An EBIZ Catalyst Worth Examination: Holiday Shopping

With coronavirus case counts spiking again, it’s reasonable to expect that the holiday shopping season will take an online flavor. That’s great news for exchange traded funds such as the Global X E-commerce ETF (NasdaqGM: EBIZ).

EBIZ reflects the performance of the Solactive eCommerce Index and looks to invest in companies positioned to benefit from the increased adoption of E-commerce as a distribution model, including companies whose principal business is in operating eCommerce platforms, providing eCommerce software and services, and/or selling goods and services online.

EBIZ YTD Performance

Adobe’s annual holiday spending forecast “says the online shopping total, which covers the period from Nov. 1 to Dec. 31, could soar past $200 billion if Congress passes a new stimulus package—or if more physical stores shut down as a result of the pandemic,” reports Eric Savitz for Barron’s.

Epic E-Commerce

Certain retailers have actually benefited from Covid-19. Take grocery stores. With social distancing measures in place, groceries have shifted more of their products to online availability, but that’s a practical day-to-day catalyst. With holiday shopping ramping up, online retailers are poised for more growth as consumer eschew malls and physical stores.

The Adobe study “predicts a 42% jump in Thanksgiving Day online sales to $6 billion, a 39% jump in Black Friday e-commerce sales to $10.3 billion and a 35% increase in Cyber Monday sales to $12.7 billion,” according to Barron’s.

With the holiday shopping season essentially here, EBIZ has another catalyst. Some holiday shoppers may just be late in getting to it. Given how spending is highest in November and December, with estimates at three-quarters of a trillion dollars, the prevalence of online shopping means a lot of companies can profit.

“Adobe projects sales will peak at $3 billion a day in the period from Nov. 22 to Dec. 3, with $2 billion a day in the first three weeks of November, and in the period between Dec. 4 and Dec. 18,” reports Barron’s.

Importantly, data confirm online retail has plenty of room for growth and can steal plenty of market share from brick-and-mortar retailers.

Adobe’s study “found that 42% of online shopping this year will be via mobile phone. The company expects mobile shopping to surpass half of the e-commerce market at some point in 2021,” according to Barron’s.

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