While consumers in developed markets have been using the internet to shop for decades, the growth of affordable mobile technology has recently enabled consumers in emerging and developing markets to also shop and bank online. This megatrend of digitally connected consumers is underpinning generational shifts in how people live, work, shop, and play.
Michelle Evans, senior head of global digital consumer research at market research company Euromonitor International, said “there are a variety of trends driving this megatrend,” including digital democratization, passive consumption, and the notion of everything being connected (sometimes called “the Internet of Everything”).
“While the smartphone ushered in convenience for developed market consumers, the smartphone gave access to the internet for many emerging market consumers,” Evans said about the trend of digital democratization.
She added that, based on a survey Euromonitor International conducted in 2018, “the notion of everything being connected … is one of the most impactful tech trends that we will see.”
Added to this growing interconnectivity is a huge demographic completely at ease with doing the bulk of their shopping online. A 2020 Bank of America survey reported by CNBC revealed that Gen Z’s economic power is the fastest growing among current generations. As they continue to enter the workforce, their income is predicted to increase fivefold to $33 trillion by 2030 and surpass Millennials’ income by 2031.
For investors looking to invest in companies related to the megatrends of digitally connected consumers, Neuberger Berman has recently launched the actively managed Neuberger Berman Connected Consumer ETF (NYSE Arca: NBCC).
NBCC seeks to invest in companies that could benefit from Generations Y and Z being the dominant consumers. This includes companies that demonstrate significant growth potential from connectivity-based consumerism.
The fund spans a broad range of industries globally and may invest in companies of any market cap. The team will evaluate the web search and spending tendencies of millions of consumers and the daily call transcripts and filings of over 4,000 public companies to identify the opportunities that appear best positioned for mass adoption in the digital age.
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