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However, with significant progress on the vaccination front and the consequent easing of social distancing restrictions, brick and mortar stores have been seeing rising foot traffic over the past few months. The return to store shopping has led to a considerable slowing in online sales growth. Online sales growth is expected to be 15.6% this year and 10% next year, declining from 29.5% last year.
Given this backdrop, we believe e-commerce companies Sea Ltd. ADR (SE) and MercadoLibre, Inc. (MELI), which look highly overvalued at their current price levels considering their weak fundamentals and growth prospects, are best avoided.
