Now that we’ve reached the 2020s, the Ecommerce industry has proven itself.
In 2020 itself, there has been a clear positive trend across the board in online businesses.
While major, centralized re-sellers (Amazon, Alibaba, etc.) make up one important piece of this puzzle, much of the industry has been spread across a large number of successful, low- to mid-scale companies.
As a result, promising investment opportunities await—not just in individual companies but in improved e-commerce and m-commerce tools.
We can see the notable upward trend of such tools in 2020, especially between April and December. Here are just a few examples.
The solid upward trajectory of the 2010s combined with the improved growth of the 2020s make this a valuable industry for investment.
Yet the question remains: Which specific company or companies represent the best bang for your buck?
Which key investments now could solidify your portfolio’s e-commerce and m-commerce offerings?
As luck would have it, there are several promising investment opportunities—one of which rises above the rest.
We’ve identified a company whose reach and offerings are truly impressive.
What makes it an excellent investment, though, extends beyond these admirable qualities: Beyond an existing undervaluation that makes it an immediately appealing investment, industry analysts agree that it is approaching an inflection point that will likely pay strong long-term dividends.
Logiq: Undervalued and Poised for Growth
Logiq is one of several e-commerce / m-commerce tool packages that saw notable growth in 2020. Stock values increased from $2.63 in April to $10.50 at year’s end.
Even with this substantial growth, however, it’s clear that Logiq being undervalued.
The price to revenue average for e/m-commerce companies varies, with a range from about 13x P/R on the low end up to 58x P/R on the high end.
Logiq, meanwhile, is sitting at an astounding 2.3X P/R (as of an 11/17/20 evaluation).
With an undervaluation and an upward industry trend, it’s easy to see how Logiq is a strong investment without any further offerings.
However, Logiq has also positioned itself to grow due to three separate traits.
First, Logiq’s major focus is on m-commerce.
Mobile commerce has been growing at a steady rate for years, but a recent uptick is visible in usage. Having set itself up as Shopify for Mobile, Logiq is in an optimal position to take advantage of this trend.
Second, Logiq has notable partners and substantial reach within the Southeast Asian marketplace.
Even more than those in the North American market, those in Southeast Asia are turning to mobile solutions to meet their shopping needs.
And third, Logiq has made recent acquisitions that add valuable seller tools.
The most significant of these came with Fixel AI, an advanced machine learning toolset built to increase consumer engagement and analysis.
This is all in addition to the organic growth drivers seen in the last year: a gross margin improvement from 35% (up from 17%), decreases in cost of operations, increased stakes in Logiq’s strategic alternatives, and the roll-out of an effective new digital marketing campaign.
Analysts agree that this has led to an incredible opportunity; Seeking Alpha noted the following:
“My ‘Sum Of The Parts’ valuation today would be $383.5 million of attributable value. When applied to Logiq’s current shares outstanding of 13.3 million, a SOTP valuation would equate to roughly $29 per share.”
Despite these advantages and a burgeoning m-commerce industry, some skeptics may be wary of the market’s direction post-pandemic.
Will these mobile shopping trends fade as the pandemic response comes to a close? Given the importance of this question the answer has received no small amount of study and analysis.
From Pandemic to Paradigm Shift: The Lasting Behavior Changes
A few obvious points can be made about the online and mobile shopping trends. Most notable is the fact that, even before the pandemic, a steady increase in mobile shopping can be seen. While the growth has favored some regions over others, the global trend remains clear. Though slow, there has been a clear paradigm shift in the making. The way we shop was already in the midst of a gradual but tremendous evolution.
However, the pandemic has served as an accelerant to this change. Consumers who were previously reluctant to try online solutions now found this to be the most viable solution. Those who occasionally used online and mobile shopping tools now use them on a daily basis.
As J.P. Morgan’s report put it, “E-commerce around the world, across sectors, has surged this year as pandemic-weary consumers looked online[.] In the U.S., consumers spent $211.5 billion during the second quarter on e–commerce, up 31.8% quarter- over-quarter, according to the U.S. Census Bureau.” That trend continued for the remainder of 2020.
J.P. Morgan predicts that the changes will stick around, stating “E-commerce [is] now accounting for 16.1% of all U.S. sales, up from 11.8% in the first quarter and this trend is likely to stick, even as brick-and-mortar stores open their doors again.”
Other studies show similar outlooks. An Accenture study stated, “Consumer habits have changed—and these changes are here to stay. [… T]here have been substantial and lasting changes in the way people live, work and shop.” They continued by noting that, “The dramatic rise in the adoption of ecommerce and omnichannel services, which has been evident since the start of our research, sees no sign of abating. The latest data suggests there will be a huge increase of 169% in ecommerce purchases from new or low frequency users, post-outbreak.”
