2020 is proving to be a banner year for e-commerce and online retail. Recent events, such as Amazon’s (NASDAQ: AMZN) Prime Day and Alibaba’s (NYSE: BABA) Singles Day prove as much. Those days, holiday shopping, and more underscore the potency of the Global X E-commerce ETF (NasdaqGM: EBIZ).
EBIZ reflects the performance of the Solactive eCommerce Index and looks to invest in companies positioned to benefit from the increased adoption of E-commerce as a distribution model, including companies whose principal business is in operating eCommerce platforms, providing eCommerce software and services, and/or selling goods and services online.
“Amazon’s Prime Day, which offers Prime users two days of savings and deals from businesses, added further fuel to what is fast becoming a booming e-commerce economy,” according to Global X research. “Taking place from October 13-14th, global Prime Day sales totaled $10.4 billion, up 45.2% from $7.2 billion in 2019.”
The EBIZ Revolution Is Here
E-commerce or online retail has been a growing trend that quickly accelerated this year due to the coronavirus pandemic. Investors can also look to exchange traded fund strategies to capture this shift in consumer habits.
The new structural demand growth trend among shoppers around the world can potentially provide rewarding opportunities for investors. Investors should target these companies found all along the chain of activities that are necessary to online shopping. For example, investors can look to retailers seeking to sell goods online or e-commerce platform firms that can provide vendors with the ability to build an estore.
“Moving Prime Day to October from July likely helped, with consumers still shopping online due to the pandemic and starting their holiday gift shopping,” according to Global X. “While an encouraging sign of greater e-commerce penetration in the U.S., Prime Day still trails Alibaba’s Singles’ Day event in sales by a wide margin due regional differences in e-commerce penetration.”
Good news: Data confirm the online retail market in the U.S. is growing in a big way, pointing to long-term upside with EBIZ.
“U.S. e-commerce is rapidly growing – online sales in the U.S. are expected to total $795 billion in 2020, up 32% year-over-year,” notes Global X. “Aside from Amazon, other retailers including Walmart, Target, Kohl’s and J.C. Penney are hosting their own events and similarly benefitting from heightened e-commerce activity.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.