With the rout in global equity markets at the start of the year, we find much of Morningstar’s global e-commerce coverage universe–home to some of the widest economic moats in the consumer space–trading at significant discounts to our fair value estimates. While we acknowledge the possibility of more pronounced economic headwinds facing consumers across the globe in 2016 and the implications for discretionary consumer spending, we believe the market is overlooking the powerful network effect that many of these companies have developed over the past several years, not to mention a host of other leading players in more nascent e-commerce markets that are successfully bridging the transition to a business-to-consumer from consumer-to-consumer marketplace through enhanced payment, financing, logistics, and branded store offerings.