A study from the UNCTAD and NetComm Suisse eCommerce Association confirmed these predictions as well. They saw growth across the eCommerce industry in 2020.
What’s more, their study indicated that habits were here to stay: “[R]esults suggest that changes in online activities are likely to outlast the COVID-19 pandemic. Most respondents, especially those in China and Turkey, said they’d continue shopping online and focusing on essential products in the future.”
What Sets Logiq Apart
What have we learned so far?
The industry is on the rise and that rising action is likely to persist.
When deciding which companies to invest in to take advantage of this sweeping trend, Logiq comes highly recommended.
This is due to Logiq’s undervaluation and growth-ready position. But what, beyond an undervaluation, makes Logiq worth your investment?
Here is what sets Logiq apart.
Reach in the Southeast Asian Market
As noted by the UNCTAD study, the habit changes of a post-pandemic world are more potent in some areas than others.
A Mordor Intelligence report states it even more succinctly: The Southeast Asian market will be the fastest growing for mCommerce between now and 2024.
Specialization in mCommerce Solutions
Since its early days, Logiq has branded itself as an mCommerce solution.
While this has not come at the expense of other tools and general eCommerce solutions, it has allowed a targeted approach to marketing and mastery.
A Strong History of Acquisitions
As an emergent player in the eCommerce and mCommerce games, it’s unsurprising that Logiq has pursued acquisitions.
One of its major revenue streams stems from its acquisition of an Indonesian digital financial transaction app, now branded as PayLogiq.
Beyond this, we have another prominent example with the recent acquisition of Fixel AI, which underpins the DataLogiq offering. The public offering of Kubient, a company with offerings similar to this Logiq sub-division, implies that DataLogiq’s standalone value may exceed $78M.
Record Revenue in 2020
Despite the chaos brought about by the changes of 2020 and the need to integrate new acquisitions, Logiq has been able to continue its trend of revenue growth.
2020 has set a new revenue record for the company, with DataLogiq acting as a substantial contributor.
Top-to-Bottom Tools for Sellers
Though mCommerce is the fastest-growing category for sellers, there are many online selling elements that can be built to develop an integrated strategy.
Rather than merely offering a niche solution, Logiq offers eCommerce, logistics, analytics, and fintech solutions to help businesses succeed in a comprehensive strategy.
Multiple Revenue Streams
The core offering of Logiq is a stable Platform as a Service (PaaS) model, allowing for steady subscriber growth to bolster the company’s bottom line.
However, this model is supplemented by additional revenue streams: Per-transaction income for mobile wallet purchases, managed service fees for DataLogiq’s Software as a Service (SaaS), and subscriber revenue from branded websites.
AI-Driven User Engagement Tools
Algorithm-driven improvements, especially when paired with advanced computer learning, has become the tool of the 21st century.
With the acquisition of the cutting-edge Fixel AI, Logiq can offer this technological advantage to its customers.
Logiq’s strong foundation stems from the variety and strength of these advantages. However, it is worth diving deeper into two of these positional advantages.
The Core Growth Market: A Closer Look at Southeast Asian Trends
Prior to 2020, it had already been noted that this market would be the fastest-growing for mobile commerce.
This is due to nearly universal adoption of smartphones: An estimated 90% use smartphones as their primary way to access the internet.
This is complimented by the prevalence of the small-to-medium businesses, which make up 89% to 99% of the market. As these SMBs are the exact market for Logiq, it’s a massive opportunity.
It’s not merely the high adoption of smartphones that makes this an ideal mCommerce marketplace, however.
According to the Mordor Intelligence mobile commerce market forecasts, the Asia Pacific region has the highest global growth rate.
In fact, it’s expected that there will be $1.1 trillion in mobile financial transactions by the end of 2021.
The 2020s look especially bright for mCommerce in Southeast Asia. The Bureau of Economic Analysis projects steady growth in the region, with a $3.3 trillion mCommerce industry by 2030.
Why is Logiq posed to take advantage of this growth?
Beyond all of the offerings that have been noted throughout this article, Logiq has two forms of partnership in the region: Governmental and corporate.
The primary governmental partnership at this time is with a major government agency in Indonesia.
It’s expected this will extend fintech services to 48 million potential consumers. This may also open to the door to future partnerships in the region.
Corporate connections are expansive. Major Logiq partners with a presence in Southeast Asia include, but are not limited to, the following:
- ShopeePay (Indonesia)
- LINE (Taiwan)
- Tech Mahindra (India)
- Finnet (Turkey)
- Indostat (India)
- Grab (Singapore)
With these partnerships, Logiq is among the best candidates to become the market leader in the region.
