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Why You Must Invest In The Online Shopping Sector Now

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.

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.

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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 growth.

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.


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Kent Kwan is a co-founder of AtlasTrend, a global equities fund manager that makes it easy for anyone to invest in the world's most thriving trends.

Disclaimer: Atlastrend Pty Ltd (ABN 83 605 565 491) is a Corporate Authorised Representative (No. 001233660) of Fundhost Limited (ABN 69 092 517 087, AFS License No. 233045). Any advice contained in this communication is general advice only. None of the information provided is, or should be considered to be, personal financial advice. The content has been prepared without taking into account your personal objectives, financial situations or needs. If you consider it necessary you should seek your own advice before making any financial or investment decisions. The information provided in this communication is believed to be accurate at the time of writing. None of Atlastrend Pty Ltd, Fundhost Limited or their related entities nor their respective officers and agents accept responsibility for any inaccuracy in, or any actions taken in reliance upon, that information.

Any managed investment fund product (Fund) mentioned in this communication is offered at www.atlastrend.com via a Product Disclosure Statement (PDS) which will contain all the details of the offer. The PDS is issued by Fundhost Limited as responsible entity for the investment fund products. Before making any decision to make or hold any investment in a Fund you should consider the PDS in full. The PDS is available at www.atlastrend.com or by calling AtlasTrend on 1800 589 778. Investment returns are not guaranteed. Past performance is not an indicator of future performance.



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