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Online Retail Monthly Report | November

 

Online Retail ETF Monthly Report: Key Takeaways

 

Online Retail to Remain Holiday Lifeline – In 2020, online retail was a lifeline for shoppers throughout the year due to COVID lock-downs. This holiday season, Q4 ecommerce sales are expected to drop to 74.8% from 75% last year, as shoppers return in-store. But supply chain-related dislocations are expected to have a bigger impact on traditional retailers with many purchases ultimately being made online. [1]

Consumer Spending Strong – The National Retail Federation expects holiday sales to rise between 8.5% and 10.5% over last year despite headwinds including supply chain and labour shortages.  The return to work, rising consumer optimism in the coming months as COVID cases recede, and continued vaccination progress will spur retail spending across the board, with online retail expected to land above pre-pandemic levels. [2]

Mcommerce Continues to Gain Share – Mcommerce is expected to approach almost 50% of ecommerce sales, with the improved retail app experiences like one-click checkout and the rising tide of consumer options like click-and-collect curbside pickup and Buy Now Pay Later (BNPL) being initiated online. [3]

Supply Chain Issues Mean Early Shopping – Many retailers like Amazon and Amazon encouraging consumers to “shop early” due to supply constraints, but retailers have other reasons to encourage early shopping.  According to Deloitte, people who do their holiday shopping before Thanksgiving spend more than 23% on average. And according to Coresight Research, top consumer preferences for the holiday season include free shipping and free returns. [4]

Older Consumers Prefer Shopping Online – Consumers over age 60 will drive the ecommerce increase from 52 to 59% YOY, with 71% planning to shop fully online, while shoppers between the ages of 30-44 plan to spend more in-store. [5]

 

Macro Outlook

Global Ecommerce Set to Grow Double-Digits This Holiday Season

In our opinion, consumer spending may grow at a more subdued but robust level after an increase in digital shopping during the COVID pandemic. We believe limited inventory, rising costs, and labour shortages are trends likely to impact traditional retailers more than those online as consumers continue to embrace greater product selection, competitive pricing, 24/7 convenience, and more shipping options online.  Online shopping growth will be further supported by new shopping smart-phone enabled habits like “click and collect” curb side delivery and “buy now pay later” (BNPL). And older shoppers are likely to remain online this holiday season instead of venturing out to shop in-store.  

 

Online Retail ETF Performance Table (As of 31.10.2021)

 

1M

3M

6M

YTD

12M

SI

Global Online Retail UCITS ETF

0.60%

-5.10%

-7.35%

-6.88%

NA

-6.88%

EQM Global Online Retail Growth Index

0.64%

-4.93%

-7.00%

-6.49%

25.15%

-6.49%

Performance before inception is based on back tested data. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Source: Bloomberg / HANetf. Data as of 31/10/21. Please note that all performance figures are showing net data.

 

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