Online Retail Monthly Report | September

15 September 2022

Online Retail ETF Monthly Report: Key Takeaways

US Ecommerce Grew 7.3% in Q2 2022 – U.S. ecommerce spending in Q2 marked its fourth straight quarter of single-digit growth following the 45%-50% jumps during the first year of the pandemic, according to analysis of U.S. Department of Commerce figures released August 17th. While the quarter's ecommerce performance was more muted as Amazon Prime Day dollars shifted to Q3 this year, the increase in digital sales outpaced that of stores for the first time since early 2021. More than 20% of consumer spending from April-June occurred online, representing more than $1 in every $5 spent. [1]

US Online Retail Sales Predicted to Reach $1.6 trillion by 2027 – Forecasting continued long-term growth for e-commerce, U.S. online retail sales are projected to reach $1.6 trillion by 2027, and the overall retail sector will generate $5.5 trillion by 2027, a new Forrester report predicts.[2] The firm also projects that U.S. online retail sales will surpass $1 trillion this year. Buy online, pick up in store transactions will reach $100 billion this year and will be greater than $200 billion by 2027, the firm projects. The firm’s research also predicts that online retail sales will comprise 30% of total retail sales by 2027. [3]

UK Shoppers Spent More in July Thanks to Online Shopping Deals - British shoppers spent more than expected last month after being enticed by online shopping deals. Growth was overwhelmingly driven by a 4.8% surge in online and mail order volumes, the biggest monthly jump since December. Amazon’s Prime Day has previously coincided with an uptick in British retail sales, but greater spending was seen at a broad range of online retailers, especially for household goods, despite inflation headwinds of 10.1% CPI in July. [4]

Online Retail Seeing Strength as Brick-and-Mortar Falters – After an initial surge of interest in in-person shopping, consumers may be remembering why they shopped online in the first place. Poor inventory selection, understaffed stores with poor customer service, and higher gas prices have all helped spur a return to bargain shopping online. Furthermore, the in-store retail experience has been permanently transformed by new in-store features like BOPIS (buy online pickup in store) and self-checkout. But will consumers be willing to pay-up for less personal service, or just shop online? Retailers such as Walmart, Target, and BestBuy have struggled recently, while Amazon and EBay have seen an uptick in growth with successful promotions like Prime Day and a rise in spending by enthusiasts on high-value collectibles, sneakers and watches that helped eBay. [5]

 

Please note that past performance is not indicative of future performance.

 

Macro Outlook

Shoppers Returning Online

As consumers become more “discretionary” with their purchases confronted with higher energy costs and inflation, they have been returning online for better prices, selection, and convenience. In the US, for the first time since 2021, online retail is once again outpacing in-store retail. In 2021, retail e-commerce sales amounted to approximately $4.9 trillion U.S. dollars worldwide. This figure is forecast to grow by 50 percent over the next four years, reaching about 7.4 trillion dollars by 2025.

Digital development in Latin America boomed during the COVID-19 pandemic, generating unprecedented e-commerce growth in various economies across the region. So much so that Brazil and Argentina are now the world's fastest-growing online retail markets. This trend correlates strongly with the constantly improving online access which facilitates more mobile shopping by a greater number of people around the world. [6]

Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs, your capital is at risk .

 

Please remember that when you invest in ETFs, your capital is at risk.

 

Online Retail ETF Performance (As of 31.08.2022)

 

1M

3M

6M

YTD

12M

SI

Global Online Retail UCITS ETF

0.83%

-8.59%

-44.23%

-60.84%

-71.87%

-72.31%

EQM Global Online Retail Growth Index

0.91%

-8.33%

-43.85%

-60.45%

-71.52%

-71.87%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/08/2022

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 31/08/22. Please note that all performance figures are showing net data.

 

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