Do you online shop and more importantly do you think you might online shop more over the next 5 to 10 years?
Chances are you answered yes to both questions and if you asked your friends or family they would very likely answer the same.
Why is this important?
Well, from that simple observation, you have already identified that the rapid growth of the online shopping industry is a near unstoppable trend over the next decade. Investment professionals like to call this “structural growth”. It is just a fancy word for saying something will grow irrespective of what is going on in the broader economy.
The following information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
How is this different from some of the other trends or industries you might have invested in?
Let’s put it this way. If you have invested in the mining resources sector, you’ll know that making money depends a lot on what commodity prices are trading at which is unpredictable over any meaningful period. If you are a shareholder in the banks, you might like their dividend yield but in the back of your mind, you are probably worried how their share prices will hold up if property prices decline significantly.
Compare this to the growth of the online shopping industry. Can you come up with any reasons that would cause a backward step in the growth of online shopping over the next decade?
We’ve considered this question long and hard. Besides a major world war, the only other reason we’ve come up with is this. The internet stops working. Around the world. For a long time.
Not remotely likely in other words and if either of those things happened, your investments are probably not going to be front of mind.
Don’t just take our word that online shopping is a theme with great investment prospects. Here are 3 simple but powerful facts that back up your intuition about online shopping being a decade long growth trend going forward.
1. Online shopping has grown 7 times faster than the traditional retail industry
Source: US Census Bureau
The US online shopping industry is one of longest established in the world. From 2000 to 2015, US online e-commerce retail sales grew on average 17.1% per annum compared to 2.5% per annum for non e-commerce retail sales, an astonishing 7 times difference. Even during the depths of one of the worst recessions in living memory when non e-commerce retail sales dropped 8% in 2009, online shopping sales increased by 2%. Similar trends are being seen in many other countries.
2. There is room for online shopping to grow well into the next decade
China and the US are the two largest online shopping markets in the world with total sales of US$930 billion in 2015. However, in the US, only 8% of all retail sales are online while in China it is approximately 13%. In other words, well over 85% of the world’s two largest retail markets are still available for the online shopping industry to gain revenue and profits.
3. Online shopping companies are already delivering far superior performance
The chart below compares the world’s largest online retailer (Amazon) against the world’s largest traditional retailer (Wal-Mart) by revenue.
As you can see, the tailwinds behind online shopping are very strong which provides a number of potentially profitable investment opportunities. Would you consider investing your money into the companies benefitting from the growth of the online shopping industry?
If you online shop, your friends and family online shop, and you know with confidence you’ll online shop ever more over the next 5 to 10 years, it probably is an investment you should seriously consider.
To find out more about how to easily invest in the growth of online shopping, click here to sign up for a free AtlasTrend membership, and find out all the listed shares AtlasTrend’s managed fund dedicated to investing in the rapid growth of online shopping invests in.
