Internet Commerce Is Gaining Ground and eBay Is Reaping the Rewards

Joseph is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

On Cyber Monday, there was an increase of 70% year over year of mobile users accessing retailers sites, according to Bloomberg. Mobile sales (at 13% of total web purchases) also doubled. eBay (NASDAQ: EBAY)for the first time since 2007, had its client sales on its primary website shoot up faster than those of (NASDAQ: AMZN), with most of these sales as a result of their successful mobile strategy. eBay also demonstrated exemplary growth in mobile this Thanksgiving, too. The company saw a 133% increase in mobile volume transactions, with eBay owned PayPal experiencing a 173% Year over year increase in global payments occurring on Turkey Day. If consumer spending continues at the same pace, eBay's mobile strategy should see some nice growth in mobile sales during Christmas time as well.

Wal-Mart (NYSE: WMT) also made a killing in mobile during the recent holidays. A 280% increase in online traffic, generated by the company's mobile app, helped Walmart achieve their biggest sales day in their company's history. Not to be shown up, Amazon also set records on Cyber Monday. According to the company, they sold the most Kindles ever, but numbers haven't been yet released for this opaque claim. With Black Friday and Cyber Monday seeing records broken, it seems that online and mobile shopping is not only here to stay, but may one day even trump brick and mortar stores. Especially now that many companies are experimenting with same-day delivery.

This growing online trend has to mean good things for Ebay:

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Ebay's P/E ratio isn't too pricey at this point and the share price is steadily increasing. Amazon is Ebay's biggest competitor, and for a comparison, is priced at a whopping 3,531 times earnings!

With a paradigm shift in consumer spending, occurring due to increasing online sales, Ebay is poised to profit from their already established position. The company's main auction site is unique in and of itself, but when coupled with PayPal, provides the company with a nice niche business that is hard to replicate. PayPal allows consumers to easily make payments and transfers online, and should see a significant rise in traffic and transactions as online and mobile shopping rises in popularity.

Ebay recently reported their third quarter results, seeing a 15% increase in revenues. The company also saw an increase in operating profit margin, with a 9% increase YOY revenue in its core Ebay Marketplaces business. Ebay is doing things right, generating growth and increasing margins and revenues. The company is also transitioning into mobile nicely, as Cyber Monday sales showed, and should continue its growth story through the holidays, as well.

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Ebay also has a healthy balance sheet, with enough cash to pay off its long-term debt as of today. The company would be a good buy for the investor looking to capitalize off the growth of online commerce.

Jharry1 owns shares of Wal-Mart Stores. The Motley Fool owns shares of Motley Fool newsletter services recommend and eBay. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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