takes it to the next level, I’d look for Couche-Tard to buy a grocery giant, likely in Canada or the U.S., within the next three years.
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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 Joey Frenette owns shares of ALIMENTATION COUCHE-TARD INC and Amazon. David Gardner owns shares of Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC, Amazon, Shopify, and Shopify and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.