The Future Is Bright for EBIZ | ETF Trends

The pandemic has certainly underscored the importance of having an e-commerce infrastructure in place that could function amid social distancing measures. Now, the benefits of e-commerce aren’t waning — in fact, it still presents investors with a viable growth opportunity.

“According to an industry analysis report by The Business Research Company, the global e-commerce market was worth $2.63 trillion in 2021 and is expected to reach a value of $3.04 trillion in 2022, growing at a compound annual growth rate of 15.7%,” an Insider Monkey article published on Yahoo! Finance noted. “The market is expected to grow at a CAGR of 12% from 2022 to 2026 and reach a value of $4.79 trillion by the end of the forecasted period.”

One of the key reasons for the rise is the heavier use of smartphones. Having a computer is no longer imperative in order to reap the full benefits of e-commerce with the increased technology that mobile phones can offer these days.

As such, the full breadth of e-commerce is literally available at any user’s fingertips. That along with continued use of the internet should provide enough of a catalyst for e-commerce growth.

“This growth is expected to be driven primarily by the increasing adoption of smartphones and a growing number of internet users,” the article added. “It is estimated that the number of internet users across the globe in 2022 has reached 5 billion, and the number of smartphone owners has climbed to 6.64 billion.”

E-Commerce in EBIZ

Getting this level of growth exposure is available in one exchange traded fund (ETF): the Global X Funds – Global X E-commerce ETF (EBIZ). The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive E-commerce Index.

Overall, EBIZ seeks to invest in companies positioned to benefit from the increased adoption of e-commerce as a distribution model. This includes companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online.

EBIZ offers investors:

  • High growth potential: Despite years of strong growth, e-commerce still represented less than one-fifth of global retail sales in 2020, highlighting substantial room for further adoption.
  • Global tailwinds: E-commerce is a global theme, poised to benefit as expanding broadband and mobile internet penetration coincide with a rising middle class in developing markets.
  • New consumer preferences: The pandemic forced many businesses to offer goods and services online for the first time, which has shifted consumer expectations and expanded the scope of e-commerce to larger segments like groceries and autos.

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