Logiq’s presence here, as well as its strong foothold in the North American market, give it powerful positioning.
Logiq in the News: An Impending Inflection Point
Observing the strong performance, undervaluation, and key assets of Logiq, many have reported the high potential of this company.
This was stated most explicitly by Wall Street Reporter, which noted that due to Logiq “rapidly growing its mobile e-commerce, and fintech business in Southeast Asia,” the brand was “at [an] inflection point for explosive revenue growth in 2021.”
Yet the core business is not the only position set up for massive growth. With its diverse offerings and revenue streams, the company has set itself up as a strong full-stack offering.
So while “Logiq is positioning to become a niche focused yet highly relevant e-commerce market leader,” this leadership position is not all that is relevant to understanding its value. Because of its acquisitions and stable growth, Seeking Alpha emphasizes the need to “focus on growth and sum of the parts valuation (SOTP),” which it estimates at $29 per share.
Beyond acquisitions, new partnership and further reach in Southeast Asia have led to expanded potential for its fintech division in particular.
After discussion of Logiq’s “new partnership with Indonesia’s government agency which can potentially offer it’s fintech services to 48 million members,” it was stated that Logiq may be headed for “exponential revenue growth in fintech.”
Logiq’s Established Leadership
Brent has 31 years of experience in the capital markets / investment banking industry. He was the youngest hire at Bear Stearns merger arbitrage department in 1987. He also has significant experience with Telecom, Media and Technology (TMT) companies as both investor and advisor. Brent has significant operational experience with both start-ups and expansion stage companies in Silicon Valley during the 1990’s, emerging markets experience in Asia, Eastern Europe and Latin America, and more recently mobile and internet companies in Southeast Asia.
From startups and IPOs to major global enterprises, over last 15 years, has been responsible for defining and building products for some of the world most successful companies, including Yahoo!, IBM, Rubicon Project, and Enthusiast Network. Previously, CTO of Logiq’s DataLogic subsidiary, and served as CPO at ConversionPoint, leading product development with clients including Intel, Samsung, Nikon & Logitech.
Lionel has had over 30 years of experience in finance across a number of fields, such as ‘Big 4’ audit, compliance and chief financial officer. He was former vice chairman of Emerson Radio (NYSE: MSN). He was also the former Chief Financial Officer of Byford London, listed on the Hong Kong Stock Exchange. Lionel is a chartered accountant & retired as a partner of Deloitte where he headed up the biz development for Corporate finance service lines. He has an MBA from Kellogg-HKUST and a Corporate Finance Diploma from the Institute of Chartered Accountants in England & Wales, UK.
Eddie Foong has over 17 years of experience in IT, sales and marketing and operations. He was involved in a RFID technology company that developed and changed Singapore National Library Books borrowing system island-wide. He previously headed the sales and marketing department of Info. Technology within MNCs and government agencies. He graduated with a Class 1 BEng Honours Degree and IBM Award holder from University of Strathclyde, U.K.
7 Reasons Logiq Is Worthy of Consideration
Throughout this article, we’ve highlighted why it is that Logiq stands out in an already promising industry. Let’s take a moment to tie it all back together. Here are some of the reasons why Logiq is worthy of your consideration.
1. Growth throughout the eCommerce / mCommerce industries.
A stable upward climb throughout the 2010s has been accelerated at the beginning of the new decade. While all online business is expected to expand, mCommerce is likely to see noteworthy growth. As Logiq’s primary offerings are targeted at mCommerce, it is
2. Logiq’s significant undervaluation.
Though the industry as a whole is likely to improve, some investments stand above the rest. The P/R ratio of Logiq currently sits at 2.3x, compared to an average of approximately 24x among comparable companies. The sum-of-all-parts valuation shows an even larger gap between price and value.
3. Recent acquisitions.
The previous acquisition of tools integrated into PayLogiq and DataLogiq have shown that the company is capable of spying opportunities and integrating effective products. The most recent acquisition, Fixel AI, is set to give the company a competitive edge in years to come.
4. Record revenue.
Despite the rocky months and rapid transitions of 2020, Logiq posted record revenue. Year over year, their revenue has showed stable and substantial growth
5. Reach in the Southeast Asian market.
The Southeast Asian market is the fastest-growing region in the world for mCommerce. Logiq’s governmental and business partnerships throughout the region may make the company the key player moving forward.
6. Tried and tested leadership.
Logiq is a company run by industry veterans. These leaders have proven their ability to outmaneuver competitors on a consistent basis. This history has built their trust and opens new doors in expanding marketplaces throughout the globe.
Because of its comprehensive offerings and unique market position, Logiq is well worth considering for investment. Its potential in 2021 and beyond is clear to see.
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