HANetf : Ecommerce delivered for shoppers over the festive period and will deliver for investors in the first quarter as earnings reports are on track to beat initial expectations, the Global Online Retail ETF (ticker: IBUY) believes.
Sign up to our free newsletters
- US ecommerce sales rose 11% over the holiday season and are 61.4% higher than pre-pandemic
- Supply chain issues will ease in the second half of 2022, but inflation will become a major issue for retailers, IBUY believes
- Amazon slips to fourth in global shopping apps behind Singapore’s Shopee, China’s SHEIN and India’s Meesho
Data shows US ecommerce sales were up 11% on the previous year this holiday season and are 61.4% higher than pre-pandemic 2019 with ecommerce accounting for 21% of total holiday sales compared with 14.6% in 2019.
It’s not just the US which is seeing strong growth – Amazon which is well-established as the leading ecommerce app in the US has slipped to fourth in global shopping apps behind Singapore’s Shopee, China’s SHEIN and India’s Meesho. All three like Amazon are international brands drawing customers across the world.
The Global Online Retail UCITS ETF (IBUY) says the added convenience of online shopping is continuing to drive spending with shoppers also relying on ecommerce more at Christmas 2021 because it reduced the risk of catching COVID-19 in stores and having to self-isolate.
Analysts forecast issues about supply chains are expected to ease and be back to normal by the second half but warn that inflation and rising prices will create problems for retailers. Online stores benefited from worries about supply chains and product availability with customers willing to pay more to ensure they received their orders.
Jane Edmondson, manager of Global Online Retail UCITS ETF (IBUY) said: “With supply chains constrained, product availability was a big concern for holiday shoppers with 71% of online holiday shoppers citing it as a factor affecting their online purchasing decisions according to eMarketer. With consumers willing to pay up for merchandise, that translated into fewer discounts and higher online retail margins.
“While many online retailers suffered earnings misses last quarter as they failed to successfully navigate peak growth conditions, first quarter numbers are likely to be better than initial expectations due to December’s unexpected COVID surge.”
The Global Online Retail ETF (IBUY), which has a TER of 0.69%, tracks the EQM Global Online Retail Index seeks to track the combined performance of a basket of global stocks that derive significant revenue from online and virtual retail commerce including the online retail and online marketplace. The index is revenue-weighted with a maximum of 20% of exposure to emerging markets. The index is down 6.54% in the 12 months to November 30th 2021. Past performance is no guarantee of future performance. When you trade ETFs, your capital is at risk.
Source: ETFWorld.co.uk
Subscribe to Our Newsletter
