It’s no surprise that online shopping I stepping into the forefront of the retail sector, but its dominance in the space is one that should continue in 2020 and beyond as the global economies look to reopen in a post-COVID world.
Where are the opportunities specifically in online retail? It depends on where you are in the world.
Globally, results are mixed,” says WWD. “In the U.K., online fashion apparel sales are up 45 percent for traditional retailers and 72 percent for pure-play sites. In France, the year-over-year growth for retailers selling fashion apparel is up 42 percent while pure-play sales are up just 1.4 percent. In China, online sales at traditional retailers is down 45 percent year-over-year while pure-play fashion apparel sites show a 65 percent decline.”
The effects of the pandemic have also changed the way consumers are shopping and the products sought.
“We have seen increased demand for health and personal hygiene products including surgical masks and hand sanitizers, along with other daily necessities such as non-perishable food and beverage products,” said Zhou Junjie, Chief Commercial Officer for Singapore-based eCommerce platform Shopee.
A shift in retail could fuel gains for the Direxion Daily Retail Bull 3X ETF (NYSEArca: RETL). RETL seeks daily investment results equal to 300% of the daily performance of the S&P Retail Select Industry Index, which is a modified equal-weighted index that is designed to measure the performance of the stocks comprising the S&P Total Market Index that are classified in the Global Industry Classification Standard (GICS) retail sub-industry.
For investors looking for non-leveraged options, they can opt for the following:
- Amplify Online Retail ETF (NasdaqGM: IBUY): seeks investment results that generally correspond to the price and yield of the EQM Online Retail Index. The index seeks to measure the performance of global equity securities of publicly traded companies with significant revenue from the online retail business. The index methodology is designed to result in a portfolio that has the potential for capital appreciation.
- SPDR S&P Retail ETF (NYSEArca: XRT): seeks to provide investment results that correspond generally to the total return performance of an index derived from the retail segment of a U.S. total market composite index. The index represents the retail segment of the S&P Total Market Index (“S&P TMI”).
- ProShares Online Retail ETF (NYSEArca: ONLN): seeks investment results that track the performance of the ProShares Online Retail Index (the index). The index is designed to measure the performance of publicly traded companies that principally sell online or through other non-store sales channels, such as through mobile or app purchases, rather than through “brick and mortar” store locations.
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