Headquartered in San Francisco, California, Salesforce (CRM) provides a cloud-based customer relations management “CRM” platform. I am bullish on the stock.
Today’s technology companies – even the biggest and best ones – can’t succeed entirely on their own. In the cloud and elsewhere, strategic partnerships can enhance a company’s bottom line while bolstering shareholder confidence.
Salesforce is known for its market presence in the fields of cloud computing and digitized customer-relations solutions. Yet, a pair of potent partnerships should thrust Salesforce into the lucrative world of e-commerce.
With Salesforce stock trading close to its 52-week low, two value-added collaborations could provide a timely turnaround for downtrodden investors in 2022.
E-Commerce with a Social Angle
By far, the most well-known e-commerce platform in China is Alibaba (BABA). In terms of size, capital reserves, and customer base, Alibaba is a bonafide giant in the region.
Therefore, it’s surprising that this news item isn’t more widely reported in the media. Apparently, Salesforce and Alibaba Cloud have been working toward an agreement to launch a service called Salesforce Social Commerce.
Consider the revenue-generating opportunity here. China is the world’s largest retail market. Moreover, as Salesforce points out, the “line between e-commerce and social platforms is often blurred” in China.
In other words, Chinese shoppers are ready for an e-commerce service with a social angle. So, in a perfect partnership, Salesforce Social Commerce will (if everything works out as planned) be built and hosted on Alibaba Cloud to target China’s vast e-retail market.
Unfortunately, it appears that the details aren’t all available yet regarding Salesforce Social Commerce.
However, Salesforce Chief Business Officer Ryan Aytay did reveal that the service will “enable companies to manage and unify their first-party commerce experiences, from websites to social applications, to gain a 360-degree view of their customers.”
Optimizing the E-Commerce Experience
Clearly, the social-commerce collab with Alibaba could be a game changer for Salesforce. Yet, that’s not the only partnership with power-packed potential.
As it turns out, Salesforce is expanding its business relationship with one of the biggest players in the digital payments space, PayPal (PYPL).
As a result, through Salesforce Payments, merchants will be able to add helpful and convenient PayPal-branded buttons to their e-commerce experience. This will provide access to a range of PayPal payment offerings, including Venmo, PayPal Credit, and PayPal’s Buy Now, Pay Later products.
This truly is a win-win for everyone involved, as merchants who integrate through Salesforce “will join PayPal’s more than 416 million active account holders who are part of the PayPal network.”
It’s a win for the shoppers, as they’ll have greater flexibility and choice in how they pay online. Merchants, meanwhile, could potentially broaden their customer base, increase their conversion rates, and turn one-time shoppers into repeat customers.
Wall Street’s Take
Turning to Wall Street, CRM stock is a Strong Buy, based on 23 Buys and four Holds assigned in the past three months. The average Salesforce price target is $333.17, implying 52.5% upside potential.
The Takeaway
Through collaborations with Alibaba and PayPal, Salesforce is transitioning from a cloud king to an e-commerce contender.
At the same time, Salesforce stock was recently trading near its 52-week low. For contrarian investors, there’s a mismatch between perception and reality and, therefore, a prime buying opportunity.
So, let the doubters sell their Salesforce stock if they want to. Hopefully, they’ll catch wind of the exciting partnerships that are already in progress and see the true value of Salesforce stock before it turns around.
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