Charlie Munger predicts Costco will become a titan of online shopping

• Billionaire investor Charlie Munger says Costco has the power to be an online titan.
• The warehouse club currently offers limited online shopping services.

Costco has been famously slow to make inroads into the world of online shopping, but billionaire investor Charlie Munger says it has the power to be a "titan" online.

Speaking at Daily Journal's annual meeting on Wednesday, Munger, Warren Buffett's right-hand man, said: "Costco is going to be an absolute titan on the internet because they have curated products that everybody trusts, and huge purchasing power on a limited number of stocking units."

He continued: "I wish everything else in America was working as well as Costco does. Think what a positive thing that would be for us all."

Munger sits on Costco's board of directors and previously owned Costco stock through Buffett's investment firm Berkshire Hathaway, of which Munger is vice chairman.

When it comes to online selling, the advantage of offering products that customers already know and trust – such as Kirkland Signature, Costco's wildly popular and successful private-label collection – is that shoppers feel more comfortable buying these items without having to go into a store to check them out first.

And having a limited number of products could give Costco an advantage because it simplifies the logistics and delivery side of e-commerce.

Thus far, Costco's online offering has been limited. It currently offers a two-day delivery service on essentials such as groceries and cleaning products and same-day delivery services in most US cities, through its partnership with delivery company Instacart.

But its e-commerce arm is growing. E-commerce sales were up 44% in fiscal 2021 compared with the same period the prior year.

Despite its limited online presence, Costco is one of the strongest brick-and-mortar retailers in the US and one of the sector's most valuable stocks. It remains competitive with Amazon thanks to its membership model, and keeps customers coming back to stores by offering deals, discounts, and services such as cheap gas and vacations.