Hampleton: E-commerce M&A report for the second half of 2022

According to Hampleton’s e-commerce M&A market report, the e-commerce industry’s record deal volume has fallen back to more mature pre-pandemic levels. In the past quarter (Q3), there were 410 e-commerce M&A deals, down 25% from 544 in Q2, which was also down 22% from Q1 (699 deals).

Overall, more than 2,300 M&A deals were concluded last year, a 38% increase from 2020 (1,722 deals) and a 70% increase from 2019 (1,397 deals).

By sub-industry

The two largest segments in terms of transaction volume in the first half of the year were Internet services and portals (30% share) and e-commerce software (26%). These two branches also experienced significant declines in the second and third quarters of this year. Media, social and games (18%) and online retail (14%) began to decline later in 2021.

The smallest sub-sector by transaction volume is Agencies and Service Providers (12%), which actually saw an increase in transaction volume in the third quarter.

Internet Services and Portals

Transaction volume in this sub-sector grew steadily from the second quarter of 2021 to a peak of 212 in the first quarter of 2022, but has since fallen back to levels seen in the third quarter, with just 76 transactions recorded, the lowest number since at least 2016.

E-commerce software

After doubling year-over-year in the first quarter of 2022, transaction volumes in the sub-sector have been declining, with the 91 transactions recorded in the third quarter being about half of the 188 in the first quarter.

Media, Social and Gaming

In line with the overall trend, deal volume in this sub-sector has declined, but the decline began earlier, in the fourth quarter of 2021. While deal count has declined over several quarters, it remains above pre-pandemic levels.

Online Retail

The volume of transactions in the online retail offshoot industry has been fluctuating, although perhaps not at the same rate as other industries. Transactions have been steadily declining since the second quarter of 2021, with 179 transactions completed in the first half of this year, compared to 247 in the first half of 2021.

Agents and Service Providers

The sub-sector has been on an upward trend in transaction volume since the fourth quarter of 2020, with the 153 transactions completed in the first half of this year performing well compared to the 123 transactions in the first half of last year.