Analysts offer dampened outlook for e-commerce in 2023
Sean Gallup

E-commerce spending is expected to take a step back in 2023 after two years of strong pandemic growth, according to multiple new sell-side research reports.
According to UBS estimates, e-commerce sales should decline 0.5% in 2023 as compared to 2023 and mark another annual decline of 0.3% in 2024. The bankâs economists explained that discretionary spending will likely contract given macroeconomic headwinds and may have already, were it not for significant increases in credit card debt. A contract âin earnestâ is expected by the start of the second quarter.
As such, the bankâs analysts reeled in revenue growth forecasts for Amazon (NASDAQ:AMZN) and also lowered AWS margin expectations. While a Buy rating was retained, the team trimmed their price target to $121 from $125 alongside the cut to sales estimates.
Similar concerns were cited in a reiteration of a Sell rating on Shopify (NYSE:SHOP), which is also under pressure from Amazonâs Buy with Prime initiative. Given these risks, the valuation for the Canadian e-commerce company is too lofty, in the team's view.
"While it remains the undisputed leader amongst eCommerce platform providers, the shares still reflect an optimistic view on growth and/or margins," UBS advised.
Keybanc was similarly cautious on the e-commerce front, downgrading BigCommerce (BIGC) in a sweeping review of e-commerce, payment processors, and software support for internet retailers. 
âAt [BigCommerce] (BIGC), we see a combination of a softening e-Com environment (projecting ~6% PSR growth) and extending enterprise sales cycle as likely governors of growth and look for increased clarity on a potential rebound,â equity analyst Josh Beck advised.
Beck reduced his rating to a Hold-equivalent from a prior Buy. Other commerce software providers Riskified (RSKD) and Squarespace (SQSP) were also downgraded to Hold on valuation concerns.
That said, Beck was not entirely pessimistic. He selected Toast (TOST) as a top pick, highlighting what he sees as secular growth that can overcome a choppy macro backdrop.
âOur key idea within the commerce group is TOST, as we see GTM efficiency gains driven by improved rep productivity, increased product attachment, and a disciplined investment mindset as potential catalysts,â Beck concluded.